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US Air Force awards SpaceX $20m contract to support its biggest spy satellites

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Slipping beneath the watchful eye of many skilled defense journalists, the government contracting database FPDS.gov indicates that the US Air Force awarded SpaceX more than $20 million in November 2017 to conduct a design study of vertical integration capabilities (VIC). Describing what exactly this means first requires some background.

Vertical whaaaat?

The flood of acronyms and technical terminology that often follow activities of the Federal government should not detract from the significance of this contract award. First and foremost, what exactly is “vertical integration” and why is significant for SpaceX? Not to be confused with more abstract descriptions of corporate organization (vertical integration describes one such style), integration here describes the literal process of attaching satellite and spacecraft payloads to the rockets tasked with ferrying them to orbit.

Likely as a result of its relative simplicity, SpaceX has used a system of horizontal integration for as long as they have been in the business of launching rockets, be it Falcon 1, Falcon 9, or Falcon Heavy. In order to integrate payloads to the rocket horizontally, SpaceX has a number of horizontal integration facilities (HIF) directly beside each of their three launch pads – two in Florida, one in California. After being transported from the company’s Hawthorne, CA rocket factory, Falcon 9 and Heavy boosters, second stages, payload fairings, and other miscellaneous components are all brought into a HIF, where they are craned off of their transporters (a semi-trailer in most cases) and placed on horizontal stands inside the building.

While in the HIF, all three main components are eventually attached together (integrated). The booster or first stage (S1) has its landing legs and grid fins installed soon after arrival at the launch site, followed by the mating of the first and second stages. Once these two primary components of the rocket are attached, the entire stack – as the mated vehicle is called – is once again lifted up by cranes inside the facility and placed atop what SpaceX calls the strongback (also known as the Transporter/Launcher/Erector, or TEL). A truly massive steel structure, the TEL is tasked with carrying the rocket to the launch pad, typically a short quarter mile trek from the integration facility. Once it reaches the pad, the TEL uses a powerful hydraulic lift system to rotate itself and its rocket payload from horizontal to vertical. It may look underwhelming, but it serves to remember that a complete Falcon 9/Heavy and its TEL are both considerably more than twice as tall as a basketball court is long.

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Once at the pad, the TEL serves as the rocket’s connection to the pad’s many different ground systems. Crucially, it is tasked with loading the rocket with at least four different fuels, fluids, and gases at a broad range of temperatures, as well as holding the rocket down with giant clamps at its base, providing connection points to transmit a flood of data back to SpaceX launch control. SpaceX’s relatively unique TEL technology is to some extent the foundation of the company’s horizontal integration capabilities – such a practice would be impossible without reliable systems and methods that allow the rocket to be easily transported about and connected to pad systems.

Still, after the Amos-6 mishap in September 2016, which saw a customer’s payload entirely destroyed by a launch vehicle anomaly ahead of a static fire test, SpaceX has since changed their procedures, and now conducts those static fire tests with just the first and second stages – the payload is no longer attached until after the test is completed. For such a significant decrease in risk, the tradeoff of an additional day or so of work is minimal to SpaceX and its customers. Once completed, the rocket is brought horizontal and rolled back into the HIF, where the rocket’s payload fairing is finally attached to the vehicle while technicians ensure that the rocket is in good health after a routine test-ignition of its first stage engines.

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Before being connected to the rocket, the payload itself must also go through its own integration process. Recently demonstrated by a flurry of SpaceX images of Falcon Heavy and its Roadster payload, this involves attaching the payload to a payload adapter, tasked with both securing the payload and fairing to the launch vehicle. Thankfully, the fairing is far smaller than the rocket itself, and this means it can be vertically integrated with the payload and adapter. The final act of joining and bolting together the two fairing halves is known as encapsulation – at which point the payload is now snug inside the fairing and ready for launch. Finally, the integrated payload and fairing are lifted up by cranes, rotated horizontally, and connected to the top of the rocket’s second stage, marking the completion of the integration process.

A different way to integrate

Here lies the point at which the Air Force’s $20m contract with SpaceX comes into play. As a result of certain (highly classified) aspects of some of the largest military satellites, the Department of Defense (DoD) and National Reconnaissance Office (NRO) prefer or sometimes outright require that their payloads remain vertical while being attached to a given rocket. The United Launch Alliance (ULA), SpaceX’s only competition for military launches, almost exclusively utilizes vertical integration for all of their launches, signified by the immense buildings (often themselves capable of rolling on tracks) present at their launch pads. SpaceX has no such capability, at present, and this means that they are effectively prevented from competing for certain military launch contracts – contracts that are often the most demanding and thus lucrative.

It’s clear that the Air Force itself is the main impetus pushing SpaceX to develop vertical integration capabilities, a reasonable continuation of the military’s general desire for assured access to orbit in the event of a vehicle failure grounding flights for the indefinite future. For example, if ULA or SpaceX were to suffer a failure and be forced to ground their rockets for months while investigating the incident, the DoD could choose to transfer time-sensitive payload(s) to the unaffected company for the time being. With vertical integration, this rationale could extend to all military satellites, not simply those that support horizontal integration.

Fittingly, the ability to vertically integrate satellites is likely a necessity if SpaceX hopes to derive the greatest possible value from its recently and successfully introduced Falcon Heavy rocket, a highly capable vehicle that the government is likely very interested in. Although the specific Air Force contract blandly labels it a “Design Study,” (FPDS.gov account required) its hefty $21 million award may well be far more money than SpaceX needs to design a solution. In fact, knowing SpaceX’s famous ability to develop and operate technologies with exceptional cost efficiency, it would not be shocking to discover that the intrepid launch company has accepted the design study grant and instead jumped head-first into prototyping, if not the construction of an operational solution. More likely than not, SpaceX would choose to take advantage of the fixed tower (known as the Fixed Service Structure, FSS) currently present at Pad 39A, atop which a crane and work platforms could presumably be attached

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Intriguingly, it is a real possibility that Fairing 2.0 – its first launch scheduled to occur as early as Feb. 21 – could have been upgraded in part to support present and future needs of the Department of Defense, among numerous other benefits. Fairing 2.0’s larger size may have even been precipitated by physical requirements for competing for and dealing with the largest spysats operating by the DoD and NRO, although CEO Elon Musk’s characterization of that change as a “slightly larger diameter” could suggest otherwise. On the other hand, Musk’s offhand mention of the possibility of significantly lengthening the payload fairing is likely aimed directly at government customers in both the civil and military spheres of space utilization. Time will tell, and it certainly will not hurt SpaceX or its customers if Fairing 2.0 is also considerably easier to recover and reuse.

Ultimately, it should come as no surprise that SpaceX would attempt to leverage this contract and the DoD’s interest in ways that might also facilitate the development of the company’s futuristic BFR rocket, intended to eventually take humans to the Moon, Mars, and beyond. As shown by both 2016 and 2017 iterations of the vehicle, it appears that SpaceX intends to use vertical integration to attach the spaceship (BFS) to the booster (BFR). While it’s unlikely that this Air Force contract will result in the creation of a vertical integration system that could immediately be applied to or replicated for BFS testing, the experience SpaceX would gain in the process of building something similar for the Air Force would be invaluable and essentially kill two birds with one stone.

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While now outdated, SpaceX’s 2016 Mars rocket featured a giant crane used for vertical integration. BFR appears to use the same approach. (SpaceX)

Follow along live as I and launch photographers Tom Cross and Pauline Acalin cover these exciting proceedings live and in person.

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Pauline Acalin  Twitter

Eric Ralph Twitter

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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 ‘Killer’ heads to the graveyard as AFEELA taps out

SHM has officially discontinued development of its highly anticipated AFEELA electric vehicles. On March 25, the joint venture between Sony and Honda announced it would halt the AFEELA 1 luxury sedan and a planned SUV model.

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Credit: AFEELA/X

There have been many Tesla “Killers” over the years, all of which have either failed to dethrone the automaker from its dominance in the United States, or even make it to the market altogether.

The Sony Honda Mobility (SHM) project, known as AFEELA, is the latest to make it to the grave, as the company announced its intentions to abandon the project earlier this week, Bloomberg reported.

SHM has officially discontinued development of its highly anticipated AFEELA electric vehicles. On March 25, the joint venture between Sony and Honda announced it would halt the AFEELA 1 luxury sedan and a planned SUV model.

The decision follows Honda’s March 12 reassessment of its electrification strategy, which scrapped several upcoming EV programs amid slowing demand, high costs, and shifting market conditions.

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SHM stated that it could no longer rely on key Honda technologies and manufacturing assets, leaving “no viable path forward.” Reservation fees for early buyers in California are being fully refunded, and the joint venture’s future is now under review.

Launched with fanfare in 2022, the AFEELA was positioned as a tech-forward premium EV blending Honda’s engineering reliability with Sony’s entertainment and AI expertise.

Prototypes featured advanced autonomous driving systems, immersive in-cabin displays, and even PlayStation integration, earning it early media labels as a potential “Tesla Killer.”

No more “Tesla Killers:” It’s becoming increasingly difficult to distinguish the “EV market” from the mainstream auto segment

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Priced around $90,000, the sedan was slated for limited production at Honda’s Ohio plant with deliveries targeted for late 2026. Industry watchers saw it as a serious challenger to Tesla’s dominance in software, connectivity, and premium appeal.

Yet, like many ambitious EV projects, it fell victim to broader industry headwinds: softening consumer demand, persistent high interest rates, and intense competition from established players.

The AFEELA joins a long list of vehicles once hyped as “Tesla Killers” that failed to deliver. In the late 2010s, Fisker’s second act, the Ocean SUV, promised stylish design and solid-state battery tech but collapsed into bankruptcy in 2024 after production delays, quality issues, and financial shortfalls.

Faraday Future poured billions into the FF 91 luxury sedan, touting it as a hyper-tech rival with unmatched performance and features; the company delivered fewer than 100 vehicles before fading into obscurity.

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Lordstown Motors’ Endurance electric pickup generated massive pre-order buzz and Wall Street excitement but imploded after exaggerated range claims, a factory sale, and eventual bankruptcy.

Even Lucid Motors’ Air sedan, frequently called a Tesla slayer for its superior range and luxury, has struggled with sluggish sales and missed growth targets despite strong reviews.

Lucid unveils Lunar Robotaxi in bid to challenge Tesla’s Cybercab in the autonomous ride hailing race

Rivian’s R1T and R1S trucks enjoyed similar early acclaim and a blockbuster IPO, yet production ramp-up challenges and profitability woes have prevented it from dethroning Tesla.

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The AFEELA’s quiet demise underscores a harsh reality in the EV sector. While Tesla’s first-mover advantage in software, charging infrastructure, and brand loyalty remains formidable, legacy automakers and tech newcomers alike continue to underestimate the complexities of scaling affordable, desirable electric vehicles.

As market realities force tough choices, the graveyard of “Tesla Killers” grows longer, another reminder that innovation alone is rarely enough to topple an established leader.

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TIME honors SpaceX’s Gwynne Shotwell: From employee No. 7 to world’s most valuable company

Time Magazine honors Gwynne Shotwell as SpaceX reaches a $1.25 trillion valuation and eyes its IPO.

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TIME Magazine has put SpaceX President and COO Gwynne Shotwell on its cover, and the timing could not be more fitting. Published today, the profile of Shotwell arrives at a moment when the company she has quietly run for more than two decades stands at the center of the most consequential developments in aerospace, artificial intelligence, and the future of human civilization.

Shotwell joined SpaceX in 2002 as its seventh employee and has never stopped expanding her role. She oversees day-to-day operations across multiple executive teams spanning Falcon, Starlink, Starship, and now xAI following SpaceX’s February 2026 merger with Elon Musk’s artificial intelligence company, a deal that made SpaceX the world’s most valuable private company at a reported valuation of $1.25 trillion. A highly anticipated IPO is expected in the second quarter of 2026.

Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI

Her track record is historic. She oversaw the first landing of an orbital rocket’s first stage, the first reuse and re-landing of an orbital booster, and the first private crewed launch to Earth orbit in May 2020. She built the Falcon launch manifest from nothing to more than 170 contracted missions representing over $20 billion in business. Under her operational leadership, SpaceX completed 96 successful missions in 2023 alone and has now flown more than 20 crewed Falcon 9 missions. Starlink, which she championed as a financial pillar of the company long before it was a mainstream topic, now connects tens of millions of users worldwide and provided a critical communications lifeline to Ukraine following the 2022 invasion.

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Elon Musk has never been shy about what Shotwell means to him and to SpaceX. When she shared her vision for worldwide internet connectivity through Starlink, Musk responded on X with a simple statement, “Gwynne is awesome.” It is a sentiment that has been echoed across the industry. NASA Administrator Bill Nelson once said of Musk: “One of the most important decisions he made, as a matter of fact, is he picked a president named Gwynne Shotwell. She runs SpaceX. She is excellent.”


Now, with Starship targeting its first crewed lunar landing under the Artemis program by 2028, an xAI integration underway, and a pending IPO that could reshape capital markets, Shotwell’s mandate has never been larger. She told Time that 18 Starships are already in various stages of construction at Starbase. “By 2028,” she said, gesturing across the factory floor, “these should be long gone. They better have flown by then.” If Shotwell’s history at SpaceX is any guide, they will.

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SpaceX’s IPO might arrive sooner than you think

Musk has hinted for years that an eventual public offering was inevitable, though he has stressed the need to maintain operational focus. Insiders have told outlets that the CEO is pushing for a significant retail investor allocation, reportedly more than 20 percent of shares, and tighter lock-up periods to limit early selling pressure.

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Credit: SpaceX | X

Elon Musk’s SpaceX is on the verge of one of the most anticipated Initial Public Offerings (IPO) in history.

However, a new report from The Information indicates the rocket and satellite giant is aiming to file its IPO prospectus with U.S. regulators as soon as this week, or early next week at the latest.

People familiar with the plans told The Information that advisers involved in the process expect the IPO could raise more than 75 billion dollars, potentially making it the largest stock market debut ever and eclipsing Saudi Aramco’s 29.4 billion dollar offering in 2019.

The filing would mark the formal start of what has long been rumored: SpaceX’s transition from a closely held private powerhouse to a publicly traded company.

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The timing aligns with earlier signals.

In late February, Bloomberg reported that SpaceX was targeting a confidential IPO filing in March and a possible public listing in June, with a valuation north of 1.75 trillion dollars. At the time, the company’s private valuation hovered around 1.25 trillion dollars.

SpaceX considering confidential IPO filing this March: report

Starlink, SpaceX’s satellite internet constellation, has been the primary driver of that surge, now serving millions of customers worldwide and generating steady revenue. Recent Starship test flights and a record pace of Falcon launches have further bolstered investor confidence.

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Musk has hinted for years that an eventual public offering was inevitable, though he has stressed the need to maintain operational focus. Insiders have told outlets that the CEO is pushing for a significant retail investor allocation, reportedly more than 20 percent of shares, and tighter lock-up periods to limit early selling pressure.

A June listing would give SpaceX immediate access to public capital markets at a moment when demand for space-related stocks remains high. It would also allow early employees and long-time investors to cash out portions of their stakes while giving everyday shareholders a chance to own a piece of the company behind reusable rockets, global broadband, and NASA contracts.

Of course, nothing is certain until the SEC filing appears. Market conditions, regulatory reviews, and Musk’s own schedule could still shift timelines.

Yet the latest word from The Information suggests the window has opened. If the filing lands this week, SpaceX’s roadshow could begin in earnest within weeks, setting the stage for what many analysts already call the IPO of the decade.

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