Elon Musk says SpaceX is in 'risk of bankruptcy' if the starship engine crisis is not solve
Summary
- CNBC obtained the email that Musk sent the day after Thanksgiving to its company. “The Raptor production crisis is much worse than it seemed a few weeks ago,” Musk wrote.
- “We face genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year,” Musk added later.
- SpaceX’s Starship spacecraft represent a fully reusable transportation system designed to carry both crew and cargo to Earth orbit, the Moon, Mars and beyond.
- SpaceX has raised billions of dollars in funding over the past years, with the company’s valuation hitting $100 billion.
What happened
Elon Musk seems to be very angry with the lack of progress SpaceX has made in developing the Raptor engines that will power the Starship rocket.
CNBC obtained the email that Musk sent the day after Thanksgiving to its company. “The Raptor production crisis is much worse than it seemed a few weeks ago,” Musk wrote.
“We face genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year,” Musk added later.
About Starship
SpaceX’s Starship spacecraft and Super Heavy rocket (collectively referred to as Starship) represent a fully reusable transportation system designed to carry both crew and cargo to Earth orbit, the Moon, Mars and beyond. Starship will be the world’s most powerful launch vehicle ever developed, with the ability to carry in excess of 100 metric tonnes to Earth orbit.
https://www.spacex.com/vehicles/starship/
The company is testing prototypes at a facility in southern Texas and has flown multiple short test flights. But to move to orbital launches, the rocket prototypes will need as many as 39 Raptor engines each – necessitating a sharp ramp in engine production.
Musk is dedicated to taking the matter into his own hands and mentioned that he is personally going to work on the engine production line through Friday night and into the weekend.
“We need all hands on deck to recover from what is, quite frankly, a disaster,” Musk wrote.
The billionaire founder has repeatedly described production as the most difficult part of creating SpaceX’s mammoth rocket. The company has steadily built up its Starship production and testing facility in Boca Chica, Texas, with multiple prototypes in work simultaneously.
In previous announcements, the Starship is set to “hopefully launch” the first orbital Starship flight in January or February, pending regulatory approval by the FAA as well as technical readiness.
SpaceX wants Starship to be fully reusable, with both the rocket and its booster capable of landing after a launch and to be recovered for future flights. SpaceX’s Falcon 9 rockets are partially reusable. The company can regularly land and relaunch the boosters but not the upper portion, or stage, of the rocket.
Musk said earlier this month that he wasn’t sure if Starship would successfully reach orbit on the first try, but emphasized that he is “confident” that the rocket will get to space in 2022.
Bottom Line
SpaceX has raised billions of dollars in funding over the past years, with the company’s valuation hitting $100 billion. Despite the company’s current ramping up production of its Starlink antennas “to several million units per year,” those will be useless if the Raptor engine does not succeed.
What remains to be seen is if the company will manage to solve the problem in order to successfully launch in the expected months mentioned above. If not, this will mark not just a failure but a bankruptcy for the company.
Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.
Natalia C. - Junior Analyst at FDGT Academy
I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.
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