Investors are wondering how many years it will take before Tesla makes a profit. For Elon Musk’s other big enterprise, SpaceX, the time is now.
Space Exploration Technologies, as the closely held company is formally known, has contracts worth $4.2 billion for hauling U.S. astronauts and supplies to the International Space Station, and Pentagon officials say they expect to certify it soon for military payloads. And SpaceX’s business of launching satellites looks so promising that, in January, Google and Fidelity Investments together invested $1 billion in the Hawthorne, California–based company. That gives them a 10 percent stake that values SpaceX at $10 billion. Other investors include the Founders Fund, Draper Fisher Jurvetson, Valor Equity Partners, and Capricorn. With 50 launches worth $5 billion on its manifest, SpaceX is making money, according to its website, although a spokesman wouldn’t say how much.
On Jan. 10, a SpaceX Falcon 9 rocket took off from Cape Canaveral, above, and successfully delivered 5,200 pounds of supplies to the space station. SpaceX’s schedule includes 16 satellite launches in 2015, the most in the company’s 13-year history. “Google brings the applications for the satellites to the table, and SpaceX has the technical know-how and the launch capacity,” says Marco Caceres, director of space studies at consulting firm Teal Group in Fairfax, Virginia.
Beaming the Internet
Google has a practical goal in linking up with SpaceX. It wants to beam the Internet to hard-to-reach regions of the planet so it can take in more advertising revenue. “Space-based applications, like imaging satellites, can help people more easily access important information, so we’re excited to support SpaceX’s growth,” Google spokesman Aaron Stein said in a statement.
Musk’s aim is more ethereal: He wants to colonize Mars.
SpaceX, which employs 4,000 people, is offering cheaper rocket and satellite launches than were possible when NASA and the military were in charge. Musk says he can send a satellite into space for $60 million. His main private competitor, United Launch Alliance, a joint venture of Lockheed Martin and Boeing, spends $225 million, ULA’s website says.
Musk’s money-saving strategy is to produce reusable rockets, which will return to Earth and land on a seagoing barge. SpaceX called off its second attempt at a barge landing, on Feb. 11, because of heavy seas. The company was due to try again in April. “Aircraft do tens of thousands of flights,” Musk told Bloomberg News in January. If SpaceX rockets can be reused, he said, the cost comes down to “$200,000 to $300,000 per flight in fuel and oxygen versus a $60 million rocket.”
And the Mars colony? Gwynne Shotwell, SpaceX’s chief operating officer, says the first step, manned flights to the planet, could begin in 15 years.