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Rand Simberg @Rand_Simberg
, 11 tweets, 2 min read Read on Twitter
OK, so there's been a lot of discussion today about rocket "costs." We need to be clear that no one except the manufacturers/operators know what their rockets cost. All of this discussion is really about price (what the customer is charged). (1/N)
There is no fixed launch cost of a given rocket type. The cost of any given launch is a function of configuration, degree of reusability, propellant costs, flight rate, facility, etc. And we have to distinguish between marginal cost, and average cost.
For instance, the marginal cost of a Shuttle flight was the cost of mission-specific training, the propellants, the external tank, and rebuilding the SRBs. Probably about $200M-300M at time of retirement. The average annual cost was close to a billion per flight. 3/N
The average cost per flight of the Shuttle over the life of the program was about a billion dollars per flight in 2010 dollars. That includes amortization of development, and is all the total program costs divided by the total number of flights. 4/N
Now, for fully-expendable Delta IVH, the marginal cost is the cost of production of the rocket. The average cost is the annual cost of maintaining the infrastructure to support it divided by the number of flights. And it has a very low flight rate. 5/N
That's why you see numbers ranging from $400M to $600M per flight. Even if Falcons were fully expended, their flight rate is such that they have a much lower average cost. With reusability, cost can start to approach propellant costs. Which are trivial (~1%). 6/N
So when Elon is saying $90M "cost" (he means price) for reusable heavy, and $150M for fully expending it, he's implying that his core manufacturing costs are < $20M each. Because he's not going to lose money on the launch. For reusable, average cost is probably < $10M total. 7/N
This implies that he has a lot of headroom to lower his price if and when he gets competition, but until then, he's going to have a very high profit margin on reusable Falcon launches, whether Falcon 9 or Heavy, because the marginal cost is propellants plus upper stage. 8/N
We could even take a ROM shot at their average cost per flight. I think they have about 6000 FTEs. If they average $100K/year, that's a burn rate of ~$600M/year. If they get off thirty flights this year, that's an average CPF of $20M/flight. 9/N
Add another few million per flight to amortize facilities, and for marginal costs (propellant plus upper stage), and they still have tens of millions of profit on either F9 at $60M or FH at $90M. 10/N
OK, I should note that @torybruno tweeted today that D-IVH price is $350M. I'll take his word for that, but I'll bet they're losing money at that price, for the rare times it flies. It's probably goodwill to their USAF customer to keep their other business.
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