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Musk calls out SpaceX rival for receiving billion dollar subsidy, ULA head fires back

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8 years ago

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Following an intriguing SpaceX testimony before Senate committees in Washington D.C., Musk took to Twitter to share some thoughts on the state of the launch marketplace and SpaceX’s place within it. It didn’t take long for him to relate a somewhat common critique of the United Launch Alliance, SpaceX’s only American competition.

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Tory Bruno, President and Chief Executive of ULA, responded with gloves off just a few hours later, deeming the implied existence of such a subsidy nothing more than a “[persistent] myth”. He spent fifteen or so minutes replying to skeptical and inquisitive followers on Twitter, stating that the Wikipedia paragraph on the subject was incorrect. Bruno was steadfast in his response saying that he had publicly testified on the public procurement process before Congress (he did, and he did not defer on the term “subsidy”), and he adamantly refused to back down on his statement that such a subsidy only existed in mythology.

For better or for worse, Bruno is correct to a large extent. In fact, he published a full editorial on the controversial subject in the canonical SpaceNews Magazine. The ELC (EELV (Evolved Expendable Launch Vehicle) Launch Contract) is the source of this controversy, and while not quite a full billion dollars, the FY2016 ELC contract was for $860 million.

SpaceX has admittedly been chronically doubted and mistreated in the realm of government contracting, and ULA has been less than perfectly civil in the past. Simply by existing, SpaceX in effect disrupted what was a American launch industry monopoly held between Boeing and Lockheed Martin. Those two companies merged their space endeavors approximately 11 years ago and have since been the United Launch Alliance. For reasons that do make a bit of sense but are still mildly obtuse, the United States Air Force chose to purchase ULA launch vehicles and the services that make the launch of those vehicles possible separately. The main given reason for this choice, as explored in Bruno’s editorial, is to give the Air Force added flexibility.

As discussed in the 2016 ELC contract itself, another large need for this type of funding lies in the maintenance of a large workforce, and the constant depreciation of both the Atlas and Delta families of launch vehicles. The Delta family, known mainly for the large Delta IV Heavy, is almost never utilized at this point in time, with Atlas being both more cost effective and more reliable. Regardless, due to contracting, ULA is required to maintain both the workforce and facilities necessary to produce and launch Delta vehicles, in spite of having nearly no “business” thanks to Atlas V. Maintaining a workforce and set of facilities that is in part or whole redundant is not efficient or cost-effective, but it is contractually required. So, while the ELC contract Musk deemed a nearly pointless subsidy does have some major flaws, inefficiencies, and illogical aspects, it is not technically correct to label it a subsidy.

 

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Without the actual contract information, it is also difficult to know if ULA would still receive this contractual payment in lieu of conducting actual launches. Bruno frames it in such a way that it sounds like the U.S. government modifies the payment size based on the number and type of required launches for a given year. If the multi-year agreement means that launches delayed many months or more can still be swapped out at no additional charge, then this does indeed make a certain amount of sense. The array of discussion on the subject nevertheless fails to explore the consequences of launch provider-side issues, the likes of which ULA and Atlas 5 experienced earlier this year, resulting in some amount of delays.

While there can be no doubt that the actual gritty details of the ELC contracts deal explicitly with such possible outcomes, the lack of transparency (be that as a result of publicly inaccessible contract details or highly obtuse and lingo-heavy contract language) ultimately frames ELC contracts and the vehemence with which ULA defends them as a wasteful, overly complex, and unnecessary alternative to simply offering a fixed product with services inherently included, as SpaceX does.

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Eric Ralph is Teslarati's senior spaceflight reporter and has been covering the industry in some capacity for almost half a decade, largely spurred in 2016 by a trip to Mexico to watch Elon Musk reveal SpaceX's plans for Mars in person. Aside from spreading interest and excitement about spaceflight far and wide, his primary goal is to cover humanity's ongoing efforts to expand beyond Earth to the Moon, Mars, and elsewhere.

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Tesla analysts believe Musk and Trump feud will pass

Tesla CEO Elon Musk and U.S. President Donald Trump’s feud shall pass, several bulls say.

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2 hours ago

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July 1, 2025

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The White House, Public domain, via Wikimedia Commons
President Donald J. Trump purchases a Tesla on the South Lawn, Tuesday, March 11, 2025. (Official White House Photo by Molly Riley)

Tesla analysts are breaking down the current feud between CEO Elon Musk and U.S. President Donald Trump, as the two continue to disagree on the “Big Beautiful Bill” and its impact on the country’s national debt.

Musk, who headed the Department of Government Efficiency (DOGE) under the Trump Administration, left his post in May. Soon thereafter, he and President Trump entered a very public and verbal disagreement, where things turned sour. They reconciled to an extent, and things seemed to be in the past.

However, the second disagreement between the two started on Monday, as Musk continued to push back on the “Big Beautiful Bill” that the Trump administration is attempting to sign into law. It would, by Musk’s estimation, increase spending and reverse the work DOGE did to trim the deficit.

President Trump has hinted that DOGE could be “the monster” that “eats Elon,” threatening to end the subsidies that SpaceX and Tesla receive. Musk has not been opposed to ending government subsidies for companies, including his own, as long as they are all abolished.

How Tesla could benefit from the ‘Big Beautiful Bill’ that axes EV subsidies

Despite this contentious back-and-forth between the two, analysts are sharing their opinions now, and a few of the more bullish Tesla observers are convinced that this feud will pass, Trump and Musk will resolve their differences as they have before, and things will return to normal.

ARK Invest’s Cathie Wood said this morning that the feud between Musk and Trump is another example of “this too shall pass:”

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Additionally, Wedbush’s Dan Ives, in a note to investors this morning, said that the situation “will settle:”

“We believe this situation will settle and at the end of the day Musk needs Trump and Trump needs Musk given the AI Arms Race going on between the US and China. The jabs between Musk and Trump will continue as the Budget rolls through Congress but Tesla investors want Musk to focus on driving Tesla and stop this political angle…which has turned into a life of its own in a roller coaster ride since the November elections.”

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Tesla shares are down about 5 percent at 3:10 p.m. on the East Coast.

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Tesla scrambles after Musk sidekick exit, CEO takes over sales

Tesla CEO Elon Musk is reportedly overseeing sales in North America and Europe, Bloomberg reports.

Published

4 hours ago

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July 1, 2025

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Credit: Tesla

Tesla scrambled its executives around following the exit of CEO Elon Musk’s sidekick last week, Omead Afshar. Afshar was relieved of his duties as Head of Sales for both North America and Europe.

Bloomberg is reporting that Musk is now overseeing both regions for sales, according to sources familiar with the matter. Afshar left the company last week, likely due to slow sales in both markets, ending a seven-year term with the electric automaker.

Tesla’s Omead Afshar, known as Elon Musk’s right-hand man, leaves company: reports

Afshar was promoted to the role late last year as Musk was becoming more involved in the road to the White House with President Donald Trump.

Afshar, whose LinkedIn account stated he was working within the “Office of the CEO,” was known as Musk’s right-hand man for years.

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Additionally, Tom Zhu, currently the Senior Vice President of Automotive at Tesla, will oversee sales in Asia, according to the report.

It is a scramble by Tesla to get the company’s proven executives over the pain points the automaker has found halfway through the year. Sales are looking to be close to the 1.8 million vehicles the company delivered in both of the past two years.

Tesla is pivoting to pay more attention to the struggling automotive sales that it has felt over the past six months. Although it is still performing well and is the best-selling EV maker by a long way, it is struggling to find growth despite redesigning its vehicles and launching new tech and improvements within them.

The company is also looking to focus more on its deployment of autonomous tech, especially as it recently launched its Robotaxi platform in Austin just over a week ago.

Tesla officially launches Robotaxi service with no driver

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However, while this is the long-term catalyst for Tesla, sales still need some work, and it appears the company’s strategy is to put its biggest guns on its biggest problems.

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Tesla upgrades Model 3 and Model Y in China, hikes price for long-range sedan

Tesla’s long-range Model 3 now comes with a higher CLTC-rated range of 753 km (468 miles).

Published

6 hours ago

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July 1, 2025

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Credit: Tesla China

Tesla has rolled out a series of quiet upgrades to its Model 3 and Model Y in China, enhancing range and performance for long-range variants. The updates come with a price hike for the Model 3 Long Range All-Wheel Drive, which now costs RMB 285,500 (about $39,300), up RMB 10,000 ($1,400) from the previous price.

Model 3 gets acceleration boost, extended range

Tesla’s long-range Model 3 now comes with a higher CLTC-rated range of 753 km (468 miles), up from 713 km (443 miles), and a faster 0–100 km/h acceleration time of 3.8 seconds, down from 4.4 seconds. These changes suggest that Tesla has bundled the previously optional Acceleration Boost for the Model 3, once priced at RMB 14,100 ($1,968), as a standard feature.

Delivery wait times for the long-range Model 3 have also been shortened, from 3–5 weeks to just 1–3 weeks, as per CNEV Post. No changes were made to the entry-level RWD or Performance versions, which retain their RMB 235,500 and RMB 339,500 price points, respectively. Wait times for those trims also remain at 1–3 weeks and 8–10 weeks.

Model Y range increases, pricing holds steady

The Model Y Long Range has also seen its CLTC-rated range increase from 719 km (447 miles) to 750 km (466 miles), though its price remains unchanged at RMB 313,500 ($43,759). The model maintains a 0–100 km/h time of 4.3 seconds.

Tesla also updated delivery times for the Model Y lineup. The Long Range variant now shows a wait time of 1–3 weeks, an improvement from the previous 3–5 weeks. The entry-level RWD version maintained its starting price of RMB 263,500, though its delivery window is now shorter at 2–4 weeks.

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Tesla continues to offer several purchase incentives in China, including an RMB 8,000 discount for select paint options, an RMB 8,000 insurance subsidy, and five years of interest-free financing for eligible variants.

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