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SpaceX scraps first Starship prototype to make way for new and improved rockets
A bit less than a month after SpaceX’s first full-scale Starship prototype was partially destroyed during testing, the damaged rocket has been almost completely scrapped to make way for new and improved Starships.
On November 20th, SpaceX effectively tested the Starship Mk1 – the first full-scale prototype – to destruction, pressurizing the rocket’s tank section (lower half) until it quite literally popped its top. The pressure wave that failure created damaged almost every internal component of the massive vehicle, all but guaranteeing that SpaceX would have to scrap the vehicle and move on to new prototypes.
Those future prototypes will take advantage of the many, many lessons learned from Starhopper’s two test flights and several additional grounded tests, as well as the many learning experiences presented through Starship Mk1’s pathfinder manufacturing, assembly, and test campaign. As is SpaceX’s signature, the company is choosing to learn by building actual hardware and making the inevitable mistakes that come hand in hand with such an eccentric and ambitious program.
Above all else, SpaceX is trying to redefine the minimum infrastructure needed to build high-performance launch vehicles at a scale comparable to or even larger than NASA’s Saturn V, the largest rocket ever successfully launched. Modern rockets like Falcon 9 and Atlas V are built in relatively clean and environmentally-controlled environments and Saturn I and V – while quite a bit less sterile – were at least built inside large hangar-like facilities.
With Starship, SpaceX instead wants to build rockets even larger than Saturn V out in the elements and with a far more common (and thus affordable) workforce, (theoretically) made possible in large part thanks to its extensive use of stainless steel. Case in point, Starhopper – a low-fidelity Starship test bed – was quite literally welded together on the South Texas coast by welders far more familiar with building water towers. While not without its teething pains, Starhopper proved to be incredibly sturdy and resistant to anomalous behavior and successfully performed two separate flight tests in July and August 2019.
Three months after Starhopper’s second and final hop test, SpaceX’s Starship Mk1 tank section – the lower half of the rocket – was moved to the launch site and began a series of tanking tests. The first few tests were completed successfully and focused on searching for leaks with a neutral cryogenic liquid (likely liquid nitrogen). After the majority of those leaks were sealed, SpaceX moved into liquid oxygen load testing a few days later. For unconfirmed reasons, it turned out that that first liquid oxygen pressure test would also be Starship Mk1’s last.
On November 20th, SpaceX pressurized Starship Mk1 to its limits, with almost all of the visible creases and wrinkles in its steel surface visibly smoothing out as the supercool liquid oxygen caused frost to form on the exterior. Ultimately, SpaceX pushed the vehicle beyond its limits and its uppermost tank dome quite literally popped off of Starship’s tank section, whether the overpressure event was intentional or unexpected. The force of that overpressure event essentially sent a shockwave through Starship, crushing and warping its two remaining tank domes and transfer tubes like an aluminum soda can.
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In simpler terms, very few parts of Starship Mk1 escaped unharmed, all but guaranteeing that it would not be worth the effort to repair it. Instead, SpaceX has almost entirely scrapped the prototype over a period of two weeks. According to an official statement released shortly after Mk1’s failure, SpaceX will attempt to recover and reuse as much of Mk1 as it can and those few salvageable parts will be added to an entirely new prototype, deemed Starship Mk3.
Although it’s disappointing that Starship Mk1 was unable to perform any kind of Raptor engine testing, let alone flight tests, it’s safe to say that the pathfinder prototype has been well worth the time and effort it took to build. Regardless of flight or engine testing, a ton of Mk1’s value lies in its utility as a hands-on, physical testbed for SpaceX employees to perform experiments and learn how to build steel rockets – and build them outside in less than friendly weather conditions.
SpaceX is in the midst of rapidly expanding its presence in Boca Chica, Texas, including a new launch control center, an expanded landing and launch pad, new production facilities, and more. The company has also just begun churning out numerous monolithic (single-weld) steel rings that will likely become part of Starship Mk3 in the near future. It will likely be several months before that next-generation prototype is as close to completion as Starship Mk1 was, but it should be well worth the wait and well worth its predecessor’s sacrifice.
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Elon Musk has declared that SpaceX has effectively solved one of Starship’s most persistent engineering challenges: the reliability of its heat shield tiles.
During the company’s first-ever Earnings Call, the SpaceX CEO stated:
“I don’t want to jinx it or anything, but I think I would call the heat shield problem solved at this point. All indications from data and visual inspection is we have solved it. That doesn’t mean we won’t make improvements, but we do not see any technical obstacles to achieving rapid reusability at this point.”
Starship’s heat shield consists of roughly 18,000 hexagonal ceramic tiles covering the windward side of the upper stage. These tiles form the thermal protection system that shields the vehicle’s stainless-steel structure from the extreme heat of atmospheric reentry.
Elon says he believes the heat shield problem with Starship is currently solved.
He called it “arguably the single biggest problem” pic.twitter.com/eEE9vM5zlz
— TESLARATI (@Teslarati) August 4, 2026
During descent, atmospheric friction generates temperatures exceeding several thousand degrees Celsius and creates plasma flows capable of melting unprotected metal. The tiles absorb, radiate, and insulate against this energy, allowing the vehicle to survive and potentially fly again. Without a durable heat shield, full and rapid reusability, the cornerstone of Starship’s design for frequent launches, satellite deployments, and deep-space missions, would remain impossible.
The tiles have long been a source of difficulty. On earlier test flights, a significant number of tiles detached during ascent due to vibration, aerodynamic loads, and imperfect attachment methods using pins and adhesives. Gaps between tiles allowed hot plasma to infiltrate, causing secondary damage and hot spots on the underlying structure.
These issues echoed challenges faced by NASA’s Space Shuttle, whose ceramic tiles required extensive, labor-intensive inspections and replacements between missions, preventing rapid turnaround. SpaceX has iteratively improved materials, standardized tile shapes, refined attachment techniques, added secondary ablative layers, and tested sealing methods such as “crunch wrap” felt to close gaps.
Progress was visible across Flights 10–12, with steadily better tile retention, yet questions remained about whether the system could support the minimal-refurbishment goal of rapid reuse.
Flight 13 on July 24 provided the decisive evidence. Ship 40 flew a deliberately more demanding profile with higher dynamic pressure to stress the heat shield beyond typical operational loads. It successfully deployed 20 operational Starlink V3 satellites, the first such payload on a Starship mission, performed an in-space Raptor engine relight, and executed a controlled reentry.
Elon Musk sheds two new bits of detail on Starship after 13th test launch
Cameras on six of the satellites and onboard sensors captured extensive imagery and data of the shield throughout the flight. The ship then achieved its softest splashdown to date in the Indian Ocean, remaining intact and floating rather than breaking apart or exploding as on prior missions. This allowed drone inspections and continuous telemetry of the heat shield in near-real time.
Post-flight analysis showed the majority of tiles remaining attached with only minor damage and limited plasma streaking at seams. Musk noted that the mission delivered “all the heat shield data we needed and then some.” Combined with visual inspections, these results underpinned his subsequent assessment that the core technical barriers to rapid reusability have been cleared. While refinements will continue, Flight 13 marked a pivotal step toward Starship’s operational future.
SpaceX COO Gwynne Shotwell outlined ambitious plans for Starlink Mobile during the company’s August 4 Earnings call, signaling a direct challenge to U.S. wireless giants like AT&T, T-Mobile, and Verizon.
Shotwell noted that the three companies generate roughly $600 billion in combined annual revenue. “I anticipate us to be able to acquire quite a few of their customers because I think our service will be better,” she said. “We will eliminate dead zones leveraging the satellites in orbit. It will be better during any natural disaster… I’m quite excited about Starlink Mobile.”
SpaceX President & COO Gwynne Shotwell on @Starlink Mobile and its impact on Verizon, AT&T and T-Mobile:
“Roughly, between them, $600 billion a year. I anticipate us to be able to acquire quite a few of their customers. Our service will be better. We will eliminate dead zones… pic.twitter.com/UYZUkrGc0L
— Sawyer Merritt (@SawyerMerritt) August 4, 2026
SpaceX intends to combine its satellite constellation with terrestrial infrastructure. The company has acquired about 65 MHz of spectrum from EchoStar and plans to deploy next-generation Starlink Mobile satellites in 2027, with upgraded service targeted for the end of that year.
Shotwell described the enhanced network, leveraging more satellites and spectrum, as potentially “100 times better” than the current direct-to-cell offering, which already supports basic texting and app-based voice/video in coverage gaps through partnerships. She also indicated plans for low-cost cellular base stations that could integrate with existing Starlink dishes, creating a hybrid system for broader capacity in urban, suburban, and rural areas.
For the general public, Starlink Mobile promises significant advantages. Satellite connectivity can fill gaps where traditional cell towers fail, delivering service in remote locations, mountains, or during outages caused by storms, wildfires, or infrastructure damage—conditions in which ground networks often collapse.
Users could enjoy more consistent coverage without relying solely on dense tower builds, potentially at competitive prices as SpaceX scales. The hybrid approach aims to support full mobile services, including higher-speed data, while working with unmodified smartphones over time.
These developments revive long-standing but unfounded rumors of a Musk-developed “Tesla phone.” Speculative claims of a “Pi Phone” or similar device with built-in Starlink connectivity have circulated for years on social media, often featuring fabricated images and details. Elon Musk has repeatedly denied any such plans, stating Tesla has no intention of entering the smartphone market unless forced by extreme circumstances with app stores.
No official product, filings, or development announcements have ever materialized; the rumors remain hoaxes.
The announcement quickly pressured telecom stocks. Shares of AT&T, Verizon, and T-Mobile fell between roughly 2 and 4 percent in after-hours and premarket trading as investors weighed the competitive threat from a hybrid satellite-terrestrial network.
While execution challenges remain—spectrum deployment, infrastructure rollout, and regulatory hurdles—Shotwell’s remarks mark SpaceX’s clearest signal yet of entering the consumer mobile market as a full competitor.
Venture capitalist Chamath Palihapitiya has cautioned investors shorting SpaceX shares, drawing a direct parallel to the intense short-selling pressure Tesla faced in its early public years.
Responding to reports of elevated short interest in the newly public rocket, satellite, and AI company, Palihapitiya noted that similar dynamics played out with Tesla, where aggressive short sellers ultimately “went broke.”
SpaceX (NASDAQ: SPCX) went public on June 12, 2026, in the largest IPO on record, pricing at $135 per share. Shares quickly surged to an all-time high of $225.64 just days later, briefly implying a valuation exceeding $2 trillion. The stock has since retreated sharply amid valuation concerns, lockup expiration fears, and broader market dynamics.
By early August, it traded near $108–$125, representing a roughly 50 percent decline from the peak and bringing the market capitalization closer to the $1.5–1.7 trillion range. On August 4, shares closed up more than 9 percent at $125.33 ahead of earnings before facing pressure in after-hours and premarket trading.
Short interest has climbed dramatically. According to S3 Partners data widely cited in market reports, short positions reached approximately 219.3 million shares by late July, about 34 percent of the limited public float of roughly 640 million shares, and represented a notional value of around $24.6 billion.
Utilization of shares available to borrow hit 95 percent, with borrow fees rising. This level of shorting exceeded the dollar value of short bets against Tesla at the time and built rapidly ahead of two catalysts: the company’s first post-IPO earnings and an August 6 lockup expiration that could free up to 911.5 million additional shares.
CEO Elon Musk has issued warnings of his own. In mid-July, as short interest approached one-third of the float, he posted that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” reiterating his view that the company could ultimately be worth more than Earth if it achieves its goals.
On August 4, just before earnings, Musk responded to the latest short-interest data by saying, “I try to warn them, but they just double down.”
SpaceX delivered its first quarterly results as a public company after the close on August 4. Second-quarter revenue rose 92 percent year-over-year to $7.8 billion, beating consensus estimates near $6.8–6.9 billion.
The net loss narrowed to $541 million, or 9 cents per share, better than the roughly 23–24 cent loss expected. Starlink/connectivity contributed about $4.3 billion (up 66 percent), while the AI business generated $2.6 billion (up roughly 250 percent). Capital expenditures were heavy at $18.4 billion, largely tied to AI infrastructure. Management projected a $100 billion annualized revenue run rate by year-end 2026 and outlined a path toward $1 trillion in annual revenue by 2030.
The combination of Chamath’s historical reminder, Musk’s repeated alerts, and the company’s ambitious growth targets underscores the high-stakes debate surrounding SPCX. Short sellers are positioned for near-term supply pressure from the lockup, while long-term bulls point to Starlink scale, Starship progress, and AI compute expansion as reasons the bears may ultimately face the same fate as many early Tesla skeptics.
SpaceX has solved Starship’s biggest challenge, Elon Musk says
SpaceX is coming for wireless giants with Starlink Mobile
