SpaceX domination of U.S. launch contracts is poised to grow

Elon Musk’s rise into Donald Trump’s political orbit in 2024 has overshadowed another milestone this year for the world’s richest man: His space business has launched more rockets than ever, further establishing itself as an indispensable workhorse for NASA and the U.S. military.

As of this week, Musk’s SpaceX had completed 112 launches this year - equating to roughly one every three days - an unprecedented pace in the history of spaceflight and already a 16 percent increase over the 96 launches it performed in 2023, according to data compiled by the American Enterprise Institute (AEI).

Nearly two-thirds of SpaceX launches sent Musk’s Starlink internet satellites into orbit, while a significant portion of the missions were classified work for the military and publicly disclosed work for NASA, such as crewed Dragon capsule trips to the International Space Station, according to the data.

SpaceX also is on a trajectory to remain the most dominant player in space launches for years to come as it makes strides with its heavy-duty Starship rocket program, which Musk envisions as a platform to take people to Mars as well as open up possibilities for complex satellite systems and construction on the moon.

In a planned sixth test flight Monday of its Starship, SpaceX will try to repeat the dramatic landing it accomplished for the first time last month, in which its booster was caught by two converging chopstick arms as it powered down alongside the launch tower. Pulling off the risky maneuver twice would be a major step toward demonstrating that its largest and most powerful rocket can be safely reused.

“SpaceX is dominating the government launch market because they have a reliable and flight-proven vehicle, a highly competitive price and a high launch cadence that provides more opportunities for government satellites to hitch a ride,” said Todd Harrison, the AEI space analyst who has catalogued every known SpaceX launch.

Musk’s prowess in space comes as he has formed a close relationship with Trump, the president-elect, who has invited him to participate in calls with foreign leaders and appointed him to lead a commission to shrink the federal government.

Musk’s role in the new administration, alongside his status as the leader of a prominent government contractor, has led to questions about how he would handle potential conflicts stemming from his dual roles. SpaceX is managed day-to-day by President and Chief Operating Officer Gwynne Shotwell, but Musk retains a role as founder and CEO. He has posted messages on social media about his feuds with public agencies, including the Federal Aviation Administration, which oversees SpaceX and has proposed fining the company. Tesla, the electric vehicle company he founded, and smaller start-ups like Neuralink and the Boring Company, also are subject to government oversight. Musk and his companies have not responded to multiple requests for comment.

The number of SpaceX launches expanded dramatically after 2018, mostly driven by the company’s massive investments in its Starlink satellite internet service. The data also shows how SpaceX’s growth as a government contractor paralleled its Starlink success.

The company’s reusable Falcon 9 rocket has become the launch vehicle of choice for NASA, the Defense Department and the intelligence community.

Out of 67 launches that were wholly or partially funded by the U.S. government since the beginning of 2022, 47 went to SpaceX, according to Harrison’s database.

And it is continuing to win federal contracts that will fund launches in the coming years. SpaceX was recently awarded an eight-launch $733 million contract by the Space Force. It is also a prime contractor on the Space Force’s National Security Space Launch program. The Wall Street Journal reported that it holds a $1.8 billion national security contract.

SpaceX has handled 19 out of 24 government-sponsored launches so far this year. Among the remaining five, one was a U.S. military launch that used the Electron rocket from Rocket Lab, a Long Beach, California-based company that specializes in sending small satellites into orbit. A July launch funded by NASA used a rocket from Firefly Aerospace to send eight small satellites into orbit.

Two dedicated military launches used expendable launch vehicles serviced by United Launch Alliance (ULA), the partnership of Lockheed Martin and Boeing.

In 2014 SpaceX sued the Air Force over ULA’s $70 billion Air Force contract for 36 rockets to send defense payloads, such as satellites, into space by 2030. At the time the launch alliance was using Russian engines in some of its rockets, something that Musk argued was possibly a violation of U.S. sanctions. The lawsuit was later settled.

According to its website, SpaceX charges $69.75 million for each Falcon 9 launch, up from $62 million in 2020. The website says Falcon 9 could take a 8,860-pound payload to Mars, or deliver up to 50,265 pounds to low Earth orbit. A new launch system from ULA, by comparison, has the goal of getting its price below $100 million, Harrison said. A ULA spokesperson said the company does not release its launch costs due to competitive sensitivities.

Numerous competitors are working on reusable rockets but they are all lagging well behind SpaceX. Jeff Bezos’s Blue Origin’s New Glenn rocket, which is designed to be reusable, is years behind schedule. But it could finally launch in its first test flight as early as next month. Firefly Aerospace and Northrop Grumman are teaming up to develop a medium-sized launch vehicle that it says is “designed to support reusability” with plans for an initial test flight “as early as 2026.” (Bezos owns The Washington Post.)

SpaceX has, in some cases, been used as a backup option after its competitors failed to deliver. ULA and the French aerospace company Arianespace have more recently struggled to transition to a new launch vehicle, Harrison said, and missions, most notably for Amazon’s own satellite internet constellation known as Kuiper, had to be moved to SpaceX simply because their competitors were not able to launch them in a timely manner.

The Starship system, owing to its larger carrying capacity and the fact that the entire vehicle would be reused, promises to further drive down the cost of sending each incremental kilogram into orbit.

The breakthrough has been thrilling to industry executives and U.S. officials alike, who recognize that a revolution in launch costs means a broader revolution in what humans can build in space.

Gary Henry, former SpaceX senior director of national security space solutions, estimates that Starship will lower the marginal cost of sending equipment into near orbit to around $200 a kilogram, compared with more than $2,000 per kilogram for SpaceX’s more established Falcon rockets, and nearly $20,000 per kilogram from earlier vendors.

Henry said these costs could drop even further over the next decade if Starship rocket systems are successful, making it possible to haul more satellites into orbit, begin construction on the moon and for humanity to venture farther into space.

“Basically, Starship is going to unlock the solar system,” he said.

Chris Quilty, founder of the consultancy Quilty Space, said that Starship’s dramatic decrease in launch costs opens up horizons for new industries that previously existed only in science fiction: mining asteroids, moon bases, space-based energy systems. He said that the math could now work for such businesses to be economically viable.

“There will be an entire … space economy. This is going to exist,” Quilty said. “The stuff I watched as a kid, you know, ‘Space: 1999′ and ‘Battlestar Galactica’, all that stuff will happen because it’s economically feasible.”