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SpaceX on a roll with latest small satellite launch contract wins
Rideshare organize Exolaunch has announced a multi-spacecraft launch contract with SpaceX, continuing a streak of success enjoyed by the launch company’s Smallsat Program over the last several months.
While Exolaunch declined to confirm the mass of the payload or the number of satellites it manifested on a SpaceX Smallsat Program launch, the German company has likely arranged for 5-10 customer satellites to travel to orbit on Falcon 9. Known as a launch services provider, Exolaunch is effectively a middleman company tasked with connecting small satellites – typically cubesats in the 1-50 kg (1-125 lb) range – to rideshare launch opportunities on much larger rockets.
At face value, SpaceX’s Smallsat Program offers an extremely poor deal for individual cubesat owners on the market for launch services. However, through a growing number of flight-proven organizers like Exolaunch, Nanoracks, and others, markets and actual hardware are being developed to give the many hundreds or thousands of potential customers a cheap and reliable way to space. Uncertainties undoubtedly remain but SpaceX appears to be well on its way to securing a range of relatively valuable keystone customers, potentially becoming the go-to option for smallsat launches.
While it sounds deceptively simple, it’s looking more and more like SpaceX’s Smallsat Program has been an extremely strategic and forward-looking play, setting the company up to be a bit like the spaceflight equivalent of an ocean freight provider. Effectively the invisible backbone of the global economy, modern shipping is incredibly efficient and effective in large part because of the adoption of standardized shipping containers.
Just like oceanic shipping, the cost of transporting an entire shipping container is uneconomical for the vast majority of customers in search of logistics services. Instead, 3rd parties typically acquire space and then sell portions of each container’s volume inside to smaller customers. Companies like Exolaunch, Nanoracks, and more are essentially trying to become those third parties, albeit in a world where the standard shipping container has yet to be developed.
Exolaunch’s ‘Exopod’ is one of several such orbital-shipping-crates-in-waiting and will fly on SpaceX’s first dedicated rideshare mission, scheduled to launch no earlier than (NET) December 2020. Critically, providers like Exolaunch – tasked with deploying multiple customer satellites in orbit – can require an overall payload heavy enough for SpaceX’s pricing to be spectacularly competitive. Assuming an Exopod is ~50 kg and can store four 3U cubesats weighing ~10 kg each, Exolaunch would have to pay SpaceX just ~$1M to launch a full pod.
Add a 25% overhead for Exolaunch’s own costs and those four satellites could reach orbit for something like ~$300,000 apiece. In reality, it’s likely possibly for costs to be even lower, but it serves to show how 3rd-party service providers can offer prices lower than the launch company’s own catalog.
Aside from Exolaunch, SpaceX has won several smallsat launch contracts from Nanoracks (partially a services provider like Exolaunch), Momentus (a space tug company with more than a dozen of its own satellite customers), Kepler (an Internet of Things satellite constellation company), as well as several smaller orders. SpaceX’s growing relationship with Momentus is particularly interesting as the latter company’s goal is to develop cheap orbital tugs, deploying satellites at the exact orbits they want even if launched as part of a rideshare. Momentus has already bought slots for its Vigoride space tugs on five SpaceX rideshare launches, beginning as early as December 2020.
Ultimately, while the economics of rideshare launches on vehicles as large as Falcon 9 remain extremely unforgiving, SpaceX appears to be in it for the long haul and has certainly won an impressive number of launch contracts in just the last few months. SpaceX’s first Smallsat Program rideshare could happen as early as June 2020, hitching a ride on one of the two-dozen internal Starlink missions planned this year. The first dedicated rideshare is working towards its own December 2020 launch debut.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Tesla stock closes at all-time high on heels of Robotaxi progress
Tesla needs to come through on this one Robotaxi metric, analyst says
