Connect with us

News

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

Published

8 years ago

on

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.

Advertisement

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.

 

Advertisement

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.

Advertisement
Related Topics:

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.

Advertisement
Comments

News

Tesla opens massive solar Supercharger station in California

The Supercharger opened to customers ahead of Fourth of July weekend, while Tesla continues phase two of construction on the site.

Published

32 minutes ago

on

July 7, 2025

By

Credit: Tesla Charging | X

Tesla has officially launched the first several Supercharging posts at a massive station in California, notably including solar canopies and grid-scale batteries to offer completely renewable charging.

Last week, Tesla announced on X that it opened the first 84 Supercharger stalls of a planned 168-stall station in Lost Hills, California. Additionally, the massive Supercharger project features 11MW of solar canopies and 10 Megapack batteries for off-grid charging powered entirely by solar energy.

Tesla completed the first phase of the project just days ahead of the busy Fourth of July holiday weekend, adding that initial construction took just eight months. In addition to the remaining charging stalls, Tesla says it’s building a set of lounge areas, renderings of which can be seen below alongside current photos of the site.

Notably, the site also includes V4 charging posts for the company’s latest available charging speeds, and it’s located near the busy junction between I-5 and Highway 46 in Kern County.

“Thank you [Kern County] and [PG&E] for collaboration and approvals,” Tesla wrote in a follow-up post.

Advertisement

Credit: Tesla Charging | X

Credit: Tesla Charging | X

Credit: Tesla Charging | X

Credit: Tesla Charging | X

READ MORE ON TESLA SUPERCHARGERS: Tesla launches ultra-fast V4 Superchargers in China for the first time

Testing at the LA Diner, plus Musk update on potential Tesla solar Gigafactory

The huge Tesla Supercharger station completed phase one of construction fairly quickly, especially given how long Tesla has been working on its unique Los Angeles diner, drive-in, and Supercharger location. Still, the company was seen performing some testing at the nearly-completed charging station earlier this month, and will reportedly be holding a job fair.

Elon Musk also responded on Monday morning to a post on X, suggesting that Tesla is “thinking about” building a U.S.-based solar Gigafactory in order to help support increased power needs with AI growth, and to bolster domestic solar production.

Advertisement

Tesla is building a new UFO-inspired Supercharger in the heart of Alien country

Continue Reading

News

Tesla driver walks away from major accident with minor injuries

The driver sustained only minor injuries, and the exact cause of the crash remains under investigation.

Published

2 hours ago

on

July 7, 2025

By

Credit: CHP Los Banos (via Facebook)

The driver of a Tesla Model Y survived and walked away from a harrowing accident on Monday in California, only sustaining minor injuries despite the vehicle being impaled by a guardrail.

On Monday morning around 4:34 a.m., the Los Banos division of the California Highway Patrol (CHP) responded to the accident on I-5 near Panoche Road, involving a 23-year-old in a Tesla Model Y. According to a post on social media, the driver veered off the road for unknown reasons in the northbound lane, before crashing directly into the guardrail and impaling the vehicle.

You can read the full message and photos from Los Banos CHP below, as were shared in a Facebook post on Monday afternoon.

This morning a Tesla model y was traveling in the #1 northbound lane of I-5 north of Panoche Rd. For unknown reasons driver allowed V-1 to veer off the roadway, travel through a dirt center divide, and crashed into the fixed metal guardrail. Lucky for the driver he only sustained minor injuries and was able to walk away. Driving a vehicle requires 100% attention to the road. Avoid distractions and focus on driving.

Credit: CHP Los Banos (via Facebook)

Credit: CHP Los Banos (via Facebook)

Credit: CHP Los Banos (via Facebook)

In a statement to SFGate, CHP officer Myles Anderson said that the driver only sustained minor injuries, while no arrests are made and drugs and alcohol are not suspected to have been involved. The report also notes that Tesla’s “cruise control and lane assistance features” were activated, according to Anderson. However, it’s not entirely clear if this is referring to Supervised Full Self-Driving (FSD), or to the cruise control and lane assist features baked into Autopilot.

At the time of writing, CHP has not yet responded to Teslarati’s request for clarification and additional details on the matter.

Advertisement

READ MORE ON TESLA SAFETY: Tesla rolls out crucial new safety feature aimed at saving children

The news comes after Tesla has touted its vehicles as incredibly safe for many years. In December, for example, the company highlighted receiving top safety scores from regulators on four different continents throughout the world, including from the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute of Highway Safety (IIHS) in the U.S.

Tesla has also listed the goal of making its vehicles the safest on the road throughout the years, both in the overall design of its vehicles and in its Autopilot and Full Self-Driving (FSD) programs.

Advertisement

Tesla Model 3 ranks as the safest new car in Europe for 2025, per Euro NCAP tests

Continue Reading

Investor's Corner

Cantor Fitzgerald maintains Tesla (TSLA) ‘Overweight’ rating amid Q2 2025 deliveries

Cantor Fitzgerald is holding firm on its bullish stance for the electric vehicle maker.

Published

9 hours ago

on

July 7, 2025

By

Credit: Tesla China

Cantor Fitzgerald is holding firm on its bullish stance for Tesla (NASDAQ: TSLA), reiterating its “Overweight” rating and $355 price target amidst the company’s release of its Q2 2025 vehicle delivery and production report. 

Tesla delivered 384,122 vehicles in Q2 2025, falling below last year’s Q2 figure of 443,956 units. Despite softer demand in some countries in Europe and ongoing controversies surrounding CEO Elon Musk, the firm maintained its view that Tesla is a long-term growth story in the EV sector.

Tesla’s Q2 results

Among the 384,122 vehicles that Tesla delivered in the second quarter, 373,728 were Model 3 and Model Y. The remaining 10,394 units were attributed to the Model S, Model X, and Cybertruck. Production was largely flat year-over-year at 410,244 units.

In the energy division, Tesla deployed 9.6 GWh of energy storage in Q2, which was above last year’s 9.4 GWh. Overall, Tesla continues to hold a strong position with $95.7 billion in trailing twelve-month revenue and a 17.7% gross margin, as noted in a report from Investing.com.

Tesla’s stock is still volatile

Tesla’s market cap fell to $941 billion on Monday amid volatility that was likely caused in no small part by CEO Elon Musk’s political posts on X over the weekend. Musk has announced that he is forming the America Party to serve as a third option for voters in the United States, a decision that has earned the ire of U.S. President Donald Trump. 

Advertisement

Despite Musk’s controversial nature, some analysts remain bullish on TSLA stock. Apart from Cantor Fitzgerald, Canaccord Genuity also reiterated its “Buy” rating on Tesla shares, with the firm highlighting the company’s positive Q2 vehicle deliveries, which exceeded its expectations by 24,000 units. Cannacord also noted that Tesla remains strong in several markets despite its year-over-year decline in deliveries.

Continue Reading

Trending