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I'll try to make this as interesting as possible. If you like space, you'll like this talk. My background in brief, I'll talk a little bit Zip2 and Paypal and then mostly about space and what we're doing in space. So, I originally came up California to do energy physics at Stanford, actually. And ended up putting it in '95. And ended up putting that on hold to start Zip2. I'll tell you a little about the four process of exactly what happened there. In '95, it wasn't at all clear that the internet was going to be a big commercial thing. In fact, most of the venture capitalists that I talked to hadn't even heard of the internet which sounds bizarre on Sand Hill Road. But I wanted to do something in there. I though it would be a pretty huge thing. I though it was one of those things that came along once in a very long while. So, I got a deferment at Stanford. And thought I'd give it a couple of quarters. If it didn't workout, which I though it probably wouldn't, then I'd come back at this school. Actually, I talked to my professor. I told him this and he said, well, I don't think you'd be coming back, and that was the last conversation I had with him. The only way to get involved in the internet in '95, that I could think of, was to start a company. Because there weren't a lot of companies to go and work for, apart from Netscape, maybe one or two others. And I don't have any money. So I though we got to make something that's going to return money very, very quickly. So we thought that the media industry would need help converting its content from a print media to electronic. And they clearly have money. So if we could find a way to help them root their media to the internet that would be an obvious way of generating revenue. There was no advertising revenue on the internet at the time. That was really the basis of Zip2. We ended up pulling quite a bit of software for the media industry; primarily, the print media industry. So we had these investors and customers; Hearst Corporation, Knight Ridder, most of the major US print publishers. We brought that up and then we had the opportunity to sell to Compaq in early '99. And basically, took that off for a little over $300 million dollars in cash. That's the currency I highly recommend.
So we had that but I wanted to do something more after Zip2. Immediately post the sale, I'd ordinarily take the time off. I tried to get where the opportunities, this is early '99, remained in the internet. It seemed to me that there hadn't been a lot of innovation in the financial services sector. And when you think about it, money is low bandwidth. You don't need some sort of big infrastructure improvement to do things with it. It's really just an entry in the database. The paper form of money is really only a small percentage of all the money that's out there. It should land itself to innovation on the internet. So, we thought of a couple of different things we could do. One of the things was to combine all of somebody's financial services needs into one website. So, you can have banking, brokerage, insurance and all sorts of things in one place. And that was actually quite a difficult problem to solve. But we solved most of the issues associated with that. Then we had a little feature which took us about a day. That was about an emailed money from one customer to another. You could type in an email address or, actually, any unique identifier and transfer funds or conceivably stocks or mutual funds or whatever from one account holder to another. And if you should try to transfer money to somebody who didn't have an account in the system, it would then forward an email to them saying, hey, why don't you sign up and open an account? Whenever we demonstrate these two sets of features we'd say, this is a feature that took us a lot of effort to do and look how you can see your bank statement and your mutual funds and insurance and all that. It's all in one page and look how convenient that is. And people would go, hmm, and we would say, and by the way, we have this feature where you can enter somebody's email address and transfer his funds, and they go, wow! All right, OK. So we focused the company's business on emailed payments. In the early game going, our company's called X.com. There was another company called Confinity which also started out from a different area. They started off with Palm Pilot cryptography and they had as a demo application the ability to beam token payments from one Palm Pilot to another by the infrared port. Then they had a website which was called Paypal where you'd reconcile the beamed payments. And what they found was that the website portion was actually far more interesting to people than Palm Pilot cryptography was. So they started leaning their business in that direction. In early 2000, X.com acquired Confinity and then about a year later, In early 2000, X.com.
And that's just an approximate evolution of the company. But Paypal is really a perfect case example of viral marketing like Hotmail was. Where one customer would essential act as a sales person for you by bringing in other customers. So they would send money to a friend and, essentially, recruit that friend into the network. So you had this exponential growth. The more customers you had the faster it grew. It was like bacteria in a Petri dish, it just goes like this S-curve. I ran Paypal for about the first two years of its existence. We launched after year one and by the end of year two, we had a million customers. It gives you a sense of how fast things grow in that scenario. And we didn't have a sales force. We, actually, didn't have a VP of Sales. We didn't have a VP of Marketing. And we didn't spend any money on advertising.
In about February of last year, I'm sure you're probably following it, Paypal went public. I think we were the only internet company to go public in the first part of last year. It went off reasonably well. Although, I think we had more SEC rewrites than any company I can imagine. I think we set a record on SEC rewrites. This was right around the end-on time when there was all sorts of corporate scandals. So, they put as through the ringer. Shortly thereafter, about June, July, we struck a deal with eBay, to sell the company to eBay for over $4 billion. But that was when eBay's stock price was about $55 and they hadn't split. So, I guess, in today's dollars we were about $3 billion. So it worked out pretty well.
It happened coincidentally, that in the first part of last year I've been doing just some background research on space. Well, let me talk a bit about that. Essentially, I was trying to figure out why we had not made more progress since Apollo. In the '60's we went in from basically nothing. Nothing ever put anyone into space to putting people on the moon. Developing all the technology from scratch to do that. And yet in the '70's and '80's and the '90's we kind of gone side ways. We're currently in a situation where we can't even put a person into lower earth orbit. That doesn't really gel with all of the other technology sectors out there. The computer that you could have bought in the early '70's would have filled this room and had less computing power than your cell phone. And so just about every sector of technology has improved. Why has this not improved? So I started looking into that. Initially I thought, well, perhaps, it's a question of funding. And that funding can be garnered by really marshalling public support. So one way to get the public excited about space would be to do, maybe, a privately-funded robotic space mission to Mars. So we figured out a mission that would cost about $15 or $20 million which isn't a lot of money but it's about a 10th of what a low-cost NASA mission would be. The idea was called Mars Oasis. Where we'd put a small robotic land rover on the surface of Mars with seeds and dehydrated nutrient gel. They would hydrate upon landing and you'd have plants growing in a Martian radiation, gravity conditions. And you'd also be maintaining, essentially, life support systems on the surface of Mars. And this should be interesting to the public because they tend to respond to precedents and superlatives. This would be the furthest that life has ever traveled and the first life on Mars. So pretty significant. Then when I started looking at launch vehicles; the lowest cost vehicles in US is Boeing's Delta 2 which costs about $50 million. And that's a bit steep for what we're trying to do. So I made three visits to Moscow, to Russia to look at buying a a Russian launch. It's actually pretty interesting going to Moscow to negotiate for a refurbished ICBM. You know, on the range of interesting experiences that's pretty far out there. But we actually did get to a deal. But there were so many complications associated with the deal that I wasn't comfortable with the risk associated with it. So when I got back from the third trip, I thought, well, why is it the Russians can build these low cost launch vehicles? Because it's not like we drive Russian cars, fly Russian planes or have Russian kitchen appliances. When was the last time we bought something Russian which wasn't vodka? I think the US is a pretty competitive place and we should be able to build a cost efficient launch vehicle. So I put together a feasibility study which consisted of engineers that have been involved with all major launch vehicle developments over the last three decades. We iterated over a number of Saturdays beginning of last year to figure out what would be the smartest way to approach this problem of not just launch cost but also launch reliability. And we came up with a default design. And that actually was fortunate timing. That feasibility study finished up right around the time that we agreed to sell Paypal to Ebay. So coincident with that sale, I moved down to LA where there's, actually, the biggest concentration of aerospace industry in the world. It's actually the biggest industry in southern California and much bigger than entertainment and anything else. I was living in Palo Alto for about nine years before that.
Anyway, so I'll just talk broadly about space and where things are today. Obviously, U.S. government manned exploration is not in a great place. The three remaining shuttles are grounded. It looks like first flight might only be a year from now, if that. And we've got a vehicle that is incredibly expensive and really quite dangerous. For reasons mentioned there, it's got a side-mounted crew compartment, so if there's an explosion, that's basically instant death. You've got solid rocket boosters, which, once you ignite them you can't turn them off. And there's something fundamentally dangerous by pre-mixing your fuel and oxidizer, I think. And then you've got wings and control surfaces. When you re-enter, you've got to maintain a precise angle at attack. Even a momentary variance in that can break the whole vehicle apart. And then, of course, you've got no escape system, so if anything does go wrong, you're toast. And then you've got a cost that is really pretty hard to fathom. The shuttle program, when you add up all the pieces, is about $4 billion a year. And so you can divide $4 billion by the number of flights and that will tell you what the cost is. And if there's, say, four flights a year, which there haven't been for a while, then you're talking about $1 billion of flight. The plans in the immediate future, we've got to continue building the space station. So we're going to keep flying the shuttle, but I think it's probably going to be the minimum number of shuttle flights that we need to launch. The long-term plans are the Orbital Space Plane. I say 'plane' in quotes because one of the options is a capsule, so it should be called maybe orbital space thing. But the basic idea is to have something that's hopefully a little cheaper and a lot safer than the space shuttle. So in particular it's going to have an escape system. So if something does go wrong you can abort to safety. The downside is that it's still--while it might be a little cheaper, it's still going to be pretty darn expensive. The estimated cost per flight of Orbital Space Plane is somewhere in the region of $300 to $400 million a flight. And of that amount, just $200 million alone goes to Boeing for the Delta 4-Heavy expendable booster. It's a $15-billion development effort and expected to be completed in nine or 10 years. Now typically, things have not been under budget and under time, so it's unlikely, I think, given historical precedent that it will stay within $15 billion end of 2012 timeline. And a bit about what's going on elsewhere in the world. In Russia, the Soyuz is our only access to space station. It's considerably cheaper, considerably safer. The Soyuz has a very good track record. The crew is top-mounted. It has an escape system. There are no wings or control surfaces to go wrong. Overall, it's a pretty good system. And the estimated cost is about $60 million of flight, which is an order of magnitude less than the space shuttle. The thing that constrains them obviously is the weakness of the Russian economy. It's very hard for them to embark on ambitious programs with an economy the size of Belgium. So China is probably the most interesting thing that's going on in space. This month, China is expected to launch their first person into space. It will make them only the third country ever to put someone in orbit. And they've put a lot of money and effort into this program. If anything serves as a spur for human space exploration, it is likely to be China's ambitions in space, and hopefully a sense in America that we want to at least keep up with China. And they have grand ambitions beyond just low-Earth orbit. They're planning on setting up a space station, putting a base on Mars, and eventually sending humans to Mars. So what's happening in the U.S. that I think might ultimately surpass all of that stuff is entrepreneurial space activities, where things are led by the spirit of free enterprise. And I think there's perhaps an analogy here where just as DARPA served as the initial impetus for the internet and underwrote a lot of the costs of developing the internet in the beginning, it may be the case that NASA has essentially done the same thing by spending the money to build sort of fundamental technologies in the beginning, and then once we can bring sort of commercial free enterprise sector into it, then we can see the dramatic acceleration that we saw in the internet. So there are several serious launch efforts underway. I'll talk about each one. There's Burt Rutan of Scaled Composites. Burt Rutan is one of the world's foremost aircraft designers and he's developed a suborbital vehicle that they're actually flying out of Mojave. And this is an X Prize-class vehicle. There's John Carmack, who wrote Quake and Doom. He's probably one of the best software engineers in the world--one of the best engineers that I know, period. And he's developing a vertical type of landing vehicle. Jeff Bezos, who I understand was here last week, is a huge space advocate. And to my understanding he intends to spend something in the order of a billion dollars over the next 20 years on space exploration. And then my company, SpaceX. And I think within the next several years, these entrepreneurial efforts will actually be what drives space exploration.
So a little about each one. That's a picture of the Burt Rutan effort. It's called the White Knight. It's the carrier plane and then SpaceShipOne is the thing that's held in the belly there. And this project is supposedly funded by Paul Allen. So despite all the capitals -- I should make that point -- a lot of capital that's entering this entrepreneurial space sector as well, the only problem I could think of this architecture is that it's not really scalable for something that would get to orbit. This is pretty good for sub-orbital but it actually needs to change for orbital vehicle. And there's John Carmack's effort. He's a little irreverent. This is from his website. His vehicle is a vertical take off and landing vehicle. He's made really incredible progress for somebody who has no background in aerospace engineering. And he's also kind of doing it all himself, with him and three buddies. And I think they will make something that works. You can check out their website, Armadillo Aerospace. It's pretty interesting stuff. But in order to get into orbit, this would require a substantial improvement in the mass efficiency and the engine efficiency, and probably be a two-stage vehicle. Jeff Bezos, who I'm sure almost everyone here has heard of. He is a pretty huge fan of space and in fact, his high school valedictorian speech was about the necessity of humanity expanding to other planets. So it's pretty important to him, from what I understand. This is our effort. We're spending quite a bit more than the three prior entities that I mentioned. In some cases, probably in the order of magnitude or more, because what we are doing is we make an order of magnitude more difficult. If we're building an orbital launch vehicle, that's a two-stage, very high efficiency engines, very high mass efficiency launch vehicle. And it's targeted to the satellite delivery market. So our perch is really to make this a solid sound physics. And it's predicated on a strategic plan on a known market, something that we know for a fact exists, which is the need to put small to medium-sized satellites into orbit. So that's what we are going after initially. And then with that as a kind of a revenue base, we will move into the human transportation market. The long-term aims of the company are definitely human transportation. I think a smart strategy is to first go for cargo delivery, essentially, satellite delivery. And our eventual upgrade path is to build the successor to the Saturn V or a super-heavy lift vehicle that could be used for setting up a moon base or doing the Mars mission. That's the Holy Grail objective. On the upper right there, you could see a test-firing of our engine. And on the lower right, you could see the upper stage attempt. This is an engine test of our main engine, which is called Merlin. And that generates about roughly 75,000 pounds of thrust. At sea level. This is our upper stage engine. That's about it. That's about 75 per pounds thrust in a vacuum. And this is an accelerated version of our launch sequence. The first launch would be from the Space-6 Launch Complex at Vandenberg Air Force Base in approximately March of next year, basically early next year. And we will be applying a Navy satellite, a Navy communications satellite. So it's notable because often, launch vehicle companies are not able to get a paying customer on their first flight. But we've been able to do that. This is also the Falcon development at SpaceX. It's the fastest launch vehicle development in history, including war time. That's actually Vandenberg Air Force Base, which is about two hours away from Sta. Barbara.
Common themes between Zip2 and Paypal? Well, I guess, both of them involved software as the heart of the technology. Even though Zip2 was servicing the media sector. And obviously, Paypal was servicing the financial sector. The heart of it was really software and internet related stuff. So, certainly that's a huge commonality. They're both in Palo Alto, where I live. I think we took a similar approach to building both companies. Which was to have a small group of very talented people and keep it small. I think Paypal had, at it's height, probably 30 engineers for a system that, I would say, is more sophisticated than the Federal Reserve clearing system. I'm pretty sure it is actually because the Federal Reserve clearing system sucks. So, what else is there? Generally, I think the way both Zip2 and Paypal operated was, it was really your canonical Silicon Valley start up. You know, pretty flat hierarchy, everybody had it, roughly, some like you. And anyone could talk to anyone. We have to go for the best idea when's as oppose to a person proposing the idea winning because they are who they are. Even though there are times when I thought that should have been the way it could. Obviously, everyone was an equity stake holder. If there were two paths that, let's say, we had to choose through one thing or the other. And one wasn't obviously better than the other. Then rather spend a lot of time trying to figure out which one was slightly better, we would just pick one and do it. Sometimes we'd be wrong. And we'd pick ourselves from our path. But often it's better to pick a path and do it than to just vacillate endlessly on a choice. We didn't worry too much about intellectual property, paperwork or legal stuff. We were really very focused on building the best product that we possibly could. Both Zip2 and Paypal were very product-focused companies. We were incredibly obsessive about how do we evoke something that is really going to be the best possible customer experience. And that was a far more effective selling tool than having a giant sales force or thinking of marketing gimmicks or twelve-step processes or whatever.
I'm not super familiar with Friendster. I mean the essence of viral marketing is do you have something where one customer is going to sell to another customer without you having to do anything. There are lots of instances of that, Friendster might be one. Obviously, Hotmail was one. PayPal was one. eBay was one. In a situation like that, going back to what I said about product, a product matters incredibly because if you're going to recommend something to somebody, you got to really love the product experience; otherwise, you're not going to recommend it because you don't want to burn your friend.
The hurdles entering the space industry, well, it is a very complicated regulatory structure. As you might imagine, when somebody tries to build an orbital launch vehicle which is not really all that distinguishable from an ICBM, there's a lot of regulation and there probably should be because you don't want to launch something and end up hitting LA where I live. So probably the regulatory stuff was very difficult. The environmental approvals certainly have proven very difficult much more so than we expected. I mean here in Silicon Valley, what I came to appreciate is in Silicon Valley you live in a libertarian paradise. There is almost no regulation. What can be very frustrating is that regulation is often irrational; it doesn't make any sense but you've got somebody there who's simply executing a set of rules independent of where those rules make sense and you can try to convince them that rules don't make sense and they won't listen to you. So probably regulation is the most annoying thing. I would say overall though, I'm very pleased because I think we've had a very smooth development process and on the whole, I can't complain at all.
Why is it so expensive to send something into space? Well, let me tell you what makes a rocket hard. The energy in the blasting required to get into orbit is so substantial that compared to, say, a car or even a plane, you have almost no margin to play with. Typically, a launch vehicle will get about 2% of it's lift off mass to orbit. And that's the case for Falcon. So if you can only get 2% of what your rocket weighs, to begin with, to orbit. If you're wrong by 2%, you're not going to get anything to orbit. You know, come crying down at the Pacific for it. That means all of your calculations have to be right. If you miss calculate something. You get an answer wrong. It blows up. And it's very expensive trying to get all your answers right. And then double checking if they're right. And testing them all and doing as much as you can on the ground. I think that's a lot of what makes rockets expensive. The low launch rate, typically, is also what makes rockets expensive. If you had thousands of flights a year then it would be a lot cheaper. Or it's a bit of a chicken and egg. Because it needs to be cheaper in order to have thousands of flights a year. But at the end of the day, in the final analysis, I would say, that rockets really should be a lot cheaper than they are today. And I think the way they're bought, the way they're operated is just very inefficiently. And I think with Space X and Falcon we're going to show that that's the case. Our vehicle will sell for about $6 million a flight. Our nearest competitor is the Pegasus from Orbital Sciences which is about $25 million a flight. And that has less capability than our rocket. So Falcon will represent a pretty substantial breakthrough on the cost backs of space.
Can you talk a little bit about difference in the customer base you have targeted in SpaceX that enforces experiences with PayPal how much challenge that presents? Yes. The customer base with SpaceX is dramatically different obviously from PayPal. PayPal is a consumer product whereas SpaceX we're selling rockets and the number of people who want to buy rockets is quite small. If anyone here has explained to everyone a rocket, I'd be glad to sell it to him. So it's much more of an individual selling process. There's a great deal more thought that goes to any purchase of a launch, much more so that signing up a PayPal account which doesn't really cost you much, and there's not a lot of viral marketing that's going to happen with a rocket I suspect. I'm hoping but I'm not counting on it.
I think successful entrepreneurs probably come in all sizes, shapes and flavors. I'm not sure there's any one particular thing. For me, some of the things I've described already I think are very important. I think really an obsessive nature with respect to the quality of the product is very important and so being an obsessive compulsive is a good thing in this context. Really liking what you do, whatever area that you get into, even if you're the best of the best, there's always a chance of failure so I think it's important that you really like whatever you're doing. If you don't like it, life is too short. I'd say also, if you like what you're doing, you think about it even when you're not working. It's something that your mind is drawn to and if you don't like it, you just really can't make it work I think.
SpaceX is about 30 people and what we do internally in SpaceX is we do all of the design analysis, integration of hardware, testing and then launch operations. But a lot of the heavy manpower stuff like welding together our primary structure, the heavy machining and so forth that we outsource, so we'd be a much larger company if we did all that internally. So you had another part to your question? Just lawyers... Actually we don't have any lawyers. The regulatory stuff that we deal with is very technical. It's really a lot like trying to get an airplane certified with the FAA. We're just getting a rocket certified. I wish we could offload it to some lawyers. They wouldn't know what the heck to do, so.
How did the Wharton degree help? I think for instance teachers with a lot of the terminology, introduces you to concepts that you would otherwise, there's terminology there's something to be said for that, introduces you to concepts you would otherwise have to learn empirically. I mean I think you can learn whatever you need to do to start a successful business either in school or out of school. A school in theory should help accelerate that process and I think oftentimes it does. It can be an efficient learning process, perhaps more efficient than empirically learning lessons. I mean there are examples of successful entrepreneurs who never graduated high school and there are those that have PhDs. So I think the important principle is to be dedicated to learning what you need to know, whether that is in school or empirically.
Well, I should point out that Falcon, our first vehicle, doesn't really have the same capability as either the Chinese, the Russian or the space shuttle vehicles that I mentioned. Falcon would be in the light class of launch vehicles, whereas the space shuttle would be a heavy-class launch vehicle so it's not quite apples to apples comparison. However, the right comparison would be Falcon compared to the Pegasus from Orbital Sciences. Falcon is six million; the Pegasus is 25 million. The way we've gotten our prices low, our cost low is we've really focused on every element of the launch vehicle. There's really no one silver bullet that has been responsible for a substantial portion of the cost savings. It's been really hundreds of small innovations and improvements, and so we've done improvements in the propulsion system, the structure, the avionics and the launch operations as well as maintain a very low overhead organization. When you add up all the things we've done in those areas, that allows us to produce the launch vehicle at $6 million. As far as PayPal, there were a lot of back-office relationships that we needed to establish and to attach to various heterogeneous data sources. We needed to attach to the credit card system for processing credit cards. We needed to attach to the Federal Reserve System for doing electronic funds transfers. We needed to attach to various fraud databases to run fraud checks. There was a lot that we had to interface with. That took a while. It all came together I think roughly simultaneously. I mean developing the software and having it ready for the general public reasonably coincided with us being able to conclude those deals and interface with the outside vendors, and all that took about a year. I think one thing that's important is to try not to serialize dependencies, so if you can put as many elements in parallel as possible. A lot of things have a gestation period and there's really nothing you can do to accelerate; I mean it's very hard to accelerate that gestation period. So if you can have all those things gestating in parallel then that is one way to substantially accelerate your timeline. I think people tend to serialize things too much.
We did do a few patents on the PayPal system although nothing that ever actually mattered. Our patents are mostly useful in a defensive situation rather than offensive. It can be very difficult actually to offensively prosecute a patent. I think in certain industries like pharmaceuticals and so forth, patents can be incredibly important. In software, particularly when you've got a very rapid lifecycle where you're sure you got a patent but now it's redundant so who cares. It's less relevant when you got a raid lifecycle.
There are a couple of things that I think are pretty bogus. One is space mining, another is space solar power. I mean if you calculate how much it costs to bring either the photons from space solar power back to earth or the raw material back to earth, the economics don't make sense. They just can't close the economic case. It's probably off by three order of magnitude. So I think probably the biggest thing that could happen is if we decide to establish a base on the Moon or a base on Mars and particularly, if we attempt to make a self-sustaining base, self-sustaining civilization on the Moon or Mars, that is an enormous opportunity on probably the trillion-dollar level because then you have basically interplanetary commerce going on. I think that's pretty huge, but it's not going to be space solar power; it's not going to be space mining I think.
Let's see. The government, maybe we're being spied upon, I don't know, but certainly there are some restrictions which are really annoying; such as the fact we're only allowed to employ people who have at least a green card or a citizen of the US. We're not allowed to employ anyone who does not have permanent residency in the U.S. If they can't throw you in jail, they won't let you work on rocket stuff. If we talk to any foreign nationals, we need a technology transfer agreement or something like that for the State Department. Our second launch is actually a non-US governmental launch and it has taken us six months to get the State Department approval just to engage in a contract discussion with them. So that is problematic.
We had several offers actually from a number of different entities for Paypal and in fact the close we got to IPO, the more offers we got but we always felt that those undervalued the company and subsequently when we went public, I think the public markets kind of indicated the value of the company. That's one of the good things about public markets. It's that they're an objective valuer of companies. When you're a private company it's very hard to say how much you're worth because you have to basically think of some metric. Are you going to go for multiple of future earnings? Are you going to go off something of revenue? What are your comparables going to be? There are all sorts of questions. It's really up for debate what sort of value your company is. When you're public, it's what the market says you're worth, that's what you're worth. Yes. eBay made a number of offers prior to going public that would substantially blow the value once we went post public and that kind of cleared up the disagreement and then we sold them. What else? Actually you had a second part to the question. I'm just wondering if you were concerned on getting any traction to a solution. Yes. eBay had initially Billpoint and then there was eBay Payments and it was a really pretty tough long running battle of Paypal versus eBay's payment system. It was certainly very challenging. I think there were times when it felt like we were trying to win a land war on Asia and they kind of set the ground rules or trying to beat Microsoft in their own operating system. It's really pretty hard. That took a lot of our effort to actually beat eBay on their own system. One of the long-term risks certainly for the company was that eBay would one day prevail and one way to retire that risk obviously was to sell to eBay.
Writing software during the summer of '95. Trying to make useful things happen on the internet. I wrote something that allowed you to keep maps and directions on the internet and something that allowed you to do online manipulation of content; kind of a really advanced blogging system. Then we started talking to small newspapers and media companies and so forth. We started getting some interest. I mean, half of the time it'd be like watch the internet, you in Silicon Valley. But then occasionally, somebody would buy it and we get a little bit of money from them. There were, basically, only six of us. There were myself, my brother, who I convince to come down from Canada; and a friend of my Mom's. And then three sales people we hired on contingency by putting an ad in a newspaper. But things were pretty tough in the early going. I didn't have any money. In fact, I had negative money. I had huge student debts. In fact, I couldn't afford a place to stay and an office. So I rented an office instead. Because, actually, I got a cheaper office than I could get a place to stay. I just slept on the futon and shouted the YMCA on Paige Mullen. It was the best shape I've ever been. There was shower work out and you're good to go. There was an ISP on the floor below us. Just like a little tiny ISP. And we'd draw a hole through the floor and connect to the main cable. That gave us our internet connectivity like a hundred bucks a month. So we had just an absurdly tiny burn rate. And we also had a really tiny revenue screen. But we actually had more revenue than we had expenses. So when we went and talked to VP's we could actually say we had positive cash flow. That helps, I think.
Well, like I said, there's no silver bullet that I can point to as to why our vehicle is a lot cheaper. We're really focused on reducing the cost across the board. I mean one thing, our overhead in a 30-person company is in order of magnitude less than it is in Lockheed or Boeing just for starters. So even if we did everything the same in both the same launch vehicles, we'd be conservatively cheaper. Every decision we've made has been with consideration to simplicity and the reason for simplicity is because that both improves reliability as well as reduce your costs. If you've got fewer components that's fewer components to go wrong and fewer components to buy. I think a fairly significant innovation in our airframe which is semiprecious stabilized monocoque with variable skin thickness and a common bulkhead, if you know what that means. I'll need a diagram to explain at all but the net result is that it's very cheap and it's very mass efficient and I think easy to test and quite reliable. Our avionic system, I'll give you another example, we use an Ethernet on the vehicle to communicate. That may not sound like a great innovation but it is in launch vehicles. All the other launch vehicles communicate in the vehicle by these serial cables that run the entire length of the vehicle, so you've got these giant copper bundles as thick as your arm running up and down the vehicle. It makes it heavy, it makes it expensive. So there are things like that which when you add them all up, it makes a huge difference.
No. That's a good question. No, I would not. I think SpaceX, this is advanced entrepreneuring. I can't tell you how many people have said that the fastest way to make a small fortune in the aerospace industry is to start with a large one so hopefully that doesn't work out. I think space is a tough one for first-time entrepreneurs. You're better off starting with something that requires low capital and space is a high-capital effort. Sorry. Last question?
The optimization in the case of Falcon 1 was really in terms of a cost per flight to orbit. So it wasn't a cost per unit mass optimization, it was - what is the smallest useful vehicle that we can build and deliver satellites on. It was clear that was at least a 1000 pounds to LEO and we ended up exceeding that, going to about 1500 pounds. Total cost per launch is about $6.5 million, all in. Both stages are LOX/Kerosene. One note is that the first stage is intended to be reusable, it comes back via parachute to a water landing. The pricing does not include any assumptions for reusability. I'm actually fairly confident that reusability will work, provided the parachute opens. I mean... I think, if the parachute opens, I don't think the sea water is going to hurt the rocket. If you see what it goes through on the test stand, and on the launch pad, where it gets deluged with high pressure water. At our test stand in Texas we've had sleet, snow, rain that's hitting you sideways at 35 mph, extremely high winds. So, I think that if - provided we get it back, I think it will actually require very little refurbishment in order to launch again.
The first stage engine, which we call the Merlin, is of modest performance. One of the things that we haven't tried to do, is try to achieve the highest possible performance. Our goal has been to create something that is a reliable truck, essentially, rather than a Ferrari. We haven't produced, for instance, a stage combustion super high ISP engine. You need to be pretty good to get to orbit at all, but you don't really have to push the envelope any further than we've pushed it here. Our upper stage engine is also LOX/Kerosene, and a somewhat similar architecture to the first stage engine, except that it doesn't have a turbopump, and it's a low pressure engine.
The Falcon 1 development has really been winding down now for the past several months, and essentially is almost complete at this point. The development focus for about the past year has been more of the Falcon 5 which is our medium lift vehicle. It has engine-out capability, so you can lose any one of the main engines and still make it to orbit. I think that's actually a very important principle. Given that almost all airliners have multiple engines. So, if you lose an engine you don't go down, and jet turbines are far more reliable than rocket engines. So, if that principle makes sense for jet turbines, it really makes sense for rocket engines. We expect to be able to accommodate up to a five meter fairing as well. So, it'll have really - we'll be able to put some really big stuff up there.
What is the throw weight of Falcon 5 to Mars? Well, it depends on which trajectory... the zero C3 number, as I recall, is about 1200 kg, something like that. Yeah, it's like a ton. A little over a ton. Basically, it's about as capable as the Delta II Heavy is that sent the Mars exploration rovers there. So, anything that Delta II could throw to Mars, Falcon 5 could throw to Mars. "You know, couldn't really send people.. if they were alive." We'll need something much bigger than that, but you could certainly do robotic missions.
We don't like to disclose too much ahead of time, because - well, it's more a question of sounding credible more than anything else, we'd like to get some things accomplished before we claim we're going to do other things, but the plan is to do a vehicle which is in the class of Delta IV after Falcon 5 and you could apply, sort of, a common booster core approach to that and, ya know, encompass the entire range of the EELV capabilities. Up to about 60,000 pounds to orbit, maybe a little beyond that. I can say that we'll be announcing something fairly significant later this year, as far as much more lift capability that is currently represented, but ideally I'd like to have Falcon 1 launched before we make any big announcement in that direction, but you can expect that, from a strategy standpoint - call it the 7-11 strategy, we're going small, medium, large and extra large, or big gulp or whatever it is.. super big gulp. Falcon 1's obviously small, Falcon 5's medium, we'll have a large and an extra large.
Range related stuff is probably - all regulatory stuff combined is, I'd say, at most 25% of the cost - it's material, ya know, and significant, but it's probably 20% to 25% of the total cost associated with both development and launch.
The ablative portion is actually really cheap, it costs less than one of our main valves on the engine. I don't want to give away really detailed, proprietary numbers, but I can say it's really de minimis. It costs us more to hire the tugboat to go out there than it does to replace the ablative.
As far as the actual launch date, we think we'll be ready to go as soon as the Titan IV departs, which is currently scheduled to be around mid-July. There's a contingency there both on the Titan IV rocket as well as the payload, which is a class 5 payload. They won't give you specifics when there's classified stuff involved. We expect, assuming that they launch in mid-July, we expect that the range would give us - because the range has to assign a launch date to us - we assume the range would assign a launch date that is within two or three weeks of the Titan IV departure. So, therefore, if Titan IV left - basically, say August would be a good bet. As far as Kwajalein, that's actually going very well, we have our own little island there called Omelek.
We expect to have that launch site active and ready to do something with in the late August time frame. So, if Titan IV gets significantly delayed then we'll go out of Kwajalein, and we expect to actually have two rockets - one at Vandenberg and one at Kwajalein, possibly on the pad at the same time.
Actually, "we try not to tell anyone outside the space business that it's for a rocket, because they assume rockets are made of magic." If you tell them it's for a rocket, they go like well, 'I don't think I'm quite good enough to do something for a rocket,' and we're like, 'no it'll be fine.' So, we generally - there are some aerospace suppliers that do do a good job of.. I'd say Mirada Valves does a good job for example. Spincraft does a good job of spinning domes. I don't want to paint all aerospace suppliers with the same negative brush. I think there are definitely some good ones out there, but generally we find that if you want something cheap, fast and that's probably going to work, then you should use a regular commercial supplier. If you want something that's expensive, takes a long time and might work, use an aerospace supplier.
We don't want to be the ones begging to use facilities, so if we're going to use a NASA facility then that NASA facility has to behave like we're the customer. If they don't behave like we're the customer then we're not going to work there. If we have to justify why we want to work there, we're definitely not going to work there. I think, just for pace of execution reasons - because there's also a lot of paperwork involved with using NASA facilities, we've chosen to use our own facilities, but I think, like I said, for big stuff or where it's one-of-a-kind test facilities, that's probably where we'll tend to work with NASA.
Alright, thank you for having me here. I appreciate the invitation and I expect I'll be visiting Houston quite frequently in the future, given the COTS contract. You've got a great city and I always enjoy visiting. I'm going to talk about SpaceX, give you a little background, talk about the last launch that we had and tell you about the other things we're doing, long term, and I probably should leave some time for questions because I often find that's the best part of any presentation. I'd like to interact with you and really address anything that you're curious about.
SpaceX was founded about five years ago. The long term goal is to really dramatically improve the cost and reliability of space transportation. It doesn't help if you just improve the cost but the reliability suffers. Reliability is, in fact, our priority at SpaceX and cost is after that. The initial market is small government and commercial satellites with the Falcon 1. The idea behind the Falcon 1 is that it is built as a scale model so we could test out the technologies and, when we make mistakes they're made at a smaller scale, rather than jump immediately to a large rocket and make mistakes that cost ten times as much. So that's the strategy we've been executing. I think it's worked out reasonably well so far.
It's worth pointing out that the plan for SpaceX from the very beginning was always human transportation. So, can we really make some progress in helping humanity become a true spacefaring civilization, where a large number of people can afford to go to space and where it's not limited to just a small number of people per year. If we can help set space transportation on a path with continuous improvement and comparable reliability as we saw with aviation - the other similarities with aviation is that it's extremely risky, extremely expensive, but over time that improved to the point where today you can buy a non-stop flight from Houston to London, a return ticket for $500. That never used to be possible and then even when it was possible initially it used to cost ten times that amount and now it's quite affordable. That was brought about by there being constant improvement in aviation over time. If we can help make that happen, then I think SpaceX will have been successful. "If all we do is be yet another satellite launcher or something like that or ultimately only as good as Soyuz in cost per person to orbit, that would be okay, but really not a success in my book."
The long term outlook is, can SpaceX help establish a permanent presence beyond Earth? Personally I think, if we (humanity) can help establish life on another planet and extend life to make it multiplanetary, then I think that would really be one of the most important things that we could ever achieve. If you think about the important milestones in the history of life itself, and that means going beyond the colloquial concerns of humanity, initially there was single celled life and then there was multicellular life, then things acquired skeletons and that allowed the transition from the oceans to land, and then we had the development of mammals. There's probably about ten or twelve really big milestones in the history of life itself. I think, on that same scale would fit life becoming multiplanetary. I think it's at least as important as life going from the oceans to land, and arguably more important. To the best of our knowledge life exists only on Earth, so, if we don't at some point propagate beyond Earth then, if there's some calamity that befalls life here that will extinguish it. For all we know that might be the extinguishment of life itself. So, I think it's really important that we try to do it. If humanity is going to be able to do it then it requires at least orders of magnitude reduction in the cost of space transportation, and much more reliable space transportation as well.
SpaceX operates on a Silicon Valley mode of operation. Flat hierarchy, closely packed cubes, high engineer to manager ratio, lots of prototype iteration, and a best-idea-wins type of philosophy, where what matters is the merits of the argument not the status of the arguer. We started with three people five years ago and we're now over three hundred, and I think we'll probably be over four hundred within 12 months. So, we're growing pretty quickly. We're currently at 100,000 square feet of office and manufacturing space near LAX, about 2 miles south of LAX, and we're expanding to half a million square feet later this year. We have a big propulsion test facility in Texas. Just half way between Austin and Dallas. If anyone has heard of a little town called McGregor, that's where our test facility is, and we've got launch complexes in Kwajalein, Kwajalein is currently our primary launch facility. We have a dormant facility at Vandenburg and you may have read that we were recently awarded launch pad 40 at Cape Canaveral, which is a great launch pad. It was used to launch the Titan IV heavy lift vehicle until about a year ago.
This is what our first building looked like five years ago. This is what the building looks like that we've moving to later this year, that gigantic thing. The ceiling height is about 60 feet. It was used to build 747 fuselages until last year. These are some pictures of our Texas test facilities. We have a number of propulsion test stands and structural test stands. These are the Falcon 9 test stands. The one on the left is where we'll be doing the stage hold down firings of the Falcon 9. As you can see, it's a very big stand. The top of the concrete is about 130 feet and the, what we call, the stairway to heaven is this narrow stairwell that goes up about another 100 feet. It's the tallest thing for 20 or 30 miles, so we had to put an FAA beacon on top, so planes don't fly into it. There's a construction elevator on the one right and then the plumbing goes up the other right. On the right hand side, is the structural test stand for the Falcon 9 thrust fairing. That's what takes the nine engines of the Falcon 9 and those hydraulics are capable of crushing down with about a million and a half pounds of force. So it's a very stout structure.
Now I'm going to talk about the SpaceX track record to-date, which is a good predictor of future performance. The Falcon 1 was really developed from a clean sheet, to on the launch pad, in three years, and that includes the entire vehicle. The entire vehicle was designed and tested at SpaceX, almost, there were a few key pieces that were procured outside. We have a very high mass fraction first stage - 94.5% propellant mass fraction first stage. There's about 0.2% residuals included in that. Which I think might be the highest mass fraction first stage in the world, currently. I think the previous record was held by the Titan III first stage. That includes a recovery system, so there's a parachute system included there. The upper stage is pressure fed. We built the fairing, and the stage/fairing separation systems. It's worth noting that the Merlin 1A engine, the main engine on Falcon 1 is only the second American-built booster engine to see flight in about 25 years. The other one was the RS-68 for the Delta IV and before that was the space shuttle main engine. It's actually the first new American hydrocarbon engine to see flight since the '60s.
There's also Kestrel which is the upper stage engine that we developed and that's a pressure fed engine, restartable, pretty good ISP. We've got a low cost avionics system which has the advantage of, since this is designed in the 21st century and uses 21st century electronics for the guidance and control, the Falcon 1 has the first non-explosive orbital flight termination system approved by range safety. So when the range safety officer presses the stop button it just shuts off the engines, it doesn't explode the rocket. We initially set up at Vandenburg and then were forced to move to Kwajalein. So we have two launch sites and control centers. We started out with a price of roughly $7M for the Falcon 1 four years ago, and we've kept that price constant which is actually a decline in the price if you take inflation into account.
So, this is two years after starting the company and we have the qualification article of Falcon 1 on the launch pad at Vandenburg, and then about six months later we did the static fire. We had sound for this but it's not working for some reason. Unfortunately, we were forced to move from Vandenburg to Kwajalein. From May of 2005 to November of 2005 we were able to set up a launch facility at Kwajalein, which is quite difficult because the island we were given in the Kwajalein Atoll was - just had nothing on it. So we had to bring in power, water, RP - rocket propellant (kerosene), all the pressurants, offices, that sort of thing. We had many challenges - liquid oxygen in particular. Since Kwajalein is 5000 miles away from California and over 2000 miles away from Hawaii which is the nearest source of liquid oxygen. But we managed to have our first countdown right on Thanksgiving 2005, had turkey on the island. It took us four countdowns to get to the first test flight, which was in March of 2006. I need to edit this video because it has about 60 seconds worth of precursor. I think it's worth seeing this timeline because many people don't realize that we actually had the vehicle designed, built, and ready to go three years after starting the company. Unfortunately, the launch site issue caused us to delay it by another year, effectively. This flight, I'll talk about - hopefully it'll take off in a minute. The sad thing is that the problem with the first flight was a corrosion issue due to the Kwaj climate. It's a problem that would not have occurred at the launch site at Vandenburg.
Unfortunately, ya know, it came back later. The telemetry actually showed that there was a kerosene leak at the turbopump inlet pressure transducer which started about 400 seconds prior to liftoff. You couldn't see it because the wind was blowing and kerosene is actually very difficult to see. When the wind's blowing you can't actually see that it's leaking. The failure review board, which was actually co-chaired by Pete Worden of NASA/Ames, concluded that it was due to corrosion - stress corrosion cracking of the aluminum 'B' nut on the engine. That leak ignited a few seconds prior to start and the fire basically burned through the entire powered flight, and about 25 seconds into the flight it burned through a helium pneumatic line resulting in losses in helium pressurant and that caused the pump prevalves to shut and essentially turning off the engine. Other than that, everything looked good. The vehicle was proceeding along its designed trajectory within 0.2 degrees. All first stage systems were nominal, and all avionics were nominal.
We took a bunch of corrective action. We improved vehicle robustness by eliminating as many fittings as possible and going to orbital tube welds, replacing aluminum fittings with stainless steel at a slight mass penalty - actually, the stainless fittings cost less than the aluminum fittings so this was a cost savings I suppose. There were a number of other changes. We also added more detailed procedures, more personnel per process, so a couple sign off is required by all work - a technician, a responsible engineer and an independent QA person are required to sign off on all work on flight hardware - and then close-out photos. We also went through ISO-9001 certification last year. The biggest single change is, we messed up software monitoring launch and automation. We were monitoring approximately 30 variables. We went to monitoring 800, including both the vehicle and the ground support equipment, and we would have caught the fuel leak if we had this system in place. The countdown is now also fully automated which reduces the potential for human error and allows us to review the data. It also allows us to take some number of personnel out of the countdown process. People that were basically just doing the job that the computer is doing. So, although we added people on the QA side of things, we were able to reduce people on the launch ops side by having increased automation. So I think that's pretty good.
As far as Demo Flight 2, which took place in March, we just finished the post-flight review with our customer which shows that the only orbit critical issue was the lack of slosh baffles in the second stage LOX tank which caused a coupling of the controller slosh modes. We did obtain full telemetry and video past nominal ignition. There were actually three dishes following the vehicle and although some dishes were - fortunately, at any given point there was one dish with a good signal - so we were able to splice together telemetry and video and get a full mission duration. All system in flight were tested and demonstrated a high response at launch. If you were following it closely, we were able to light the engine, abort, detank, retank and launch in 7 minutes. It was considered a successful test flight by our customer and by SpaceX. We will be launching our first two operational satellites later this year. The first will be TacSat-1 for the navy research lab in October, and the second will be a Malaysian Space Agency satellite in December. We have a total of five Falcon 1 missions and six Falcon 9 missions on our upcoming schedule, and we expect to close, probably, four more Falcon 1 missions and two more Falcon 9 missions in the balance of this year. That should help bring us to 20 launch contracts in total, including the two that have taken place.
Falcon 9, this information is on our website too if anyone is curious as well, is designed to NASA manned safety margins and tolerance. It's roughly 840,000 pounds of thrust at liftoff, with a maximum mass of about 700,000 pounds. So, on the order of a Soyuz in size. Twelve foot main body diameter. Length is 180 foot with the large fairing - actually, we don't have a picture of the vehicle with the large fairing but it's the kind of the big fairing you'd see on an Atlas V or a Delta IV. The vehicle is 150 foot with Dragon, 180 with the large fairing. The nine engines on the first stage are being carefully designed to provide engine-out capability. So, if we lose an engine you can still complete your mission successfully, and depending on the phase of flight you can actually lose multiple engines and still complete the mission. Basically, it's a 10 ton to orbit type of vehicle. Some people are worried about the number of engines, but I think it's worth seeing pictures of what the Soyuz looks like on the base end. There's quite a few thrust chambers there. The Russians have a definition of engines where they only count by the number of turbopumps, but that's kind of a silly definition because by that definition the Falcon 1 didn't have an upper-stage engine. I think you really need to count by the number of thrust chambers. Each thrust chamber is an engine. Soyuz has 32 engines on the base. Saturn 1 has, or had, eight engines on the base. Each had an individual turbopump. Falcon 9 is really quite comparable to Saturn 1B. It's got one extra engine, basically.
The basic concept of operations of the Falcon 9 with the Dragon spacecraft in cargo configuration is two stage vehicle, so the Falcon 9 drops the Dragon off in orbit and then Dragon goes from that parking orbit, maneuveres under it's own power to the space station where it is captured by the arm and it is berthed to the station. At the end it reenters, same way that the Apollo capsules reentered, blunt body reentry, lands in the ocean, although we have the ability to have it land on land as well. We're just starting off with the ocean because it's easier to get the regulatory approvals if it lands in the ocean. Also, if you need to get down in a hurry, you better be prepared to land in the ocean.
The first Falcon 9 itself. We finished serial number one of the first stage primary structure which, I think, should be shipping out to the Texas testing site in a few weeks. We'll be starting the first flight with serial number two which we'll start on in three weeks. It's made of aluminum-lithium in the barrel sections and 2219, sort of a standard aluminum, in the bones. This year we'll probably produce two flight units and next year we'll be probably producing six, and after that as much as twelve. It really depends on what the demand is. We have achieved our Merlin 1C development goals, and actually exceeded them slightly. The goals were 92,000 pounds of sea level thrust and 299 vacuum isp, and we got it to 94,000 pounds of thrust at sea level and 302 vacuum isp, for a full mission duty cycle. We expect to finish qualification of the Merlin 1C in July and produce 20 to 25 of the engines this year, 40 or so next year. We're starting integrated stage and engine testing in August, most likely, and it'll be a progression of multiple engine firings, one, three, five, and then all nine. We'll do a full hold down acceptance test of the first flight stage, before we send it to the launch pad.
This is the Merlin 1C, just a recent firing. It goes on for a while. You can see the whole engine on the stand there. The chamber is milled copper liner, with a nickle-cobalt electroplated/nickle-cobalt [unintelligible], and the nozzle is a brazed tubal nozzle. It's actually an architecture similar to the SSME but way, way less expensive in terms of the way it's made. The Merlin 1C is designed for a man-rating, so it has a 50% margin above flight loads, which is actually more than what's needed for man-rating. It's also fortified against foreign object ingestion. We'll be doing foreign object testing and have done, actually, inadvertently, some foreign object tests. So far it's held up quite well. We'll be doing a formal set of foreign body ingestion tests to verify that if you chuck in a piece of aluminum or steel or some organic, or something like that, it doesn't cause the engine to come apart. We want to try to reach 25 or more cycles before any refurbishment and, ideally, something on the order of 100 cycles before the primary elements need to be replaced. The turbopump assembly is about as simple as you can have a turbopump system. It's a single shaft with two pumps on it. So they start up at the same time, by definition. We use a pintle injector which is in terms of its contamination, no known combustion instability issues. This talks a little bit about the chamber nozzle. We will be having Kevlar flack jacketing between the engines of the Falcon 9. So even if the engines do come apart explosively or in a fire, it will protect it against damaging any of its neighbors. It's worth noting that SpaceX will produce more booster engines this year than any country except Russia. We'll be producing a total of about 30 engines, roughly 5 Kestrel engines and 25 Merlin engines. I think that's more than any country except Russia. Certainly more than the rest of US production combined.
Here's a picture of the Falcon 9 first stage primary structure. We're a little cramped in that building. It only just gets out, by a few inches. As far as second stage, one of the ways in which we've designed Falcon 9 to be fundamentally low cost is that the second stage is simply a shortened version of the first stage. It's the same dome, same material, same tooling, same manufacturing line. Which may seem like a pretty obvious move, but as far as I know there's no rocket out there that takes this approach - each stage is designed like a unique spacecraft. It really takes us almost no time to make the second stage, because it's just three barrel sections and three domes. We should finish the first unit in five months and there's no problem with producing one every two months by next year. It will have a Merlin 1C vacuum version as the engine. So, the same engine that you saw there but with a vacuum skirt extension, so a big bell nozzle. The avionics, guidance and control, there's quite a lot of heritage from Falcon 1. In theory we could fly the Falcon 1 avionics and, apart from some changes to the software, it would work, but we'll be upgrading this to be triple redundant according to NASA man rating standards. We're also going to add multi-engine control to the first stage, obviously, and we'll be upgrading the avionics to higher radiation tolerance for missions that are long duration or pass beyond the Van Allen belts. All the fairing tooling is done and we should have first production quarter-section in a few months and have the full fairing in about six months.
As far as Dragon is concerned, it looks like all things are good for a demo and CDR in August. The basic structure is an isogrid aluminum pressure vessel with aluminum-lithium for the primary load path elements. The nosecone and the heatshield support structure are carbon fiber composite. We finished a structural / manufacturing test unit earlier this year which we've made using the same methods, same materials, as the flight units. All materials are on order for the flight units. The propulsion system of Dragon will use eighteen SpaceX Draco engines - Draco means 'little dragon'. They're roughly 90 pound of thrust each using nitrogen-tetroxide and monomethylhydrazine and will be used in continuous mode for orbit changes and 10 millisecond pulse mode for attitude control. So this is a fairly unique engine and pretty advanced. They use space shuttle pintle to achieve extremely fine pulse mode capability and then from a thermal standpoint it's designed to run continuously. We'll be using titanium propellant tanks with a propellant management device and composite helium tanks from RA. We'll start testing the engines this summer.
For the heat shield, we've changed to PICA as the primary material, which of course you know. PICA is 'phenolic impregnated carbon ablator'. We've started to switch to that because it is fully arc jet tested, so it's qualified from an arc jet standpoint and we have an upgraded version of SLA-561 as backup. This is pretty technical stuff, so probably a lot of people don't know what that means but, basically, it's the brake pad. We'll actually be using the SLA-561 on the Falcon 9 second stage. So keep in mind, the Falcon 9 is designed to be reusable as well as Dragon. The Falcon 9 second stage needs a heat shield in order to reenter and survive, and the heat shield we'll be using on that is actually an SLA heat shield, but we do not plan on arc jet testing that, because recovery of the Falcon 9 is an optional thing, it's not required. We feel confident enough to actually fly the second stage reentry with SLA that hasn't been arc jet tested and if it works, great, but if it doesn't work, well, what can you do.
For parachutes, we're working with urban. There will be three main ring sails and two drogues, so you can lose a main and you can lose a drogue and things are still okay. Very low nominal descent rate of 22 feet per second, which is about what a parachutist would come down at. And that allows us to transition from ocean to land pretty easily.
So, on the left there is the structure test unit that I mentioned. You can see the machined isogrid door, and although the first missions for Dragon are cargo, we're designing everything for manned loads. So it's designed to take the loads of an escape rocket and it should take high-g aborts and all that stuff, and it's also got windows, which cargo does not need. On the right you can see what it looks like with the engines on. To the left is the cargo configuration. On the basic Dragon the sleeve that connects Dragon to the booster, we use that to carry unpressurized cargo and also it'll contain the solar panels and the radiator. On the right you can see the crew configuration. We're designing it to have a maximum of seven crew. There'll be a small seat and a big seat. So, four small seats and three big seats. You can see the collar berthing mechanism of the docking interface at the top is where it will berth with the space station. The nose cone gets tossed away, and it berths to the space station on that interface. Few more pictures of it and you can see it stuck on a little section of the space station. There's also more videos and pictures and what not, that you can see on the SpaceX website.
I'd also like to say what I see the future of commercial spaceflight. I think we're really entering a new era that's going to be exciting for commercial spaceflight. There's a lot of things happening on the suborbital front with Jeff Bezos and Blue Origin and obviously Burt Rutan's Scaled Composites and Virgin Galactic and then we've got John Carmack's Armadillo Aerospace. I think John's going to do very well. On the orbital front we've got ourselves and Rocketplane Kistler and I think we'll see some of the companies doing suborbital work transition at some point to orbital activity. So, I think it's pretty exciting. If all goes well, SpaceX will be flying supporting the space station for many years to come, and potentially also supporting things like the Bigelow space station and who knows what other sorts of things will develop. I'm really really flush on the future of spaceflight and I'm really excited by it.
Okay, are there any questions?
The question was, is it possible to put Orion on top of the Falcon 9 and get it to orbit? It really depends on what the mass of Orion is considered to be. I think if it was within the capability of the basic Falcon 9, which is only ten tons to LEO, but there is a heavy version of Falcon 9 which we'll be developing with the side boosters, which is similar to the Delta IV Heavy with the common booster core approach. I believe that may be able to put Orion into orbit because that capability is on the order of 25 metric tons. So I think it's within the realm of possibility.
Just as occurred in the airline business. There was a time when no one could possibly consider aircraft as a transportation mechanism. They were things that you maybe got a little joyride in, and they were very dangerous, and lots of people died all the time on them. If you said in 1920, probably any time before Lindbergh even, ask your average person on the street if they would be able to fly from New York City to Europe nonstop in an aircraft they would have said, 'no way! That's ridiculous.' So I think you have to approach this with some degree of open faith.
Dragon will be grabbed by the station arm with the expanded grapple fixture. Yeah, it can dock to any CBM port. Well, I'm not entirely certain it's CBM port, I think there's one in particular that we're supposed to dock at. But in theory we could dock at any CBM port.
There's multiple videos. We've probably got 18 cameras in various places. Onboard cameras, ground cameras, tracking cameras, so what I showed was just a tiny sampling. There's a lot more on the website actually.
So cost-per-pound to the space station. Initially I think it's probably $10,000 per pound. About that. And that's cargo to the space station, as opposed to mass to orbit. The mass to orbit of Falcon 9 is about $1300 per pound. But that's if you're a satellite or something. To get something to the space station you need to add Dragon to the equation, and then you need to basically say, that eats up a ton of useful cargo as well, so roughly approaching 3.5 tons for roughly $70 million-ish. We have to see what the final pricing turns out to be. I'd should point out that that assumes zero reuseability. So if we are able to make the reuseability economics work, that price could be substantially lower.
Well we expect do a lot of commercial flights to geosynchronous orbit. Hopefully launching some planetary missions, stuff to Mars or the Moon or that sort of thing.
It actually is getting harder and harder for me to write blog pieces. I used to write them quite frequently, and now I've got a pretty big family, and business things that take up a lot of time, so the blog stuff tends to fall to the bottom of the priority list. And there are a lot of times that I feel really guilty about not updating the blog. But I would like to continue to write blog pieces and also try to get other people to write blog pieces. At Tesla a lot of people write blog pieces, I only write them occasionally. As far as Tesla is concerned, the first production car of the Roadster should be out in September. End of September, maybe October. And then Tesla is working hard on a Model 2 which is a $50,000 luxury sport sedan, and that's 4-door, 5-passenger, about the size of a 5-series BMW. The targeted debut is the end of 2009.
Yeah, pogo. We have pogo suppressors on each of the 9 engines, the individual pogo suppressors. So that should hopefully do the trick. We have a couple of outside experts that are looking at our pogo suppression devices and helping us design them. [unintelligible], some of you may know him if you're familiar with pogo stuff. And there's a few other people we're bringing on board as well to look at that, but pogo is something we take seriously.
Biggest risks. Hmm. I don't know what the biggest risk is actually. There are lots of risks, but I'm not sure how to order them exactly to say which one is the biggest one. You know, the last Demo Flight 2, the slosh mode coupling with the control frequency of the second stage was number 11 on the guidance control risk list. Number 11. And if you were to merge all those risk lists, I mean it would have been number 120. And that's the one that went wrong. So it's a very subjective thing to figure out what the real risk is that's gonna bite you in the butt. Fortunately with the knowledge that we'll gain from Falcon 1, we're not going to make in retrospect an elementary error like not having slosh baffles on the stage. So I think we'll be safe from that sort of stuff. It's possible we could have some challenges getting to the berthing process, I don't know that much about it, it's not an area with which I'm all that familiar. We're learning a lot at SpaceX and we have some outside companies that are very familiar with the process helping us, I see Dave over there from [?], and Harold is helping us with the safety stuff. Boy I wish I could give you a- I don't know what the biggest risk is. They're all really big, and they all take a lot of attention. Sorry.
Actually I didn't even know it was his 100th anniversary. Good to know! He's written some good books. I like 'The Moon is a Harsh Mistress,' that's a good one.
We've certainly made some use of existing hardware, such as many of the things you mentioned, quick disconnects, regulators, certainly control valves, most of our control valves are from Maratta, which provided control valves for the Shuttle. We use Ketema vent relief valves, we use Stanford Mu regs. There's a lot of existing satellite componentry in Dragon.
The big stuff has been developed from scratch. We kind of have to do that, because if we were to buy- if we were to cobble together stuff from existing quasi-official components, then we would be unable to reduce the cost, because to the degree that you inherit the legacy components, while you may inherit their heritage of course, you also inherit their cost. So of necessity we're forced to make the major items like the engines and the stages and the avionics and the launch ops and all that, do that from scratch.
I've invested $100 million, approximately. A little more than that. We've spent more than that. That's venture capital. We've spent more than that because we've received payments for launch. We've got the first two Falcon 1 launches we've received advanced payment on, a number of the other launches, we've passed some COTS milestones, so I'm not sure exactly, I'd have to think about it, I'd probably consider that proprietary, but we've certainly spent in excess of $100 million thus far, although I've only invested roughly $100 million.
Yeah, I think it would be fun to ride in Dragon at some point. Some people sometimes think that this is a round-about way of getting me personally into space, but it would be a lot cheaper to buy a ride on the Soyuz. A lot less hassle. But I'd definitely like to fly at some point, that would be great.
COTS has been really helpful in speeding things up. We were already going in that direction long term anyway, but it would have taken us a long time, it would have [unintelligible], and also we wouldn't be able to take advantage of the expertise that NASA has, which has been quite helpful in designing a reliable vehicle. I think the COTS program has been really super helpful, it's been great dealing with everyone there. And a lot of people are saying, 'isn't NASA going to smother you or cordon you off from efficient things, and that hasn't been the case. No complaints thus far at all, it's been great.
The Vandenberg story is a long and sad story. But yeah, it was a bit unfair, but these things happen.
Actually the SpaceX manifest is on the website. So if you're curious about the upcoming satellites are being launched, and what's the customer, and when they're being launched, there's actually an updated launch manifest on our website.
to have a really short time ideally between the contract and launch. And in order to make reuseability work, then you need to have a constant stream of vehicles coming back and being refurbished and flying every month or even more frequently than that, then it's gonna be relatively easy to slot someone in.
Actually our schedule matches pretty well to the planned end of the Shuttle in 2010. We have our first demo flight of Falcon 9 with Dragon at the end of next year, and then we'll get two more demonstration flights, one in summer of 2009, and another at the end of 2009. And that third flight will actually culminate in the transfer of I guess demonstration cargo and the return of demonstration cargo back to Earth. We probably cannot at this point load the real cargo, it has to be demonstration cargo because otherwise it would violate some sort of law-based acquisition or something to that effect. So if that schedule remains true or doesn't slip too much, then in 2010 we should be able to start delivering cargo, and then depending upon when the COTS option B gets exercised, which is what adds the escape tower, the life support system, the seats, all the crew-related stuff, plus the ability of the crew to take over in the event of an emergency. So depending on when COTS B gets activated, we should be able to I think take people to the space station probably 2011 something like that. It really depends on the way things get going though.
Well if Bigelow puts up a private space station we would love to take people there and back. So I think that would be super synergistic. We do have a Bigelow launch on the Falcon manifest, for launching I think it's a 2/3rds scale version (or something of approximately that size) of one of his inflatable space stations. So irrespective of what happens with the full scale version or how well that does or whether he's able to sell people the space station or lease it or whatever, we do have one launch of Falcon 9 with Bigelow.
So how many launches can Falcon 9 take before it has to be permanently retired? I think it's really hard to make an exact prediction. We really have to look at the condition it's in when it gets back. The engines we're aiming for at least 25 full mission duty cycles before any refurbishment is required of significance, and ideally upwards of 100 cycles, so we'd like to get something like that out of the rest of the Falcon 9 as well. So that's our target - at least 25, hopefully as many as 100. But it's really going to depend on the condition things come back in. And I think like a jet we'll have a maintenance schedule. So there will be some things that need to be replaced every flight, some things that need to be replaced every 5 flights, some every 10 flights, some that really are just never going to wear out in any kind of reasonable time frame. And then we'll have an inspection schedule. So just like a jet engine has a hot section inspection every certain number of hours, and you replace this component every certain number of hours, we'll have something similar for the rocket. So we want to try to overall just sort of drive things in the direction of the way jet engines are operated. So I don't think it will ever be as good as that, but we at least want to try to push in that direction.
I actually was fond of space, well first of all I grew up in South Africa, you know, not really much space stuff happening there. And then I only got my citizenship like last year, and that was five years after I got my green card. But I've only actually been allowed to legally look into space for five and a half years. I apologize for not getting that last 6 months in there, but literally I could only legally look into space for the last five and a half years.
No, it was just general theoretical and experimental physics. I was undergrad only. I actually originally was going to go out and get a PhD at Standford in the material science and physics of high energy density capacitors, so very applied, almost really engineering. And that was for use in electric vehicles. I think there's the potential to do some very interesting things if you can drive the energy density of a capacitor up high enough then it's really the ideal solution for electric vehicles. They have a quasi-infinite cycle and calendar life, and extremely high charge/discharge rate, really you'd be able to charge your car faster than you can fill it with gasoline. If somebody could come up with a capacitor with enough energy density then that would really be the optimal solution for an electric car.
So the plan going forward is obviously to launch a bunch of Falcon 1s. Make any - I'm hoping make any remaining mistakes that remain on the Falcon 1, so we that we make either no mistakes on Falcon 9. The first Falcon 9 launch is intended to be sometime next year, I'd say probably sometime in the second quarter-ish. We do expect to have Falcon 9 at Vandenberg by the end of year, and we're working to finish all the qualification tests. We'll probably finish the first stage but not necessarily the rest of the vehicle. We will have a fully assembled vehicle at the Cape [?] by the end of the year.
And then Falcon 9 Heavy would be in a couple years. So if we launch Falcon 9 next year, about two years after that we launch Falcon Heavy with a kerosene upper stage, and probably I'm guessing 2-3 years after, so 5, 5ish years from now is is when we hope to have the cryogenic upper stage (the hydrogen upper stage), although that's... there's a lot of risks associated with that development. It's a very difficult stage to do, and we want to ensure that, at least foundationally, it's capable of very reliable restart. [unintelligible]
Anyway we've got our Dragon spacecraft in development, which is what will replace the Space Shuttle after that retires in 2010, initially for cargo transport to the station and cargo return to Earth, although we've been cited to require minimal changes, in fact almost no changes, to carry crew. There is some additional hardware that needs to be built, in particular an escape tower, mostly seats (but that's relatively easy), and some enhancements to the life support system. We already have most of the large support systems for the cargo version of Dragon which we require to carry biological cargo to the station and back: mice and plants and things like that. And some of the hardware is quite sensitive so we have to maintain temperature and O2 within a narrow range, humidity, that kind of thing.
So yep, that's how things are sort of progressing, [unintelligible], but we're certainly making progress, we'll keep going until we ultimately have the capability to go to Mars, and not just get to Mars, but do so in a manner which is substantially better economics than are predicted today. And I think we ultimately need to get to a cost-per-person of around maybe a million dollars or two million dollars for a one-way ticket. It is much eas- yeah. It's, I dunno, I guess probably five times easier or thereab- four times easier to just get a one-way thing than to do a return. And if people are going to go there to settle, then hey, you don't need a return ticket. When people came over here from England in the beginning I don't think they bought return tickets.
But anyway, I think if we can get it down to a few million dollars, if we can get to some sort of point where the cost of a ticket to Mars is less than, say, the average house price in California, then I think there's some number of people who would be willing to sell their house and all their stuff and go to Mars. At least enough to get things started.
What questions can I answer?
It is not practical to carry an extra battery pack in an electric vehicle. So for the battery pack swap there would have to be some kind of swap station. However if you have a 300 mile range car, you're really not talking about a lot of swap stations. You just need say one between LA and San Francisco. And then there's the question as to whether people will want to swap battery packs rather than simply park their car at a highway rest stop, grab a meal or a coffee, hit the restroom, come back in 20 or 30 minutes and you're recharged enough to complete the journey. I think most people will probably do that. But we wanted to preserve the optionality of a fast pack swap just in case there were people in a hurry.
Right, so Better Place actually got the idea for battery pack swapping from Tesla, when Shai Agassi came and visited. We told him that we were going to incorporate battery pack swapping, and he was like 'Oh, good idea!' So yeah. Not that I think it's a genius move - you have cellphones and laptops that have battery packs that swap. But we're not currently working with Better Place. Not that we don't like them or anything, but we don't see any technical advantage or anything to working with them. It is not obvious how we'd make the consumer experience better with Better Place.
Well, it's sort of on the order of 1000 pounds of propellant that you need to expend to land propulsively.
Well, the rocket booster is what delivers you to a parking orbit, then you use a little bit of propellant to maneuver over to the space station, then depart from the space station, initiate a deorbit burn, control your reentry during the descent phase. In total there's about 3000 pounds of propellant, so you use maybe 1000 in terms of getting to the space station and departing and deorbiting, about 1000 on landing, and you'd have probably 1000 spare, roughly speaking. Now if there were something unusual that happened like you had to temporarily abort an approach to the Space Station, then you might use another 500 pounds of propellant or something like that. We will actually still have parachutes as an emergency on Dragon. So you test the engines at say a couple miles of altitude, make sure they're working, if they're not then you deploy the emergency parachutes. Kinda like the Cirrus aircraft [recovery parachute].
It's not yet in production! On a go-forward basis, most of the engineering is done. We're at the 90% engineering complete stage right now. The factory - we were fortunate in being able to purchase the NUMMI factory in California which was jointly owned by Toyota and GM, although in recent years it's only been making Toyota products. It's where they made the Carolla and the Tacoma. So we were able to buy (at a very good price!) a great factory, and thus minimize the incremental tooling cost to produce the Model S. So there's an existing paint shop, so we only have to modify a paint shop instead of building one from scratch. There's stamping machines and all sorts of things there that are helpful.
The two biggest milestones this year I think probably getting our stamping line operational, to stamp the aluminum body for the aluminum body panels. The Model S is actually going to be the only aluminum car made in North America. The Audi A8 and a few of the advanced German cars are aluminum, but currently there are no aluminum passenger vehicles made in the United States. Although for me, coming from the space arena, it's like, 'obviously you'd make it out of aluminum. What else would you make it out of?' Steel is really heavy and not great.
And then the second thing is the paint shop. Painting a car is actually really difficult, if you want to get a spectacular paint job. And we're aiming for something which we call a 'piano finish,' like the kind you'd see on a grand piano. Something that's noticeably better than any other car. So that's a high bar, particularly to do so without adding a lot of cost to the process. So we're optimistic that we'll get maybe not all the way there, but most of the way there. Those are the big production milestones this year.
I'm not getting a lot of hands. Somebody way in the back of the room!
There will certainly be issues that we have to deal with. But by less than one percent, I mean less than one percent annihilation of humanity. Even if we do massively increase the CO2 concentration in the atmosphere, it is unlikely to result in the annihilation of humanity. It could kill a few hundred million people due to rising sea levels and that kind of thing, which is obviously not good, but it's not an annihilation event. But if you look at the fossil history, there have been several annihilation events, mostly due to meteors of one kind or another, possibly some due to supervolcanoes, and some due to who knows what.
So we obvious suffer from some risk of a similar annihilation event, and potentially something man made like a supervirus. It could be something like with the CERN Large Hadron Collider potentially could see a press release saying, 'the good news is we've discovered a new law of physics. The bad news is there's a small black hole that's rapidly growing.' Now I think that's extremely unlikely, to be clear, but you know, we've discovered new laws of physics before.
Well, I'm not a venture capitalist. People sometimes think I am a venture capitalist, but actually I am... uhh, I am an engineer. So when I apply capital it is to my own companies, and occasionally to the companies of close friends of mine, where I do zero due dilligence and I just basically invest on the basis that I think they're good and likely to succeed. So I'm not the guy to pitch on ideas to be funded, because that's what a venture capitalist does. It's better to pitch a venture capitalist.
Well, I suppose if it were to help the space program. I would be quite surprised if that were the case. But it's possible, yeah.
it's very doable.
And the second stage, the second stage is harder because you're pound for pound trade-off with payload. Any mass that you add - in terms heat shield or reentry systems, is directly subtracted from the amount you can put into orbit. Whereas the first stage is anywhere from a 5:1 to 10:1 ratio. So you add 10 pounds of mass and it takes away one pound of payload. And there's also a lot more you have to do with the second stage. You need a much more significant heat shield, you have to de-orbit the stage, control it during reentry, it's got to have some lift-over-drag so that you can steer back to the launch site, and then you've got to either propulsively land or perhaps use a parafoil or something like that. All those things cost mass.
But that's kinda how I think it can and should be done. That basic architecture is what we're going to try to do. The trick is to do it with- just very mass efficiently. You've only got that three, maybe three and a half percent of mass to play with, and you want to try to get say 2 percent of your liftoff mass to orbit. So that only leaves about one and a half percent for everything else, which is not much.
Yeah, I think long term you'd see that sort of thing. And maybe even in the initial phase. It kind of depends on whether the United States builds a super heavy lift or not, like a Saturn V class vehicle. If you have a Saturn V class vehicle you don't need to do on-orbit assembly. If you have something smaller than that then you do if you want to go to Mars. So it kind of depends on how things unfold in that direction. I think it would be great to have a super heavy lift vehicle. If it's done in the typical government way I think it will not come to fruition, because of massive schedule overruns and massive cost overruns. So it really depends on whether NASA decides to take a commercial approach to super heavy lift, if there will be super heavy lift and obviate the need for on orbit construction.
And you know, when there's a lot of traffic between Earth and Mars I would expect there'd be some large space cruiser that's circulating between Earth and Mars, and you just take a small shuttle craft up to the space cruiser if you will, and the space cruiser gets refueled from Earth or from Mars. But that's a long term optimization, and it would be driven by a lot of traffic occurring between the two planets.
Well I think it's generally good. Well NASA's our biggest customer for SpaceX, so they certainly are huge on the customer front. About 40% of our launches are for NASA. They haven't- they did pay for demonstration flights, so they were sort of a quasi-funder, but it was specifically for their needs. So it wasn't just sort of, 'here is some money, do what you want,' it's, 'we have this specific need. We'll pay you as you demonstrate milestones in that direction.'
In the case of Tesla we were fortunate enough to receive a government loan last year, which was unrelated to the bilout. Unfortunately it was announced at the same time as the bailout, so people assumed it was somehow bailout, but the loan we received was actually part of a program that was initiated in 2007 in boom times, and one of the requirements of that loan program was that you had to be a viable entity in your own right, and provide 20-30% of private capital as a matching contribution. Which therefore excluded for example GM and Chrysler, who were bankrupt. So Ford, Nissan, and Tesla did receive essentially lines of credit, which in our case were specifically related to the engineering and production costs of the Model S. So it was certainly helpful from a capital dilution standpoint. If we repay the loan early then there's no capital dilution, but if we don't repay the loan early then the U.S. Government gets a bunch of stock warrants in Tesla. So in the grand scheme of things of all the various government deals that are done, I think this is one of the smarter ones.
There will be many sources of electricity that are sustainable. Wind, geothermal, hydro... but my personal view is that we'll generate more electricity from solar than any other single source. It may not be a majority, but I expect at least a plurality from solar power. That will be a combination of photovoltaics at the point of use - the roofs of houses and businesses, which is also good from the standpoint of not requiring additional power lines. And then at the power plant level I think we'll see a lot of solar thermal generation. Where essentially you're just using the sun to heat a working fluid, and then steam and power a turbine. There are a bunch of those projects that are going to come online in California and other places in the united states soon.
And if you think of solar power, beyond humanity's need for electricity, the Earth is almost entirely solar powered. The entire weather system is solar powered, (almost the entire weather system is solar powered, some of it is from Earth rotation). All precipitation is solar powered. The only reason we're not a frozen dark ice ball at four degrees kelvin is because of the sun. The whole ecosystem is solar powered. Plants are essentially a solar powered chemical reaction. So really we're just talking about replacing this itty-bitty thing called electricity and having that also be solar powered.
That was the intent! That was the whole idea.
No, I don't think so. Like I said, the whole purpose of Tesla was to draw the car industry into electric cars. So I'm- the more electric car programs more I see announced the happier I am. "The success of Tesla as a company financially is going to be a function of the quality of the products that we produce. So we have to make better cars than, say, GM and Chrysler. I don't see that as a huge challenge."
The sad thing is that generally in the United States, if someone can afford an expensive car, they do not buy an American car. And I think it's- I think in the 60s the U.S. made great cars, and before that made great cars, but then something happened in the 70s. I don't know what happened. A lot of bad things... architecture went to hell, fashion was questionable, and our cars turned to shit. As a friend of mine summarized, the Tesla strategy long term is to make cars that don't suck.
So I think we'll be ok. There's some vindication in that Toyota, which is the the largest car company in the world and the leader in hybrids is an investor and partner with Tesla. If it was easy, they would simply do it themselves and not bother to partner with us. Daimler was the inventor of the internal combustion engine car, and the maker of Mercedes and Smart, and again they would not ask us to be a supplier to then nor would they be an investor in Tesla if they thought it was a simple matter to replicate what we are doing.
No, aluminum is great. The Audi A8 is an aluminum car. All the airplanes you fly are mostly aluminum. Aluminum is a little harder to work with in terms of bonding and joining. It's harder to weld than steel for example. So it's technologically more difficult to work with, but it's a superior metal for anything that weight is important. That's why planes are not made of steel. In fact, the Model S, our design target is to meet five star crash rating by 2012 standards, which are higher than... a car that's five star by 2010 standards is only a three star by 2012 standards. So we have a very high bar we're aiming for from a safety standpoint. And obviously I'll be driving the car, my friends will be driving the car, our beloved shareholders will be driving the car, so safety is extremely important. I don't think there will be a safer car on the road.
Oh sorry. So the price, it's kind of like the 5-series BMW, so depending upon configuration it would vary from about $50,000 to about $100,000.
I generally think that there's been a bit too much outsourcing in general. Both outsourcing out of California and outsourcing out of the United States. Businesses sometimes tend to be a little sort of fad-y. For a very long time there was a very strong outsourcing fad. But I don't think people really looked at the fundamentals in a lot of cases when they outsourced. Particularly when the technology is developing rapidly, it's important to have a very tight iteration loop between engineering and production, so as soon as you design something you can bring it to production right away. And the the engineers can go on the floor and see the mistakes that they've made, the production people can talk to engineers and say, 'here are some good ideas,' and so you can evolve the product and get to a better design solution faster. I think this is an important thing that's often overlooked. At SpaceX our rockets are lower cost than the Chinese, the Indians, anyone else, and that's before reuseability is taken into account. I think it's largely because of that tight iteration loop.
And in the case of Tesla, the Freemont plant, the NUMMI plant, until April 1st of last year they made the Corolla there which is a $17,000 car. So if it was fundamentally too expensive to operate in California, how could they make a $17,000 car? So I think in California we do need to be cautious about adding more and more costs to living here. I do think we're close to- we're on the cusp of a tipping point, I think if the taxes start getting much higher than they are- in California the marginal tax rate is 11%, you could go to say Washington and pay 0%. So it's an expensive place to live. I like living in California. So I'm here, but I know many people people who have moved out because the taxes are too high, or workers comp and other costs are too high. California does tend to over-regulate a bit. So I think generally California is going to have a real tough thing to do, which is it's got to cut the cost of what it spends on the state level, and maybe even reduce the taxes a little bit to be competitive with other states, and deregulate. Those are the things that could be done to increase employment in California. Politically these are difficult things to do, and I'm not entirely sure how California gets out of this bind. It might have to be a proposition or something, because the legislature seems to be unable to arrive at anything sensible.
No, no material limitation in space. Silicon, don't worry about silicon from a limitation standpoint - there's lots of silicon. Copper is probably OK too. There's quite a lot of copper in the world. For battery packs, one of the challenges we had was cobalt actually, cobalt is only available in a few places in the world, it's quite expensive, and one of the biggest source is the Congo, which tends to vary in its political stability. That's why going to the Model S we changed the chemistry to require only about a quarter as much cobalt, and thus reduce the cost of the battery pack, and also increase the energy of the pack.
If you're going to worry about any material shortages, maybe some rare Earth elements are maybe a concern. China has a huge concentration of rare Earth elements which are used in permanent magnet motors. To avoid that issue, well actually there are other reasons as well, but Tesla uses an electric motor design that doesn't use any rare Earth elements. I wouldn't worry about it too much on the commodity front, except on the non-reusable commodities like oil and that type of thing. By the way, oil's gonna go way way way up, if anyone's wondering.
I'm not too worried about recharging stations. The great thing about electricity is that it's really ubiquitous. There are more power outlets than anything. There are more power outlets than access to any other kind of power by orders of magnitude. In the case of Tesla and most of the new electric cars that are coming out, the charger is built into the car so you can charge it anywhere. If you want to charge fast, you're going to need a high power outlet. What we're seeing with use of the Roadster is that almost all charging happens at home. Ninety percent plus.
Now it is important that you've got to have a range that's reasonable. So if you've got a 50 mile range, then you can't do a lot of round trips. 25 miles is your max, and you're being really sporting if you do that. As you reduce the range, you start to require a lot of charging stations, but as you increase the range the number of charging stations you need tends to drop with the square of the range. So you've got a circle you can travel in, so the bigger that circle is the fewer recharging stations you need. For something like the Tesla Roaster, you only need one charging station between LA and San Francisco. It's a 400 mile trip, you've got 250 miles of range, so you need one charge station. But if you have a 50 mile range you'd need probably 10 charging stations. 8-10 charging stations. So I think you'll really only see a lot of useful charging stations, at least as far as Tesla cars are concerned, on the interstates. So when you're making really long distance trips, that kind of thing. But otherwise not a lot.
In the case of SpaceX, unfortunately the supply chain in the rocket business is very shallow. Very often there's only one supplier, and it's a very expensive supplier, and they're really not designed for reuseability, so you're screwed if you don't make it yourself basically, for the most part. So that's lead to SpaceX being maybe 70-80% of the rocket being built in-house, literally from raw material. I guess another way to look at it is, to the degree that you inherit the legacy components, you inherit the legacy cost structure and limitations. So it's not from any sort of religious bias toward insourcing, but rather on the fundamentals we were driven to do that. In the case of Tesla the automotive supply chain is much better. It's much more competitive, there are many suppliers for any given component, and so maybe 40-50% of the Tesla Model S is insourced.
You mean use parts that are in our rocket in something else that they're doing? Not yet. There have been a few inquiries about using our engines in some other programs, which we've responded to, and it could happen that our engines are used in some other government programs.
We do. Yeah. Just to distinguish between heavy list and super heavy lift, because there are rockets like our Falcon Heavy, there's the Delta IV Heavy, and these are on the order of- in the case of the Delta IV Heavy it's maybe 25 tons to orbit, in the case of Falcon 9 Heavy it's maybe 30, 35 tons to orbit. But compared to the Saturn V, which was over 100 tons to orbit, there's a pretty big difference there. So generally we call that super heavy, in the 100 ton plus class. SpaceX would really like to build a super heavy, and I think we could do it for a small fraction of what what people think it would cost. "I've gone on record as saying I think we could do a super heavy development for on the order of two and a half billion, other estimates are about 10 times that. And the super heavy that I'm alluding to would have about a 160 ton to orbit capability, so way more than a Saturn V. In fact, I've even gone as far as to say that I will guarantee that personally. And stake everything on SpaceX that it will happen. So, I mean we'll see."
There are strong political forces that don't want us to do that, so I'm trying to eliminate any argument that they could have for not at least allocating a small portion of the super heavy lift funding to give us a shot at making it work. They can take all the rest of the super heavy lift funding and apply it to the traditional way, we will take the sort of 10-20% of that number on a fixed milestone basis (so if we don't achieve the milestone, we don't get paid), and I will personally guarantee it. So if we don't achieve the milestones then that money can then be applied to the other programs, so it's a no-lose proposition. But logic does not always prevail.
I think Tesla will be ok. Actually on balance the federal government has been helpful to Tesla. In the space arena... Man, this is a complicated situation. Out of budget necessity, NASA has gone commercial as far as cargo transport is concerned. And then last year President Obama said, 'we should also outsource astronaut transport to commercial entities. If we can fly Boeing airliners and Airbus airliners and feel good about that, then why can't our spacecraft be built by commercial entities too?' There was a battle royale last year against that, which won by a 3% margin in the House of Representatives. That was a hairy battle. But it is moving in that direction. It's kind of unavoidable. It's going to be that or nothing. So I think it's going to be that. So overall I'm pretty optimistic about it. I probably worry slightly more about, in the space arena, about some of the big government contractors. They would definitely like to see SpaceX die. I'm sure I am being tortured in effigy right now. You know when you see a movie, and there's the bad corporation in the movie that's like the big defense contractors. Those are our competition in a lot of cases.
I'll take a couple more questions, and then...
Yeah, that's happened many times. Actually, we didn't start out insourcing 70-80% of our hardware. Initially we thought, 'well, we'll try to do as little as possible,' but then over time we just insourced more and more out of necessity. And we found many times we'd sign a deal for supply of a component, and then that supplier would find a reason to triple the price. Basically as soon as they thought we didn't have any way out, then they would start with the conclusion which is 'triple the price' and insert reasoning. That's happened several times. And then we've insourced the part to best price, but often with a lot of grief. I'm very pleased with how things are now, but it was very hairy for a couple years there in late 2007 to say the first half of 2009. We came close to not making it.
Last question. Is there anyone I've been ignoring for a long time?
Richard who? No, actually Richard Branson is a friend of mine. He's a very affable guy. He's not a technologist. So he's sort of, his strength is brand and marketing and that sort of thing. He's very good at that. I think going into the rocket game is tricky, because it's very much a technology problem. So I think he's going to encounter some challenges there. Also, what Virgin Galactic is doing is a suborbital flight, which is only about 1.5% of the energy you need to get into orbit. So it is a much simpler problem. Basically you shoot up to about 60-70 miles, and then you fall down. That's essentially what they're doing. It's like the world's best roller coaster ride. So it's like a really fun trip, but it's not a technology path that could ultimately take us off- to other planets, and that kind of thing.
But I think for a lot of people there's not a clear distinction between getting to space and getting to orbit. And space is somewhat of a loose definition, it's kind of 'where does the atmosphere get thin?' And you can sort of define, 'how thin is thin?' It's pretty darn thin at 60 miles altitude, but you can't have a satellite up there because a satellite would, the orbit would decay very quickly and it would reenter. And going up and staying up is actually about how fast you're zooming around the Earth. It takes much more energy to do that zooming around the Earth bit than it is to get to altitude. In fact the only reason you need altitude at all is to get out of atmospheric drag. If the Earth had no atmosphere you could be orbiting Earth at an inch off the ground.
So to get to orbit you need at least to go about 25 times the speed of sound for Earth, and the energy required scales with the square of velocity, so that's say 625 units of energy. To do a suborbital flight such as what Virgin Galactic is talking about you need maybe about Mach 3, which is 9 units of energy. So it's a pretty huge difference. And then if you want to reenter, you have to burn off 625 units of energy, or burn off 9 units of energy. So it's just a giant difference.
So alright, thank you!
Thanks for coming.
We're super excited at SpaceX to announce some of the details around the Falcon Heavy rocket, which is our large rocket development - our really large rocket development, and this is something we've alluded to in the past but I've only just recently completed the design and I've been able to increase the thrust and payload capability of the rocket considerably over our previous estimations.
With Falcon Heavy we'll be able to put well over 100,000 pounds into orbit. In fact, it's looking like at least on the order of 117,000 pounds, maybe even above 120,000 pounds, depending upon what the final performance numbers look like. This is a rocket of truly huge scale. As we mentioned in the press release, this is - the 117,000 pounds is more than a fully loaded Boeing 737 with 136 passengers, luggage and fuel - in orbit. So that is, really really humungous. It's more payload capability than any vehicle in history apart from the Saturn V, and so opens up a range of possibilities, for government and commercial customers, that simply aren't present with the current launch capacity. If you compare our lifting capacity to, say, the space shuttle or the Delta IV Heavy, which are the two most capable vehicles in the world today, we're twice - more than twice - the capability of either of those vehicles. Although the space shuttle is obviously retiring this year - I think - this is something America can be really proud of - the fact that there's actually going to be a vehicle with twice the capability of the space shuttle, that going to be ready to launch at the end of next year.
The initial launch will take place from Vandenburg air force base in California, where we have space launch complex 4 and shortly thereafter expect to be launching from Cape Canaveral as well. So we'll certainly have that capability on both coasts. We expect to be launching Falcon Heavy a lot, actually. Whereas Falcon 9 can address about half the market, Falcon Heavy can address the other half of the market which is the largest government and commercial satellites, as well as - as I mentioned - as well as opening up new market opportunities for satellites and spacecraft that simply cannot be carried to space by the currently available rockets. So I expect to see, potentially new opportunities arising because of Falcon Heavy.
Also, from a cost standpoint - which is critically important in space, because launch costs have been steadily rising over the years, Falcon Heavy represents a huge economic advantage. "Falcon Heavy costs about a third as much per flight as Delta IV Heavy, but carries twice as much payload to orbit, so it's effectively a six-fold improvement in the cost per pound to orbit." In fact, Falcon Heavy sets a new world record for the cost per pound to orbit of around about $1000. So that's a pretty huge leap in capability.
Let's show the video.
In addition to representing a new world record in cost per pound to orbit, the Falcon Heavy is also designed to meet the NASA human rating standards. For example, it is designed with structural safety margins that are 40% above the actual flight loads that it expects to encounter, as opposed to normal satellite launchers which are designed to only 25% above the flight loads. It also has engine-out capability, so you can lose multiple engines on the vehicle and still complete the mission. It has cross-feed between the cores which is the first time any rocket has been able to cross-feed propellant between the cores. Triple-redundant avionics. All of this is such that it can launch people if need be and do so safely.
Also, it has so much capability, so much more than any other vehicle, that we can start to realistically contemplate missions like a Mars sample return - which requires quite a lot of lift capability because you've gotta send a lander to Mars that still has enough propellant to return to Earth. If you try to do a mission like that with a smaller vehicle you have to do several launches and either do orbital rendezvous or do some sort of much more complex mission whereas with Falcon Heavy you could potentially do it with a single flight.
Let me turn it over to questions.
The payload to Mars would be about a quarter of its payload to LEO. So we're talking about, something like, 30,000 pounds to trans-Mars injection. To the Moon it would be about, maybe, 35,000 pounds.
The Falcon 9 is suitable for transporting people to low Earth orbit, like to the space station and back, but Falcon 9 doesn't quite have the lifting power to go beyond the space station, whereas Falcon Heavy go, really, much further than low Earth orbit. Falcon Heavy is about half the lifting capability of a Saturn V, so, in principle you could do another mission to the Moon, just by doing two launches of a Falcon Heavy. Perhaps one that delivered the return vehicle to the surface of the Moon and one that delivered the lander to the surface of the Moon. As far as human standards are concerned, the Falcon 9 and Falcon Heavy are designed to meet all of the published NASA human rating standards. So it would only be if there's some unpublished standard or some new standard that's about to be published - that it would not be in compliance.
Falcon 9, we've always said it would be about 3 years from when we received NASA funding to conduct a demonstration, and the gating fact on that isn't actually the rocket, it's the launch escape system on the spacecraft. Falcon Heavy would be, really, capable of launching people as soon as we've proven it out with a few launches, really. There's no changes, that we are aware of, that we would make to the Falcon Heavy that would be required to launch people. There may be changes to the spacecraft that it carries, but not to the launch vehicle itself - or if there are, they're very minor. So yeah, it certainly opens up a wide range of possibilities, such as returning to the Moon and conceivably even going to Mars, although it would require probably twice as many launches as a Moon mission.
We have an upgrade in the works for our Merlin engine. Going from 95,000 pounds of sea-level thrust to 140,000 pounds of sea-level thrust. So, pretty substantial upgrade. We're also doing some design improvements to improve the manufacturability, so we can go to a high rate of engine production. We're anticipating, if launch demand ends up being like we think it is, "we'll have a production rate of about 400 booster engines per year. Which, I think, would be more engines than the rest of the world production combined. As it is, we're already more than the rest of US production combined. Although that's not saying much. Unfortunately."
We do not have - so we're expecting to do an initial demonstration flight of Falcon Heavy, that doesn't have a primary customer, although that could change. It'll probably have some smaller secondary satellites on-board. However, we are highly confident of announcing customers for Falcon Heavy for the second and subsequent flights, and we're in liaison discussions with government and commercial customers in that regard.
Even on Falcon 9 we have been launching secondary satellites, we launched some secondary satellites on the last flight of Falcon 9. With the upcoming flight of Falcon 9, the first one that's going to the space station, that will carry a couple of ORBCOMM satellites. With every, with most missions we expect to be launching secondary satellites. It's not always with the same dispenser, although that would make it a lot more convenient, but I think it's likely that most of our flights will carry secondary satellites.
I think you should definitely count on Falcon Heavy being there for the long term. When it succeeds, and certainly that is right from the initial launch as it was with Falcon 9. We're starting off at Vandenburg but we'll then be transitioning to the cape. We'll be upgrading our launch pad at Cape Canaveral so that we can process both a Falcon 9 and a Falcon Heavy simultaneously and they can both roll out to the pad. We're also investigating the possibility at the cape of using one of the old shuttle pads for the Falcon Heavy. That's a possibility but our default plan is to use our existing launch pad but upgrade it such that there's a hanger where you can process Falcon 9 and that rolls to the pad, and another hanger - kinda at 90 degrees - where you can process Falcon Heavy and either one of them can roll to the pad, so you can have dual processing take place.
In terms of the number of jobs, it really depends on the launch rate, so I'd expect that number to grow over time, but I think once it really gets going - and we do expect more launches to occur from the cape than from Vandenburg in the long haul, with Falcon Heavy, because most of our commercial customers want to go to GTO which, obviously, is cape launches. So we're expecting probably a couple of hundred jobs. It depends on customer demand, so I'd say, it's probably 2 to 3 years, but it really depends on what the customer adoption rate is. I'm confident of a couple of hundred jobs when the customer adoption is high, when we're doing several launches a year. I think we'll probably do as many Falcon Heavy launches as we do Falcon 9 launches. Our rough ballpark estimate is something on the order of 20 launches per year of which roughly half are Falcon Heavy, roughly half are Falcon 9 and of those, probably 60%, 70%, are [inaudible].
I think there's a lot of wishful thinking on the part of our competitors that our prices must be higher, but they are not. In fact, "I think that we're unique in the launch business of publishing our prices on our website. Whereas other launch providers sort of treat it like a rug bazaar - they'll charge you what they think you can afford. We believe in every day low prices, you know, and we've stuck to our guns on that." The Falcon 9 costs $50 million, and it's been that way for a while, and the Falcon Heavy is, on average, about $100 million, so we're very very confident of being able to maintain those prices, and I say let history be the judge. Here I am saying it, we'll see if that remains true, but you have it on camera.
If you had a small enough spacecraft, you could conceivably do it with one Falcon Heavy. It kinda depends on how big of a spacecraft and how many people you want to send, but I think you could slim it down to just do it on one Falcon Heavy.
I'm sure you could do it with two Falcon Heavy launches. If your spacecraft had a little bit of propellant on-board, presumably it would because it has to get back from the asteroid too, then I think you could do it with two Falcon Heavy launches.
I think we've thought a lot about going public but before we do so we want to make sure that we have a very predictable revenue stream because the markets don't like surprises, but I think that there's a decent chance we'll look at going public towards the end of next year. Not saying we will, but it's a possibility. It's possible that we could see acquisition interest, but I have no interest in selling and I am the controlling shareholder in the company. We've had some inquiries, but then I'm pretty clear with them that I would not give up a controlling stake in the company because SpaceX has some philosophical goals, or philanthropic goals, which may not be coincidental with the goals of a large government contractor.
I think end of next year meaning November, December, is when we expect to have Falcon Heavy at the launch pad at Vandenburg. The launch itself is a little more difficult to predict, because we have to go through final regulatory approvals, there could be things that we have to debug about the rocket and the launch site interaction, so I think, most likely what you'll see is a rocket at the pad towards the end of next year and a launch sometime in 2013.
I don't want to speak for specific customers, but I can say that there is strong interest from both the US government and large commercial operators in Falcon Heavy and that we are at an advanced stage of discussions with both, and part of what's needed to get them to sign up to a launch is to not be the first. It's always possible that a customer may jump in at the last minute and say, okay, they'll do it, but it's a lot easier to get deals done if customers know that they don't have to be the first flight. It's a bit of a, I guess, a slight risk on our part to be doing the first launch on our own funds, and of course, it does cost us some money, but it's an important thing to do in order to get customers to sign up. We had to do something similar with Falcon 9.
Ramping up production is our number one focus. That's what I have the whole company focused on. We're bringing in people both from the rocket industry, as well as from other industries, like automotive and high volume aircraft production. We'll be making more rocket engines than any company - actually, more than any country, I think - has every made. At 400 booster engines per year, I guess, at 500 booster engines per year it is more than the rest of the world's production combined. So that's pretty serious scale in the rocket business. In terms of the number of cores, we're talking about 40 cores. So it's very high volume but that's what's needed in order to do 10 Falcon 9s and 10 Falcon Heavys in a given year. As it is, if you look at our launch manifest, just based on existing contracts that we have, if you go out 3 or 4 years, we already have on the order of 10 launches booked of Falcon 9 and we've only done two Falcon 9 launches, and we're only just putting a stake in the ground with Falcon Heavy. "Twenty launches a year, is not a crazy number at all. We expect that to occur without any miracles." So we must make sure that we are building our production capability and our launch capability to meet that demand.
Right now our engine production rate is around 50 to 60 per year. That's what we're doing with the Merlin 1C. Merlin 1D, in addition to being a thrust upgrade, and some performance upgrade, is really a design for manufacturability as well. It's helpful that I have experience from the automotive world as well because, in automotive, 400 engines per year is nothing. There are a lot of techniques which the car industry has developed to be able to do high volume production but also be very reliable and consistent in doing so. I'm very confident that with the Merlin 1D design we'll be able to build 400 engines per year or frankly even 600 or 700 engines per year if we need to, and then the same with the cores. So we are making a significant investment in tooling and production process efficiency, honing our software systems within the company that manage the procurement, assembly, and launch, trying to automate as much as possible.
None-the-less, we are expecting to hire a lot more people and last year we grew quite dramatically - over 50% employment count growth last year - we went from 800 to 1200 in 2010. This year, I think we'll probably grow 15 to 20% and I am intentionally slowing growth down a little bit just because I want to make sure we're building the company on the right foundation, and then next year I expect the growth rate to continue to increase up to the 30 to 40% level in personnel growth.
We actually have been steadily acquiring the buildings around us in California. So we're sort of growing like the Borg. Actually, almost all the buildings around us have been acquired and that's increased our capacity in California by about 50% in terms of real estate, but I think we'll actually do a lot more with the existing physical locations we have. Actually, I really like density. I like a beehive of activity and people fairly close together. I think it creates a much better esprit de corps. You may have seen the announcement in Texas that we've more than doubled the size of our rocket development facility in Texas which is where we do development and acceptance testing of the rocket engines and stages and that's in anticipation of a lot more growth. So we're now at over 600 acres in Texas. We're building up a launch site at Vandenburg and we'll be enhancing our launch site at the cape. So it's a lot of growth across the board.
Good question. I think we'll need to launch, maybe, on the order of four per year to maintain those cost numbers, but I'm very confident that we'll be able to do that. That is not, I think, a tall order, and I think it's going to be a lot closer to 10 than 4. Also, because of the commonality between Falcon 9 and Falcon Heavy we're able to spread the overhead across both vehicles. Because really, Falcon Heavy is essentially the upgraded Falcon 9 with two additional first stages as side boosters. So it's able to use the same tooling, be made in the same line, and I think therefore significantly improves the probability of being able to hold to our cost numbers on Falcon Heavy. You're hearing it from me directly, you know, it's being recorded that we will stick to those prices, and not go above them, except for, you know, inflation and stuff like that. So, in current year dollars, we'll stick to what we have said.
The first mission is really a demonstration flight. It's there to prove that Falcon Heavy will work. That it will deliver the payload that we say it can, and we don't have a primary customer for it, but we are likely to have several smaller secondary satellites on-board that will do a variety of things, and if we get lucky, maybe there will be a big satellite at the last minute that wants to buy the flight at a reduced price.
"Dragon is capable of reentering from even Mars velocities including lunar velocities, etc. It's a very capable vehicle and is not limited to simply low Earth orbit operations." It's certainly possible to do a lunar fly-by mission with Falcon Heavy and Dragon. Where you sort of send a Dragon spacecraft on a loop around the back side of the Moon. In order to land on the Moon, there would need to be a propulsive landing system developed which we do not currently have planned. Certainly it is something we could potentially do, but there's no question that with Falcon Heavy and Dragon you could do a really cool mission which would be a lunar flyby, so you could go past the back of the Moon, you could even go a little further than they went in Apollo. That'd be kinda cool I think.
Well, first of all, in 2002 we didn't even have any pricing because I only started the company in, basically, July of 2002. We didn't even know what rocket we were making in 2002. So it's not possible to have doubled from a question mark. But I think if you look at the pricing for Falcon 9, ever since we rolled out the final specifications for Falcon 9, we've kept our pricing consistent at around the $50 million level. "I think we've been very solid in keeping our prices steady and we do not expect to make price increases in the future except for inflation related adjustments." In fact, over time we really want to reduce the cost per pound to orbit because that is the fundamental gating factor that prevents humanity from becoming a truly spacefaring civilization. It has just been far too expensive to do space travel in the past and in order for the country and for humanity to have an exciting future in space, it is critical that we are constantly improving the cost per pound to orbit and with Falcon Heavy we're demonstrating that we are. Falcon Heavy is a significant improvement over Falcon 9 in the cost per pound to orbit, and it's right around the, not so mythical anymore, $1000 per pound capability, and as we improve the performance of Falcon Heavy over time we want to get it below $1000.
We have an idea for a super heavy lift capability that would be sorta on the order of 150 metric tons to orbit, about three times the capability of Falcon Heavy and that's something that we're working. That's 50% bigger than a Saturn V. That's something that we're iterating with NASA on right now as part of - NASA issued an RFP for design ideas on a super heavy. We're one of the companies that NASA awarded. It's a small contract, a few hundred thousand dollars, but we're exploring with NASA how to do a 150 metric ton to orbit capability but complete that development rapidly and with an end result that is well under $1000 per pound to orbit.
We're already slated to replace the shuttle as far as cargo delivery capability to the station, which is the main functionality of the shuttle. Most of what the shuttle does is carry cargo to and from the space station. It does carry astronauts as well, and if things go as we hope, [inaudible] replace both the cargo and astronaut transport capabilities of the space shuttle. So we do expect that will occur. Now that's slated to occur with Falcon 9 and Dragon, Falcon Heavy has potential to do a lot more than that.
Texas is where we do all of our engine development and stage testing. As I mentioned a moment ago, we've more than doubled the size of our property in Texas, now 600 acres. So we are expecting a significant workforce increase at our McGreggor test site. I expect it to more than double over the next few years.
Alright, thank you.
Thank you for having me, it's really an honor to speak here at The National Press Club.
I have an exciting announcement with respect to space and I think one which should be able to provide some inspiration and some belief that innovation is alive and well in America and going in really interesting directions. I'm going to get to that but I'm going to preface that with the logic why such a thing is important, because it may not be immediately obvious.
So first of all, going to back to why I am in space and electric cars and solar power and Internet and stuff, it really goes back to when I was in college and I was trying to think of what were the most important things that would affect the future of humanity. What could have a significant positive effect on the future of humanity, and the three things that I came up with were, the Internet, sustainable energy, both in production and consumption, and space exploration but specifically making life multi-planetary, and I didn't expect when I was in college to actually be involved in all three of those areas but as a result of some success in the Internet arena, that gave me the capital to get involved in very high capital endeavors like cars and rockets, which really are very high capital.
I'm mostly going to talk about space. So I want to explain why do I think space is really important, and what about space? Because I believe in building things up from a rational framework of logic and so you start with, sort of, how do you decide that anything is important? And I think the lens of history is a helpful guide here, in that things that may seem important in the moment but aren't that important in the grand scheme - over time, if you look at things over a broad span of time, things that are less important sort of fall away. If you look at things from the broadest possible span of time, as relates to life itself, the evolution of life has been - primitive life, I think, started around 3.5 to 3.8 billion years ago, and what are the important steps in the evolution of life? Obviously there was the advent of single celled life, there was differentiation into plants and animals, there was life going from the oceans to land, there was mammals, consciousness, and I would argue, also on that scale should fit, life becoming multi-planetary.
In fact, I think, it is consciousness which makes this the next step. You really need consciousness to design vehicles that can transport life over hundreds of millions of miles of irradiated space to an environment that they did not evolve to exist in. It would be very convenient, of course, if there was another planet just like Earth nearby, but that's unlikely and as it turns out, not the case. So there's no way for life to just, by dint of natural selection, just sort of get over to Mars and survive. So you need consciousness, but I think it is the next natural step. If one could make a reasonable argument that something is important enough to fit on the scale of evolution, then it's important, and maybe worth a bit of our resources.
One can also think of it from a standpoint of life insurance. There's some chance, either as a result of something humanity does, or as a result of something natural like a giant asteroid hitting us or something, that civilization - life as we know it - could be destroyed. There's clear evidence for life being destroyed, multiple times, in the fossil record. So, we don't need to guess that this is something that can occur, it already has occurred. The permian extinction being a particularly interesting one as I think that destroyed between 90 to 95% of all species on Earth, which doesn't tell the full story as most of the remaining species were fungi. "So, unless you're a mushroom, you're out of luck."
If we think it's worth buying life insurance on an individual level, then perhaps it's worth spending more than - spending something on life insurance for life as we know it, and arguably that expenditure should be greater than zero. Then we can just get to the question of what is an appropriate expenditure for life insurance, and if it's something like a quarter of a percent of the GDP that would be okay. I think most people would say, okay, that's not so bad. You want it to be some sort of number that is much less than what we spend on health care but more than what we spend on lipstick. Something like that, and "I like lipstick, it's not like I've got anything against it. Can't wait for that comment to go out there." So that's kinda the thing that I - I think it's important that we give a little bit of our mindset towards.
I think it's also one of the most inspiring and interesting things that we could try to do. It's one of the greatest adventures that humanity could ever embark upon. You know, life has to be about more than solving problems. If all that life is about is solving problems then why bother getting up in the morning? There have to be things that inspire you to be proud to be a member of humanity. The Apollo program is certainly an example of that. Only a handful of people went to the Moon, and yet, actually, we all went to the Moon. We went with them vicariously. We shared in that adventure. I don't think anyone would say that was a bad idea. That was great. You know, we need more of those things. Or, at least, we need some of those things. Even if someone is in a completely different industry and a completely different walk of life, it's still something that's going to make you feel good about the world, and that's the other reason why I think we should try to do these great things.
Then now, let's get to the question of, well, how do you do these things? How do you make life multi-planetary? What are the fundamental obstacles to that? Because it's all well and good if everyone agrees that that's worth doing, but if we can't do it, well, it doesn't matter. So, the pivotal breakthrough that's necessary, that some company has got to come up with, to make life multi-planetary is a fully and rapidly reusable orbit class rocket. This is a very difficult thing to do because we live on a planet where that is just barely possible. If gravity were a little lower it'd be easier, but if it was a little higher it would be impossible. Even for an expendable launch vehicle, where you don't have to have any recovery, after a lot of smart people have done their best to optimize the weight of the vehicle and efficiency of the engines and the guidance systems and everything, you get maybe 2 to 3% of your liftoff weight to orbit. That's not a lot of room for error. If your rocket ends up being just a little bit heavier, you get nothing to orbit, and this is why only a few countries have ever reached orbit.
Now you say, okay, let's make it reusable, which means you've got to strengthen stages, you've got to add a lot of weight, a lot of thermal protection, you've got to do a lot of things that add weight to that vehicle, and still have a useful payload to orbit. Of that meager 2 to 3%, maybe if you're really good you can get it to 4%, you've got to add all that's necessary to bring the rocket stages back to the launch pad and be able to refly them, and still have useful payload to orbit. It's a very difficult thing. This has been attempted many times in the past, and generally what's happened is when people concluded that success was not one of the possible outcomes, the project's been abandoned. Well, some government projects kept going, even when success was not one of the possible outcomes, unfortunately, but then eventually they get cancelled. So it's just a very tough engineering problem.
It wasn't something that I thought - I wasn't sure it could be solved for a while, but then, just relatively recently - in the last 12 months or so - I've come to the conclusion that it can be solved, and SpaceX is going to try to do it. Now, we could fail. I'm not saying we're certain of success here, but we're going to try to do it, and we have a design that, on paper, doing the calculations, do the simulations, it does work. Now, we have to make sure those simulations and reality agree, because generally when they don't, reality wins. That's yet to be determined, and the simulation that you may have seen in the lobby coming in, which will be posted to our website right around now, will show you a simulation of what we plan to do.
That simulation is mostly accurate but there are a few errors that were inaccurate. In some cases just to timing constraints we were unable to work with the simulation people to get it completely accurate, and in some cases we're keeping a few technical things under our hat, but it gives you a pretty good idea of what we intend to do. Which is to, basically, for the first stage, after stage separation, to turn the stage around, relight the engines, boost back to the launch page and land propulsively on landing legs, and then, with the upper stage, after dropping off the satellite, or Dragon spacecraft, then do a deorbit burn, reenter - you need quite a powerful heat shield - steer aerodynamically back to the launch pad - you don't actually need wings by the way, it's kind of a common misconception around, you just need some lift over drag number, or lift vector - and steer back to the launch pad, and then land propulsively with the upper stage, also with landing gear. So we'll see if this works, but it's going to be certainly an exciting journey and if it does work it'll be pretty huge.
If you look at, say, the cost of a Falcon 9 rocket. It's a pretty big rocket. It's about a million pounds of thrust. It is the lowest cost rocket in the world, and even so, it's about $50 to $60 million, but the cost of the fuel, and oxygen and so forth, is only about $200,000. So obviously, if we can reuse the rocket, say, 1000 times, then that would make the capital costs of the rocket per launch, only about $50,000. There'd be maintenance and other things that we'd factor in there, and fixed costs and some overhead allocation, and what not, but it would allow for about a 100 fold reduction in launch costs, and this is a pretty obvious thing if you think at it applied to any other mode of transport. You can imagine if planes were not reusable, very few people would fly. You know, a 747 is about $300 million. You'd need two of them for a round trip, and yet I don't think anyone here has paid half a billion dollars to fly, and the reason is because those planes can be used tens of thousands of times and so all you're really paying for is fuel, and pilot costs and incidentals. The capital cost is relatively small. That's why it's such a giant difference.
I thought of another way. I mentioned that we could probably afford a quarter of a percent of our GDP for making life multi-planetary, that's the cost if you have a fully reusable rocket. The cost if you don't have a fully reusable rocket would be 100% of the GDP, and that would mean no money for food, health care, or anything else. Obviously, that's impossible. So that's why, I think, a fully and rapidly reusable system is fundamentally required for life to become multi-planetary, for us to establish life on Mars - Mars is the only realistic option for another planet - Venus being too hot, Mercury being way too hot, Jupiter being a gas giant and the moons of Jupiter are a possibility but it's much further out and harder in a lot of different ways, and the Moon is sort of too small and resource poor to make life multi-planetary. Emphasis on the planetary, not just to have a little base. A little base is not that interesting, but a self-sustaining human civilization that's on multiple planets, where life could continue even in the event of a calamity on Earth, that is the real thing.
Yeah, so I think this is pretty exciting and I think everyone in America and arguably the rest of the world, should be pretty fired up about what we're doing and hopefully wish us well, and we'll do our best to succeed in this regard and it's definitely going to be an adventure. I'll say one final thing, which is, that sometimes people say, well, what is the business model for Mars and sometimes they think, well, can you mine Mars and bring things back and that is not a realistic business model for Mars because it's always going to be far cheaper to mine things on Earth than Mars, but I do think that there's a business model where if you can reduce the cost of a flight to Mars, or moving to Mars, to around the cost of a middle class house in California, which do seem to be rising over time, maybe not recently but certainly still pretty expensive. So maybe to around half a million dollars, then I think you'd have enough people who would buy a ticket and would move to Mars to be part of creating a new planet and be part of the founding team of a new civilization. You'd obviously have to have quite an appetite for risk and adventure but there's 7 billion people on Earth now. There will be probably 8 billion by the mid point of the century, so even if one in million people decided to do that, that's still 8,000 people, and I think maybe more than one in a million people would decide to do that. So that's what I think is perhaps the Mars business model, if you will, and then ultimately Mars can probably export intellectual property like software, inventions and things like that. If you can beam it back with photons, that's a better way to go.
Alright, so I'm happy to answer any questions.
In the near term, the technology will be applied to launching satellites and to resupplying the space station, taking cargo and crew up there. That's the near term thing and that's what SpaceX's current business is predicated on. We're doing okay in that regard. We've got about three billion dollars in revenue under contract. Yeah, it's okay. It's spread out over the next five years, so it's not all at once, unfortunately, and we do have to do lots of things to get that money, but that's not bad. We have been profitable for the last four years. Not hugely profitable but moderately profitable, and we expect to be the same this year, and I think that's somewhat necessarily. Obviously if the amount of money going out exceeds the amount of money coming in, then sooner or later we'll die. So we have to make sure that we have more money coming in than going out, but that seems to be going reasonably well.
If measured by launch contracts awarded, that is correct. The United States has been uncompetitive in the international launch market for a long term and Russia has actually been the leader in that regard, followed by Europe and then, to a lesser degree, India and China. Although China is growing rapidly. Except in the last few years, where the United States has done the best and that's due entirely to SpaceX.
As far as launch is concerned, I think it's fair to say that the United States has by far the most competitive launch capability with SpaceX. The only realistic competitor is China. I tell ya, it's not the most easiest thing, competing with national governments, which are heavily subsidized, and they have certainly set their sites on us, and have told us that. But that's okay, I think we'll win. With respect to China, we have a conscious strategy of filing the absolute minimum number of patents. We file very few patents on the rocket and we've very careful about cyber-security and we're very careful about physical security, because there's obviously history of absconding with intellectual property in China. The enforceability of patents against the Chinese government is zero. Contrast that to Tesla, where Tesla files a lot of patents because the competitors are commercial companies and there's enforceability. But not to worry about launch, we'll take care of that.
We do spend a fair bit on space, much more than any other country, from a government standpoint. I think we'll continue to be the biggest spender on space in the United States, but by the same token, I think the budgets in absolute terms will decrease, just because of overall compression on the federal budget. We have a huge budget crisis and largely have our head in the sand and are ignoring the reality that we're spending far more than we're bringing in. That chicken will come home to roost. I think we can expect massive compression of all budgets including space from a government standpoint, just because we simply won't have any other choice.
Actually our primary launch facility is Cape Canaveral and we're building a launch site at Vandenburg Airforce Base in California. We're not currently using the Marshall Islands launch site. We did use that initially but the logistics are just too difficult, getting out there. It's like Waterworld out there, it's miles from anywhere. It's convenient in some ways but then inconvenient from a logistics standpoint. So, our primary launch site is Cape Canaveral and then Vandenburg and we also plan on establishing a commercial launch site which would - because it only makes sense. Vandenburg and the Cape are actually air force bases and it makes sense to actually concentrate air force and NASA business at those two facilities and then concentrate commercial launch activity at a commercial launch site, just as occurs with aviation.
I should first of all say that SpaceX would not be where it is without the help of NASA, both historically the great things that NASA has done and currently with the business that NASA gives us, and the expert advice and everything, so I should make sure to strongly credit NASA in this arena in terms of how helpful they've been. We do have a bit of a challenge with the air force, and this is something where I'm surprised there is not more journalistic interest because the air force is currently proposing to extend the sole source monopoly of Boeing and Lockheed until 2018. The reasoning given for that is preservation of the industrial base. Although, oddly, for some reason we're not included in the industrial base, and this is doubly odd because the main rocket used by Boeing and Lockheed is the Atlas 5 which has a Russian main engine and a center airframe, the interstage, and the forward airframe, the faring, which are made in Switzerland. So which industrial base are we talking about preserving? The one in Russia? That doesn't make much sense.
"You know, we have 1% of the lobbying power of Boeing and Lockheed. If this decision is made as a function of lobbying power, we are screwed."
I wouldn't in any way consider this to be a diversion. This is a parallel effort and so it's not really impacting our sending of cargo to the space station, nor is it effecting our human spaceflight development activities that we're doing in partnership with NASA. Which is going really well. So think of this as a parallel thing. It doesn't really affect the ascent phase of the vehicle but we're really trying to have the descent phase not be: hits atmosphere and explodes. That's actually what happens to all rockets, otherwise.
With the Soyuz failure that occurred recently, it will actually likely result in a delay in our launch to the space station because it sort of pushes out the other missions and NASA rightly wants to have the appropriate level of astronaut - the right number of astronauts with the right training and everything - on board the space station when we arrive. So, it looks like things will be more like January for the launch to the space station, and that is contingent upon the Russians meeting the schedule that they've currently stated.
I think, despite the recent failure of the Soyuz, it is actually a good vehicle. It has a good track record. I think there may be some concerns going future long term with Russia in that a lot of their expert rocket engineers have retired, because it is much more compelling, financially, going into the oil and gas industry in Russia than it is to go into the rocket industry. So that expertise is tailing off and I think that may lead to decreased reliability for Russian rockets in the future. Hopefully it doesn't.
I think long term, like I said, I think long term China is the serious competitor. "If you look at Russian rocketry, since the fall of the Soviet Union, there's really been no significant developments. The technology has barely progressed." No new rockets have launched since the fall of the Soviet Union, so obviously what that means is that as soon as that technology level is succeeded then they're rendered redundant and they have no ability to compete, and I think that's what's likely to occur with the Russia launch industry. [How long do they have?] 5 to 10 years. [and then China moves in?] I'm quite confident we can take on China. Maybe I'm overconfident but I'd rather bet on us than China. Could be famous last words.
I think here it's important to clarify what can "the Falcon 9/Dragon system that we're launching today, what can it do? If the degree of safety required was equivalent to that of the shuttle, we could actually launch astronauts on the next flight." On the one that will likely go up in January. The system is fully capable of carrying biological cargo. You know, which is people. However, what it doesn't have is a launch escape system. The shuttle also does not have a launch escape system. Both NASA and we agree that a launch escape system is a wise move. It will take us about two years, maybe at the outside, three, to develop and qualify the launch escape system and the way we're doing the launch escape system is, I think, a significant innovation beyond what's done in the past where escape thrusters are bolted into the sidewall of the spacecraft, so you can actually use those same thrusters for propulsive landing. Which is cool, and we're actually talking with NASA about potentially doing missions to Mars and other places using Dragon as a general science delivery platform. To various places in the solar system. So that's an important distinction. We could launch astronauts next flight, if requirements were the same as the shuttle, but if we want to add a launch escape system, it's two to three years.
Relatively speaking, we're a pretty open and transparent company. There are some restrictions here, which are ITAR restrictions, and they're not restrictions that we have any choice over, because advanced rocket technology is considered protected technology. We can't just publish to the general public a detailed analysis of failure investigations that contain secrets on how to make rockets. That's actually a violation of the law. All that information is available to NASA and to the FAA, so for missions that we do for NASA, they have a detailed oversight role, and then the FAA as well has an oversight role. If you're comfortable flying commercial aircraft then you should be pretty comfortable with what we're doing in commercial rocketry.
Oh sure. That certainly occurs when it appears like there's been a violation of the rules or something like that, but as long as things are within the rules - obviously there's fatal car accidents every day but you don't get a congressional hearing on it.
Certainly NASA is our largest customer and our most important customer, but if you look at our launch manifest we have over thirty Falcon 9 missions under contract, thirteen of those are with NASA, so effectively we've got about 40% or so of our business with the government. "Let's say you made pencils, well, about 40% of your business would be with the government. That's not an unreasonable number."
If you look at the amount of money that is allocated to commercial space, relative to the overall NASA budget, you'll see it's a pretty small number. Last fiscal year it was about $300 million but that was split over four companies. We got about $75 million or something like that. That's about a half of a percent of the NASA budget. "It's important to bear in mind that we'd love to hire a lot more people than we currently hire but we also can't run out of money and die." So we can only hire a few people. In terms of what characteristics we look for, we're generally quite engineering centric so we're big fans of what have people done from a hard core engineering standpoint. What tough engineering problems have they solved. How they solved them. We're less interested if it's been more of a paper oriented role that they've had because we try to minimize that at SpaceX. [Are you more demanding than NASA?] Well, that's a tough question to answer. I think we're probably more demanding. NASA's a large organization. I think the level of demand on people based in different parts of NASA varies significantly. I'm sure that there's parts of NASA which are just as demanding, maybe more demanding than SpaceX, but SpaceX is an extremely demanding organization and we expect people to work super hard and be very good at their job.
"The climate debate is an interesting one. If you ask any scientist, are you sure that human activity is causing global warming, any scientist should say no. Because you can not be sure. On the other hand, if you said, do you think we should put an arbitrary number of trillions of tons of CO2 into the atmosphere and just keep doing it until something bad happens, they'll probably say no too." We, essentially, are running an experiment, and that experiment is to test the carbon capacity of the oceans and the atmosphere. Now, that experiment may turn out to be fine. It may also turn out to be really bad. I just don't understand why we would run that experiment. Particularly when you consider that, at some point, we have to get to something that is sustainable. We have to have sustainable production of energy, and consumption of energy because, tautologically, if it is unsustainable you will run out of it. You can certainly say, well, let's say hypothetically, CO2 was good for the environment, and let's say hypothetically, the United States possessed all the oil in the world. Well, you'd still have to get off oil, because it's a finite resource and as you start to run out of it, the scarcity would drive the cost up and cause economic collapse. So why not do it sooner? I'm not saying it has to be a radical or an immediate change, or that people need to inject a great deal of misery into their lives to avoid CO2, but we should lean in that direction. We should lean in the direction of supporting technologies that are sustainable and lean slightly against technologies that are unsustainable. That just seems pretty sensible. Even if environment isn't a factor. In fact, my interest in electric vehicles predates the current climate issue. I mean, I was interested in electric vehicles 20 years ago when nobody was really talking about global warming, because I just thought it was the obvious means of transport, but I do think the climate thing does add urgency to things and I do think we will see quite a significant increase in the cost of oil. Just from a demographic standpoint you've got China, India, and a few other countries that represent almost half the world's population and have very few cars on the road but are rapidly adding cars to the road. So you can expect a doubling of demand and I think it's going to be difficult to achieve a doubling of supply.
In the case of Solyndra, it's obviously become somewhat of a political football here. The DOE programs necessarily are portfolio programs where some number of the things that are funded there are going to fail. That should be assumed. You should not assume a 100% success. In the case of Solyndra, people forget that private investors lost twice as much as the government did, and there were some really first rate venture capitalists in Solyndra. It's not as though these were suckers. If you've got first rate venture capitalists who have lost twice as much money as the federal government, you have to say, okay, it was a bet, the bet didn't work, but that doesn't mean something really terrible happened. The most you could say is that Solyndra executives were too optimistic. They presented a better face to the situation than should have been presented in the final few months, but then, if they didn't do that, it would have become a self-fulfilling prophecy of - as soon as a CEO says I'm not sure if we'll survive, you're dead. You know, I think people are making too much of this Solyndra thing. Do I think there are parallels with Tesla? I mean, we got a loan from the DOE, from a different program I should point out, but in our case, we have significant capital reserves. We have more money at Tesla than we need to complete the program in question and we don't face the same issue that Solyndra faced which is extreme competition from China on a commodity product that drove the cost per watt of solar panels from $4/watt down to $1. That's the fundamental reason Solyndra went down. Solyndra would have been okay at $2/watt but not $1, and that's it. There's another thing which is not getting enough press, which is, "how much money do you think the Chinese government has put into solar? Estimates are about $40 billion. Okay? So, we've got our team operating on a pittance, and we've got China operating on $40 billion, and our team lost. That should be no surprise."
There's probably a little bit of tarnish, but it's unwarranted tarnish. The scenario that occurred with the cost per watt of solar was something that I expected would occur. "So if someone had asked me, do you think Solyndra is a good investment, I would have said no, you're going to get your ass kicked." Solar City works on an overall system, where they do everything except the panel, and they own the end customer relationship. They're kind of like Dell or Apple. You know, Apple don't make the CPU or the memory or the hard drives but they design the overall system and they provide it to customers through the sales and marketing service and that's what Solar City is. "Solar City is doing super well. They're growing at 50% to 100% a year with positive cash flow, which is pretty incredible. I just show up at the board meetings to hear the good news. It's really great." All credit to those guys. For them, the more rapacious the competition on solar panels, the better.
Thanks.
There's lot of great ideas that people come up with all the time. I don't necessarily wish I'd had them myself, but certainly what Larry and Sergey came up with with Google was really smart, you know, with the backwards links to pages, obviously what Facebook has done, Twitter. I mean, they're great examples of the Internet. I-Pad, obviously, i-Phone. Apple, Google, Facebook, I mean, these are examples where you're sort of like, who's their competition? I'm not even sure.
The United States - it's sort of like that comment about democracy - it's a bad system but it's the least bad. "Well, the United States is the least bad at encouraging innovation." Silicon Valley actually, I'd say, is particular good at encouraging innovation. Silicon Valley is just orders of magnitude better than any place in the world for creating new companies and fostering innovation. It's quite remarkable. I don't think we necessarily need to worry about some other country out there out-innovating us. I don't think people realize that almost all innovation in the world comes from America. A ridiculous percentage. But that doesn't mean it couldn't be better. I think we need to be concerned about excess regulation, a tax structure that potentially doesn't promote innovation. The thing to remember is that when companies are little they're like tadpoles. I mean, they just die very easily. You need to have an environment that tries to protect little companies and help them get bigger. Silicon Valley does that very well and America, in general, does that very well a lot of the time compared to other countries. Most other countries tend to foster and protect the big companies. Big companies don't need protection.
We certainly look forward to taking people to space, certainly.
In some respects, yes.
I think we're around 16 or 17 hundred.
What the Roadster's greatest value is, really, is breaking the misconceptions around electric cars. Showing that you can have a fast, cool, beautiful electric car that goes long distances. Almost 250 miles [without a charge]. That's longer than any electric car in history and, in fact, Roadster's set many world records in terms of its range. In fact, we've had one customer take it over 300 miles on a trip. There's actually two customers. One was a rally in Australia, which is technically 500 km, and it's the first time that an electric car has finished that rally without recharging, and another one was in Europe.
I certainly know several of them, but Larry Page and Sergey Brin were both early customers and, in fact, investors in Tesla.
The biggest impact of the Roadster is in changing the perception of electric cars and showing that you can do amazing things with an electric car that, in fact, are better than gasoline cars in a lot of respects. The Roadster has better acceleration than almost any gasoline sports car. The result of the Roadster was, in fact, the Volt. Bob Lutz at General Motors credits Tesla with the inspiration for the Volt.
We do share our technology, ironically not with General Motors - not that we weren't willing to do so, but General Motors wanted to go their own way. But we do provide our power train technology to Daimler, for Mercedes and Smart, and to Toyota, and so we have the electrical Mercedes A-class on-road now in Europe and the electric Smart now in the US and Europe and next year there will be the electric turbo Rav-4.
Next year we'll have the Model-S which is about half the price of the Roadster which about $50,000 and that's a full size sedan about the size of a 5-series BMW but actually far more capable than other premium sedans. I think we will have a version that accelerates comparable to the Roadster. Our goal with the Model-S is to have a performance version Model-S that is the fastest sedan on the road.
"It's one hell of a golf cart. You go on the golf course with this puppy, you're really going to have a good time between the holes."
They are, and that's exactly what we're trying to effect, is to show people - hey, you can have a - hell, a better experience with an electric car than you can with a gasoline car.
It actually is. Even if you draw electricity from coal or natural gas, or even directly from oil, because stationary power plants are so much more efficient than small gasoline engines in cars, an electric car ends up getting more range for a given amount of say, coal or oil that's burned than a gasoline gets. So, in other words, the CO2 per mile is actually less for an electric car even if it's coming from a high CO2 source like coal. Now, of course, long term we have to find sustainable power generation and sustainable transportation but both sides of the equation need to be solved and even if electric cars weren't there, we still need to get sustainable power generation. The great thing about electric cars is you can generate the electricity from a wide range of renewable sources like hydro, geothermal, wind, solar and nuclear where it's save to do so.
Now, if that were true, it would be a valid criticism. First, I should say, the loan the Tesla received did not come from stimulus funds at all. In fact, the loan program under which Tesla competed for loans was actually created and signed into law by George Bush. It is tax payer dollars, but it's very very different from the stimulus funds or the bailouts or anything. In fact, one of the requirements under the loans program, which is called the Advanced Technology Vehicle Manufacturing program, that you had to demonstrate viability as a company independent of the loan. This is why General Motors and Chrysler didn't receive any funding under this program, because it's difficult to make that argument while you're in bankruptcy.
No, but we could demonstrate viability with the Roadster. We did not need the loan. The value of the loan was really to accelerate the progress at Tesla, not to keep Tesla alive. Although unfortunately, the timing was unfortunate. So it's fair that people would have a misunderstanding about this because the announcement of the loan that Tesla got - and also, Nissan and Ford got loans that were much larger than what Tesla got - at the same time, but these loans were announced right around the time that there were bailouts taking place and there was a stimulus and so people naturally confused the two which is unfortunate but they're really quite different.
That is also an incorrect perception. The loan that we received was specifically for the Model-S program which is much higher volume, lower cost - about $50,000. We expect to go into production in the middle of next year. 20,000 units per year. A few other things which are noteworthy about the ATVM loan, of course, we pay interest, it's a reduced interest, but we still pay interest and if we don't pay the loan off early, there are actually stock warrants that the government gets in Tesla. So, it's a pretty good deal.
We exchanged some emails.
Well, I guess they're competition in a sense, but pretty indirectly. It's such a huge market. We don't see people necessarily choosing to buy a Volt or a Leaf rather than a Tesla, so I guess technically competition but not in a significant way. The overarching goal of Tesla is to get the industry to move towards electrification - competition or not - and whether we do that with our own cars, with cars that we help other people make, as we're doing with Daimler, we're producing battery packs and chargers for the Mercedes A-class, for the electric Smart car or with Toyota, we're producing the entire electric power train for the electric Rav-4, we're just trying to move the industry towards electrification faster than it might otherwise go and we're certainly quite pleased whenever there's any announcement about another manufacturer producing electric cars.
I certainly believe that the future is pure electric cars, not hybrids. I think hybrids are an interim step. They're sort of like an amphibian. You know, when life was going from the oceans to land, probably a lot of amphibians, but that's not the end solution. I think you want to go all electric because that is the truly sustainable path and I think if you split the baby and you have a car that is trying to be a good gasoline car and a good electric car, you end up being not as compelling as either a pure gasoline car or pure electric.
With Model-S I think we've got a great solution in that regard because you've got a range of up to 300 miles. You can actually charge the car in 45 minutes. The charger is built into the car, and the third thing is you can actually swap out the battery pack faster than you can fill a gas tank. So you can actually swap the battery pack out in under a minute.
We want to be like the shipping company that brought people from Europe to America. Or like the Union Pacific railroad or something like that. Our goal is to facilitate the transfer of people and cargo to other planets, and then it's going to be up to the people if they want to go.
He did interview me, I guess, I met with Robert Downey Jr just before they were filming Ironman 1. Gave him a tour of the rocket factory. Showed him an electric car and everything. We talked about some of the possible scientific explanations for the powers that Ironman has in his suit. Like maybe you could harness the power of dark energy or something. I thought it was cool, but I think there's also some important differences. I've got five kids and Ironman is sort of a swinging bachelor. I spend my weekends going to Disney Land and I don't see Tony Stark doing that.
They're rerunning that? I don't believe it. That sucks. That's horrendous. I don't know, I wish it wasn't. I think my ex-wife is sort of - she's a prolific blogger and writer and, you know, I think she likes to talk about these things and I don't. I decline to participate in divorce wars, as enticing as that sounds.
Alright thanks.
I wanted to hear from others that had a strong philanthropic initiative. I wanted to hear what they were doing. What was successful, what was unsuccessful. So as to better inform things that I do.
There was, and as the saying goes, if you try a bunch of things you often learn more from failure than from success.
In my case, the three areas that I'm focused on are space exploration, solar energy and electric cars. I actually did create those business because I felt those were important needs that had to be solved. They were certainly not picked because I thought they were the highest return on investment. I think, intuitively that most people would agree with that. Having heard of Solyndra and other issues in solar power, that wouldn't be high on the list. Nor would car companies, given that the next youngest car company in America is 90 years old. Also, rockets are not an area where there's been a lot of commercial/private success. Very fortunately, all three seem to be doing well. I think I could have made a lot more money from, say, selling another Internet company.
Well, I think part of it is that people have started becoming wealthy at an early age, and so there's been more of an opportunity to give away wealth if you've obtained it earlier in life.
I think it is for the Internet. It's a lot harder to build wealth in other businesses where there's large physical objects that need to be made. For example, with SpaceX we've got to make these giant rockets, it's taken 10 years to get SpaceX to this point where it's of a value perhaps comparable to what we sold Paypal to eBay for after three and a half years.
I am, actually. I think that there's a lot of opportunity in solar. There have been, besides Solyndra, a lot of solar companies that have either seen a collapse in their market value or have died, but I think it is a very important area and it's very important that there be successes in that arena, because we have to have sustainable energy. That's why I've put my capital to work in that regard, even though it's not probably the place where it could earn the highest return.
I think things are going reasonably well. We're going to be in production with our sedan next month. So we'll start our first customer deliveries next month. With next technologies there does seem to be this ebb and flow of excitement about it. At first it'll seem it's not working and then it will seem like it is. So it's sort of like an upwards sloping sine wave. So long as there are companies that are driving the technology forward, as Tesla is, that sine wave will continue to be upward sloping. I think, in the next several years, we're actually going to see a huge increase in the number of electric cars. "Tesla, in the second half of this year, will produce more electric cars than it has produced in its entire lifetime to date. I feel very confident predicting that, within 20 years, the majority of new cars produced will be fully electric, and it may be closer to 10 years than 20."
Essentially, we're going to put a lot of satellites into orbit. For a wide range of customers. We'll be doing a lot of cargo resupply missions to the space station. In about three years we'll be launching astronauts. Hopefully, three or four years, but hopefully closer to three. We'll be launching our Falcon Heavy which will be the most powerful rocket in the world by a factor of two. In the longer term, perhaps in the 10 to 15 year time frame, I'm hopeful that we'll have a craft that can take people to Mars because the ultimate goal of SpaceX is to develop the technologies that can take humanity to Mars.
I'd like to go to Mars, absolutely. "I think it would be great to be born on Earth and to die on Mars. Just hopefully not at the point of impact."
Thanks for having me.
Thank you very much for the award.
It's great to be before so many people who believe strongly in the establishment of life on Mars.
I think my reason for being interested in Mars and doing SpaceX are really.. they come down to basically just two things. One, which the prior speaker was articulating is, the defensive reason - in that if we are on more than one planet, the probable lifespan of human civilization and the life of consciousness as we know it, is going to be far greater than if we are on one planet. So there's that defensive reason, that life insurance reason, and I think that's obviously a very important thing. Earth's been around for 4 billion years and civilization about 10 thousand years and it's only now that we have this little - this little window has just cracked open where it's possible for life to extend beyond Earth and so - I think it's sort of sensible to take advantage of that window while it's open. Hopefully it will be open for a long time but it could be open for a short time, and so we should take action. And that's sort of the defensive reason.
It's not actually the reason that gets me most fired up about Mars.. The thing that actually gets me the most excited about it is that I just think it's the grandest adventure I could possibly imagine. It's the most exciting thing - I couldn't think of anything more exciting, more fun, more inspiring for the future than to have a base on Mars and it would be incredibly difficult and probably lots of people will die and terrible and great things will happen along the way, just as happened in the formation of the United States. But it will be one of those things that is incredibly inspiring and we must have inspiring things in the world. Life cannot just be about solving this problem or that problem, there must be things that when you wake up in the morning you're glad to be alive, and that I think is, to me, the most important reason we should pursue the establishment of life on Mars.
Now, of course, I'm preaching to the converted here. I expect to hear few objections from this audience. So, I think really, what matters is find a way to do it. In fact, I'll give you a little bit of background of my genesis of how I got into space. Sort of started when I was college, there were three areas that I thought would most effect the future of humanity and space exploration - extension of life beyond Earth was one of those things. I didn't ever expect to be involved in it, because I thought it was the province of governments and besides which, it sort of seemed at least 21, 22 years ago that it was likely to occur because we went to the Moon and then of course there would be people going to Mars and then we'd be establishing a base on the Moon and eventually a base on Mars and that sort of seemed like the natural progression of things. And then amazingly it didn't happen. I kept thinking, well, it's about to happen. And again, it just didn't happen. There's a Monty Python skit about this. Suddenly, nothing happened! Before you know it, nothing happened.
In fact, in approximately 2001 I was with a good friend of mine from college, my college housemate actually, in New York and he asked me what I was going to do after Paypal and I said well, I've always been interested in space but of course there's nothing that I as an individual could do about that, but the question got me curious as to sort-of, to find out what, okay when are we sending people to Mars? So, after I got back to my hotel room I went to the NASA website to see, sort-of, to look up the schedule. Because, of course, there had to be a schedule. And I couldn't find it. I thought the problem was me. Because, of course, it must be here somewhere on this website, but just well hidden. And it turned out it wasn't on the website at all. Which was shocking.
So then I thought, well, perhaps the reason is that the American people have lost the will to explore or if we just got people more excited or interested in the subject then they'd be inclined to want to do it. This turned out to be a false premise, by the way, but that was my initial thought. It was a mistake. At first I thought that if we can do a small philanthropic mission to Mars - something that would get the public excited, then that would result in a bigger budget for NASA and then we could do exciting things and get the ball rolling again. And that's about the time I started talking to Robert Zubrin and a few other people and - so initially, the thought was to send a small greenhouse to the surface of Mars with seeds in dehydrated nutrient gel. They'd be hydrated upon landing and then you'd have this little greenhouse on the surface of Mars and the public tends to be, as they should, interested in things that are precedent and superlatives. So this would be the furthest that life has ever traveled, the first life on Mars and then you'd have this great money shot of green plants on a red background. So that would be - I thought that could get people pretty excited, and so, I started investigating what they would take, and I was able to get the cost of the spacecraft down to low single-digit millions and cost of communications down and I was able to get everything compressed, except for the cost of the rocket.
The US rockets were way too expensive. Something like a Delta II would have cost $60 million and I figured we needed to do two parallel missions, two identical missions, in case there was an equipment failure because then it could be counterproductive - like, look at that fool, he did that Mars mission and it didn't work, now we definitely can't do Mars. So I figured we had to have redundant missions, and I just didn't actually have enough money from the sale of Paypal, from my stake in the sale of Paypal, to actually do that. I just didn't have enough money. So I went to Russia in late 2001, early 2002 to try to buy ICBMs. And that's as crazy as it sounds. So I guess, about 30 years old, Internet guy arrives in Moscow, wants to buy the biggest ICBM in the Russian rocket fleet. I said, I don't need the nuke. Just need the rocket. And then, they thought I was crazy, but then they also thought, well, he's got money so that's - so I was actually able to negotiate a deal to buy a couple of Dneprs and - now, at the end of all that I decided not to conclude the deal. So, negotiated a price but decided not to take the deal, because after my third trip to Russia that's about the time that I realized that my original premise was wrong.
That it is in fact - we do not lack the will. Particularly in the United States, perhaps the world as a whole, but particularly not the United States does not lack the will to explore. Not in the least. In fact, the United States is a distillation of the human spirit of exploration. Almost everyone came here from somewhere else. You couldn't ask for a group of people that are more interested in exploring the frontier. But - people don't think there is any way to do it, if they don't think there's a means, then it's somewhat irrelevant. You know, you're not going to bash your head against a brick wall if you're confident that your head won't break before the wall will break. It's just not going to happen.
So that's when I decided to start the rocket company, because it was clear that we had not made advancements in rocket technology and that was the reason that we hadn't made progress. The rocket technology was actually going worse. It was costing more and more to send things to space than in the past. So we had a negative technology curve. Which is counter intuitive because we're so used to things in the consumer electronics realm, and in everyday life, improving. You know, we sort-of take it for granted, like "it's as though things automatically improve. They do not automatically improve!" They only improve with lots of effort and resources. You saw the picture of pyramids there, Egyptian civilization got to the point where it could create things like the great pyramid of Cheops but then lost that ability and never got it back. Or Roman civilization went through a deep dark period. It's not a given that things improve. There has to be a forcing function. People have to do it.
So anyway, I started SpaceX. I had many people try to convince me not to start the company. Really tried their best. Many of my closest friends if there was anything they could have done to stop me from starting a rocket company, they would have done it. One good friend of mine compiled footage of rocket failures, and forced me to watch it. I said I've seen them all. It was certainly - but I think that they perhaps misunderstood the premise because when I started SpaceX it was not with the expectation of success. I thought that the most likely outcome was failure. But given that the thing I was going to do previously which was the Mars greenhouse mission, I'd expected that would have 100% likelihood of losing all the money associated with it. So if a rocket company has less than 100% chance of losing all the money associated with it then it was therefore quite a bit less risky than the thing I'd been doing before.
Fortunately, things went reasonably well with SpaceX - not at the beginning. The first three launched of the Falcon 1 rocket that we did failed. And, as Bob Zubrin was saying, it's not a good day when the rocket fails. The first rocket failed only - it impacted only 60 seconds after liftoff. Not far from the launch site. Me and the rest of the team spent all of that day picking up pieces of the rocket. Which is a very sad thing. But we picked them up to see if it could help figure out what went wrong. Fortunately, the fourth launch we were able to reach orbit. That's a good thing - it was a good thing we were able to do that because I had no more money left.
Talulah, my wife there, she's witness to the third and then the fourth launch. Yeah, I was so stressed out at the fourth launch, I didn't even actually feel elation. I just felt relief. So, it was a very very close call, but fortunately the fourth launch worked and since then all of the launches have worked. I hope they continue to work, and SpaceX has gotten a lot stronger and we've actually been slightly profitable for the last 4 years approximately, and should be again this year, and the rockets now are much bigger. We've got Falcon 9 which is about a million pound thrust rocket. And we've got an upgraded version of Falcon 9 which is going to launch next year, which will be almost 1.5 million pounds of thrust. And then, the Falcon Heavy which will be over 4 million pounds of thrust, which is about 60% that of a Saturn V. In fact, with two Falcon Heavy launches you could actually send people back to the surface of the Moon. Most people probably aren't quite away of the scale of the rocket that we're building. Falcon Heavy should launch, probably around the end of next year or certainly by early 2014 by the latest. That I think will represent a significant improvement in rocket technology, and then, very importantly, we're also working on re-usability.
If you really boil it down to the crux of why don't we have a base on Mars, as I mentioned, there's rocket technology but what really needs to be developed - the key invention that's necessary - is a rapidly and completely reusable rocket. This is a very difficult thing to do on Earth because Earth's gravity is quite high. It's right on the cusp of impossibility for such a thing for a chemical rocket. So if you take an expendable rocket, even after a lot of smart people are using advanced materials, and really approaching the limits of engine efficiency and everything, you'll typically get 2 to 3% of your liftoff mass to orbit. That's for an expendable rocket. Now, if you say okay, we want to make it reusable, we want to bring it back to the launch site, it's gotta survive the rigors of reentry, all the systems have got to be capable of surviving multiple firings and thermal fatigue and it's just really - you add a lot of mass when that happens. Previously, when people have tried to make a reusable system, they found that they would get some portion of the way and conclude that success was not one of the possible outcomes.
In government programs, of course, that program will still continue for quite some time. It's funny but true. The real trick then, is to say can you create a rocket that is efficient enough that, in an expendable form, you can push that, what would normally be 2 to 3% of mass to orbit, up to maybe 4% of mass to orbit and then if then you can get really good about the reusable elements, maybe that can only cost you 2 of those four points. So on net, you would still get 2%, roughly, of your liftoff mass to orbit. That's the thing that needs to happen. In order for that to happen, you have to really get straight A across the board in all elements of the rocket design. Every little tiny thing. The engine efficiency, thrust to weight, the engine, the tank mass, the pressurant mass, the secondary structure, the wiring, the weight of the computers, everything matters immensely. But if you do all those things right, then it is possible to make this work, and this is what has given me hope recently in the last few years. Because I wasn't sure whether it was possible, but in the last few years I've become convinced that it is possible. Of course, just because something is possible doesn't mean it will occur, but I think it can occur. Success being one of the possible outcomes is very important.
That's the breakthrough that SpaceX is really trying to achieve. The stuff we've done so far is good, I think it's - but it's evolutionary, it's not revolutionary, and we really need the revolutionary thing to work. So I think over the next few years we'll see if we're going to be able to do that rapid and reusability thing. But I am quite optimistic that this will occur. I don't want to leave any doubt, I'm quite optimistic that it will occur.
That's for Earth orbit, now to establish life on Mars, I think you really ultimately need to be able to carry millions of people there and millions of tons of cargo. You really need a fully reusable Mars transportation system, which is yet a more difficult step than creating a fully reusable Earth system, and that I was really worried would not be possible. But, last year, I became convinced that it actually is possible. Which made me very happy actually. In fact, I think Talulah was there when I was pacing around the bedroom late at night trying to see if this would work.
Yeah, so that's good news. Now, I could be deluded. But unless I'm deluded, I think we've got something in mind that would be a solution that would work. It really comes down to a cost. What cost does a trip to Mars have to be in order for it to be a self-sustaining reaction? I think you've got to roughly get to around half a million dollars. If people could pay half a million dollars to move to Mars, sell all their stuff on Earth, because you don't need it, then you could move to Mars, then I think that could work because that's basically the net worth of a roughly middle income earning person after about 25 years in the United States is roughly half a million dollars. In fact, it's kinda hard to buy a house in southern California for half a million dollars in a lot of neighborhoods. So I think at roughly that level is where it works. That's where we've got to get to, and my calculations show that it should be possible.
In fact, it is possible, according to me.. but there's a great deal of work that has to occur to make it a reality.
So that, I think, is a reason to feel good about the possibility of life on Mars. I think that's probably what I'd like to leave you with, and in the ensuing years we will reveal more and more about what we're going to do, and there will probably be some ups and downs along the way, but I can finally see a path to that objective.
Like I said, so long as I'm not delusion or haven't made some significant error then I think that will hopefully come as good news to people in this room.
Thank you.
I was born in South Africa. Lived there until I was 17 and travelled - moved by myself.. do you want to hear the full story?
I was born in Pretoria, South Africa. Lived in Johannesburg and Durban as well. I was able to travel to a few countries growing up. Within Africa and around the world. Went to the US when I was.. I don't know.. 10-ish or something like that.
I read a lot of comic books, and books. It always seemed like when there was cool technology or things happening, it was kinda always in the United States. My goal as a kid was to get into.. to get to America basically.
Well. I read every comic in the store. I liked obviously, Batman, Superman and stuff. The Green Lantern. Ironman. Better not say Ironman first, because then people will think... but I did think that was a pretty cool one. But I read everything. Dr Strange.. if there was a comic on the rack, I read it.
When I was about 10 years old I went into a store in South Africa and bought a Commodore VIC 20 and.. I guess maybe I was 9 years old.. I thought it was the most awesome thing I had ever seen. You could write computer programs and make games. I'd played Atari and other things, other game consoles, when I was maybe 6 or 7. So the idea of being able to create games, I thought it was very exciting. That was my first computer.. I think it had like 8k of memory.
I wouldn't say that I always knew I wanted to be an entrepreneur. I actually wasn't sure what I wanted to do growing up. I think at one point I thought inventing things or creating stuff would be a cool thing to do. But I wasn't really sure if that meant starting a company or whether that meant working for a company that made cool stuff. In fact, when I first came out to Silicon Valley, it was to do graduate studies at Stanford in applied physics and pure science. In '95 I kinda thought the Internet would be something that would change the world in a major way and I wanted to be a part of it. Actually, what I first started to do, was I tried to get a job at Netscape. I wouldn't actually try to start a company, I'd try to get a job at Netscape.
I didn't get any reply. I mean I had a physics and economics degree, or physics and business degree from Wharton, and I was doing grad studies applied physics and materials science.. I guess that.. I mean, I didn't have a computer science degree or several years working at a software company. For whatever reason, I didn't get a reply from Netscape and I actually tried hanging out in the lobby.. but I was too shy to talk to anyone. So I'm just like standing in the lobby.. it was pretty embarrassing. I was just standing there trying to see if there's someone I can talk to but I just couldn't.. I was too scared to talk to anyone. So I left.
I was just writing software that summer and it got to the start of the quarter at Stanford so I had to make a decision and I decided to go on deferment. I figured if I start a company and it doesn't work then I can always go back and graduate school. So I talked to the chairman of the department and he let me go on deferment and I said I'd probably be back in 6 months and he said he was probably never going to hear from me again and he was correct. I've never spoken to him since.
So I started a company with my brother and a friend of mine Greg Kouri and the three of us created Zip2 which.. the initial idea was to create software that would help bring the media companies online. So we helped, in a small way, bring companies like The New York Times, and so forth, online. There weren't always online, people don't realize that.
I started off being the CEO. I was CEO for probably the first year and then.. but after we got VC funding, the venture capitalists wanted to hire a professional CEO.
At the time I thought it was a good idea. Because I didn't really know what I was doing, and I figured they would hire someone who is really good and that person would increase the chances of the success of the company. So that seemed like a good thing and I could work on software and product direction and that's what I like doing. So that seemed like a great thing. I think in retrospect that wasn't the best thing. The person that was hired, in my opinion, was actually not that great. I think, quite frankly, the company succeeded in spite of that person, not because of them.
I read a lot of books and talked to lots of people. I didn't have any one person who was a mentor but I always looked for feedback from the people around me and feedback from the historical context, which is books basically.
I don't read many general business books. I like to read biographies or autobiographies. I think those are pretty helpful, and a lot are not really business. For example, I like Franklin's autobiography and recent written biography on Franklin is really good. You can see how he.. cause he was an entrepreneur.. he started from nothing.. like a runaway kid basically. Created his printing business, how he went about doing that, and over time he goes into science and politics. I would say certainly that he's one of the people I most admire. Franklin was pretty awesome, but I think it's also worth reading books on scientists and engineers. Tesla obviously.. I've contributed some funding to save the land [for the Telsa museum]. I like the way [The Oatmeal] put it: let's have a god damn Telsa museum. Awesome.
This kinda goes back to college where I was trying figure out what are the things that would most effect the future of humanity.. and the things that I thought would most effect humanity were: the Internet, sustainable energy - which is both production and consumption - and.. so, like, Solar City is production and Tesla is consumption in a sustainable way, and then also space exploration and specifically making life multiplanetary. Now I didn't expect at the time to be involved in all of those areas, but those were the areas that I thought would most effect the future and as it turned out I was fortunate enough to be involved in those areas.. but that's the thread that connects them - it's kinda my best guess at what would most likely effect the future in the biggest way.
When I first thought about doing something in space, the thing I was going to do was going to be a philanthropic mission to Mars to land a small greenhouse on the surface of Mars with seeds in dehydrated nutrient gel. They'd be hydrated upon landing and you'd have this little greenhouse on Mars and you'd have this great shot of green plants on red background. The public could respond to superlatives. I thought that would get people really excited about sending life to Mars. My expectation from that project would be 100% loss. Maybe I would make a little bit back on advertising or sponsorship or something but it would be essentially a complete loss. So starting a rocket company would necessarily have a greater likely outcome than 0% in the short term.
"At the beginning of starting SpaceX I thought that the most likely outcome was failure."
In terms of the electric car company.. at first I thought there would be no need to do an electric car company startup because California regulations basically forced General Motors to create the Volt.. or rather, the EV-1 I should say.. so when General Motors had the EV-1 I thought hey, this is great, the biggest car company in the world is making an electric car. It's called EV-1, that would imply that there's going to be an EV-2, 3, 4. [They killed that product off] and that was very unwise. It's really short sorted, I mean it's really unwise, in restrospect that's obvious. They not only cancelled that project, they forcibly removed the EV-1s that they'd given out.. that they had only gave out on lease. They removed them from customers against their wishes. Took the cars and crushed them in the yard so they could never be used again. The customers who's cars had been taken away, they tried legal action to try to.. they tried to sue General Motors to keep their cars. They actually had a candle lit vigil at the yard where the cars got crushed, and it's like, you know, when was the last time there was a candle lit vigil for a product? You know that's pretty ridiculous. Let alone a General Motors product. I mean, you have to be pretty tonedeaf to.. you don't need to do a customer survey to figure out that at least some number of people want these cars if they are treating it like somebody has been sentenced to death. Holy crap, if this is not going to happen, there needs to be a new car company that comes in and shows that it can be done.
The key thing that we've done is show that you can make an electric car that was good looking, high performance, long range and if you made such a car that people would buy it. They don't have some fundamental affinity for gasoline.
My initial thought was that I did not want to create an electric car company and run it myself because I was running SpaceX and the idea of running two companies.. that's a lot of work. Just like, imagine if a person had two pretty demanding jobs.. or you had one pretty demanding job and now you have to do two of them. That kinda takes the fun away.
Something's gotta give.
My initial thought was I'll hire some people and work the team and I'll work on the part design and the overall strategy or something, but I'll leave the day to day operations to a CEO that I hire. Unfortunately that didn't work out. I've actually tried hiring a couple of CEOs and I guess I couldn't find the right person and so it came to 2008 and.. I was kinda co-CEO from 2007 to 2008 while trying to bring some other people up to speed, and then - when the market fell apart - I had a choice between committing all my remaining resources in Tesla or it's gunna die for sure. I thought okay, if I'm going to do that I've got to bite the bullet and run the company, because there's just too much at stake. When you've got all your chips on the table, you've got to play the hand yourself.
I don't know, it just blows my mind. You can take a body panel and stamp it with this shape or that shape and yet they choose to do the bad shape.. but it costs the same either way. There are some things that cost a little more in terms of the quality of materials and getting things to fit accurately.. so there are few things that cost more but a lot of it doesn't. You know, you can make an ugly expensive car, you can make a good looking expensive car.. and the same goes for affordable good looking cars or an ugly affordable car. I think the cost differences are really relatively small. I don't know. I think maybe large car companies are just trapped in their own history.
No, it's literally just a series of weekly iterations with the design team. Every Friday afternoon I meet with the design and the engineering team and we go over every nuance of the car. Every bumper, every curve, every little piece of the car. What's right, what's wrong, and then that has to be filtered against the engineering needs and the ergonomic needs, and the regulatory requirements. So it's a really.. there's a lot of constraints. You can't make a car just any old shape you want. It has to achieve - meet all the regulatory requirements, the crash safety and all that. It just requires a lot of iterative activity and caring about every millimeter of the car. That's what results in a good product.
The hyperloop.. I need to set aside some time to actually write down some of the details. I want to make sure I don't say something completely stupid. I'm spending time with both the SpaceX aerodynamics team and the Tesla aerodynamics team, just to make sure that whatever I put out there really will work.
I think it genuinely would be a new mode of transport. I think one way to think of it is like it's.. it's kinda like a ground-based Concorde.
If you could make something go as fast as a Concorde, on the ground, how would you do that?
We shall see. No actually, I think rails are not needed.
I've got more ideas than time to implement. I think so.
This sounds really cliche, but like, the shower is probably like the most.. wake up, go shower in the morning and I think so what's really happened is things have percolated in the subconscious and it's not really occurring in the shower but you're kinda getting the results from last night's you know, computation, basically. And then sometimes it's late at night, if I can't sleep and there's something bothering me, then it'll occur then.
One key idea for a supersonic, vertical takeoff and landing electric plane occurred to me at Burning Man. It's a very creative place.
I think in terms of advice, I think it is very important to actively seek out and listen very carefully to negative feedback. This is something people typically tend to avoid because it's painful. But I think this is a very common mistake - to not actively seek out and listen to negative feedback.
Everyone I talk to is a - in fact, when friends get a product I say look, don't tell me what you like, tell me what you don't like. Because otherwise your friend is not going to tell you what he doesn't like. He's going to say 'I love this, and that' and leave out the 'this is the stuff I don't like' list. Because he wants to be your friend and, you know, doesn't want to offend you. So you really need to coax negative feedback, and you know if someone is your friend, or at least not your enemy, and they're giving you negative feedback, then - they may be wrong, but it's coming from a good place. And sometimes even your enemies give you good negative feedback.
So I think that's important. I suppose it should just be like, positive feedback is like water off a duck's back. That's like, really underweight that and overweight negative feedback.
I also think it is important to reason from first principles, rather than, by analogy. So the normal way we conduct our lives is we reason by analogy. We're doing this because it's like something else that was done or like what other people are doing. Iterations on a theme. It's kinda mentally easier to reason by analogy rather than from first principles. First principles is kinda a physics way of looking at the world and what that really means is you kinda boil things down to the most fundamental truths and say okay, what are we sure is true? or sure as possible is true? and then reason up from there. That takes a lot more mental energy.
Somebody could say.. in fact, people do.. that battery packs are really expensive and that's just the way they'll always be, because that's the way they've been in the past. Well, no, that's pretty dumb, because if you applied that reasoning to anything new, then you would never be able to get to that new thing. You can't say, oh, horses - nobody wants a car because horses are great and we're used to them and they can eat grass and there's lot of grass all over the place and you know, there's no gasoline that people can buy, so people are never going to get cars. People did say that, you know. And for batteries, they would say, oh, it's going to cost - you know, historically it's cost $600 per kWh and so, it's not going to be much better than that in the future, and you say no, what are the batteries made of? So first principles means you say okay, what are the material constituents of the batteries? What is the spot market value of the material constituents? So you can say, it's got: cobalt, nickle, aluminum, carbon and some polymers for separation and a steel can. So break that down on a materials basis and say okay, if we bought that on the London metal exchange, what would each of those things cost? Like, oh, jeez, it's like $80 per kWh. So clearly, you just have to think of clever ways to take those materials and combine them into the shape of a battery cell. and you can have batteries that are much much cheaper than anyone realizes.
It's the single biggest item but it's - right now it's not any kind of obstacle to us. There's a whole bunch of little issues that, are kind of trivial, that are challenges when you're making a new product because there are several thousand unique parts in the car, 90% of them are fine, 5% of them are slightly problematic, 3% or 4% are are problematic and 1% are extremely problematic. But you can't ship a car that is 99% complete. With software you just have to get stable functionality, but with a car, you know, you can't ship it without a steering wheel, or without a back seat, or anything like that.
Thanks for coming by.
Thank you very much for the kind introduction. It's an honor to be here. This is an incredibly beautiful theater. It's amazing to be in a place design by Christopher Wren. Speaking of Brunel, I'm a big fan of Brunel, I have five boys and I really wanted to name one of them Brunel.. or Isambard. No luck. Hopefully, one in the future.
I guess I'll just tell you the story of how I came to be here. The various things that I did and maybe why I did them. Hopefully, that's a bit helpful, and then we're going to have quite a long question and answer session, so feel free to ask me any question no matter how provocative or challenging to what we're doing. I'm actually always interested in negative feedback.
I did start out in South Africa, went to Victoria Boys' High, and then left, actually by myself, to go to Canada and then the US to college. Graduating from undergrad I had to make a decision. One path would have led to Wall Street and I guess quite a big salary, and the other was to do grad studies and try to figure out a technical problem and I didn't much like the first one. So, I decided to go out to Silicon Valley and go to Stanford and try to work on ultra-capacitors for use in electric vehicles, and I do actually think there's potential for a significant breakthrough in that area and actually have an energy storage mechanism that's better than batteries. It's not necessary for transport to go electric but I think it is something that would accelerate that. So, I was about to get into grad studies and then it was clear the Internet was going to be something that would be very important to the future, so I thought, well, I can either spend five years in a graduate program and discover that the answer is that there is no way to make a capacitor work, and perhaps get some nice papers published and that kind of thing, but that would be a most unfortunate situation, I thought. You know, one of the possible things to do is determine that success is not one of the possible outcomes, and I could not actually bracket the uncertainty on that.
So, I thought, I can either do that, or I can work on building elements of the Internet that - and this was in 1995, so nobody had actually made any money on the Internet but I thought the Internet would be something that would fundamentally change the nature of humanity. It was like humanity gaining a nervous system. All of a sudden, any part of humanity would have access to the collective knowledge, and that's true. It's really quite a remarkable transformation. In the past, if you wanted access to a lot of information, you had to be close to a big library or something - like the great Bodleian library nearby - but that would be the only way to gain access to information. Now with the Internet, with everything online, you can be somewhere in the jungles of South America and if you've got access to an Internet connection, you've got access to essentially all the world's information, with a tremendous amount of analytical power behind that. I think it has literally gone from a situation where people would communicate almost like via osmosis - if you can imagine a simple multi-cellular creature that would communicate via quite slow chemical signals - and now any part of humanity knows what every other part of humanity is immediately, it's pretty incredible.
So anyway, I wanted to be a part of building that, so I decided to start a couple of Internet companies. That actually worked out reasonable well. The first one helped bring the media companies online and then, we solved that, we started another company that you may have used, called Paypal and that we sold for a large amount of money to eBay and that left me in the fortunate position of having the capital to pursue the two other things that I thought would most affect the future of humanity. Being, sustainable energy - both the consumption and production of energy in a sustainable manner - which I think is arguably the most pressing problem of the 21st century, and then the other one, which is the extension of life beyond Earth.
The one I did first was the space company and the genesis of that is kind of interesting as, at first, I didn't think it would be possible to create a rocket company. I thought what would really make a difference is to have a mission to Mars, a small payload to the surface of Mars, that would get the public excited - to reignite the passion for space exploration such that we could go beyond what we did with the Apollo program. "I thought it was quite sad that the Apollo program represented the high water mark of space exploration. It was not something I was able to witness in real time, because I was -2 when they landed." It just seemed as though, if I thought about the future, one where we were a true spacefaring civilization out there exploring the stars and making the things real that we read in science fiction books movies, that seems like a really exciting future. That made me feel good about the future, and one where we're forever confined to Earth made me feel a bit sad. What I was trying to figure out is, how do we reverse that? Like I said, at first it didn't seem like it would be possible to start a space company because it seemed like the province of governments.
So my first thought was, if we could do a philanthropic mission to Mars and get the public excited about the idea of going there and then that would lead to an increased budget for NASA and then we could go there. That might, hopefully, work. I figured out how to compress the cost of the spacecraft and the communications systems and the payload and so forth. It would have been a small greenhouse, about a meter across, with seeds in dehydrated nutrient gel, that would land, and you'd hydrate the gel upon landing and you'd have this great shot of green plants against a red background. In the US, that's called the money shot. The public tends to respond to precedents and superlatives. This would be the first life on another planet. The furthest that life has ever traveled and I thought, okay, that would get people pretty excited and maybe they could envision people being there. We would certainly be able to figure out a lot of engineering insights into what it took to maintain planet life on the surface of Mars.
So, I got through most of that, but the thing that I got hung up on was the rocket. Getting there in the first place. The US options from Boeing and Lockheed were simply too expensive. I couldn't afford them. So, "I went to Russia three times to negotiate purchasing an ICBM." Of course. Desperate times call for desperate measures. I did three visits there and at the end of it, I was able to negotiate a price actually, to buy three of them - three of the largest ICBMs in the Russian fleet - but they were still pretty expensive and by the third trip I actually came to the conclusion that I was operating under the wrong premise. That I was actually mistaken about the willingness to send people to Mars to expand the space frontier. In retrospect, it was quite silly of me to think that people were not interested in such a thing or had lost the will to do this. In fact, people had thought that it was not possible for an amount of money that would materially effect their standard of living. So I came to the conclusion that even if we succeeded in doing this mission, that wouldn't be enough. That would perhaps add a little bit more to the will to do it, but it wouldn't make it clear to people that there was a way. This is the case of almost the opposite, "if you can show people that there is a way, then there is plenty of will."
So, after that third trip, I had learnt a lot more about rockets at that point, and I held a series of meetings - just sort of brainstorming sessions - with people from the space industry, to try to understand if I was missing something fundamental about the ability to improve rocketry. This is where I think it is helpful to use the analytical approach in physics, which is to try boil things down to first principles and reason from there, instead of trying to reason by analogy. The way this applied to rocketry was to say, okay, well, what are the materials that go into a rocket, how much does each material constituent weigh, what's the cost of that raw material, and that's going to set some floor as to the cost of the rocket. That actually turns out to be a relatively small number. Certainly well under 5% of the cost of a rocket and, in some cases, closer to 1% or 2%. You can call it, maybe, the magic wand number. If you had piles of the raw materials on the floor and you just waved a magic wand and rearranged them, then that would be the best case scenario for a rocket. So, I was able to say, okay, there's obviously a great deal of room for improvement. Even if you consider rockets to be expendable. That's what I mean about thinking about things from a first principles standpoint. If, on the other hand, I just analyzed it by analogy and said, okay, what are all other rocket companies - what do their rockets cost, what historically have other rockets cost, and that would be sort of an analogy thing, but it really doesn't illustrate what the true potential is. I think a first principles approach is a good way to understand what new things are possible. This is a good framework. It doesn't mean you'll be successful, but it means that you can at least determine if success is one of the possibilities. That is important, I think.
So, I started SpaceX and initially decided to make a small rocket called the Falcon 1 that was capable of putting about a half a ton into orbit. This did not go smoothly. It was quite difficult to attract the key technical talent and, of course, I was quite ignorant of many things. I made lots of mistakes along the way. The first three flights of the Falcon 1 failed, or rather, they certainly didn't get to orbit. The second and third flights arguably got to space but they did not reach full orbital velocity. Fortunately, the fourth flight worked. If it hadn't, SpaceX wouldn't be around, because I'd basically run out of money. So that was a bit of a nail biter. Thank goodness. In fact, this all happened in 2008, so there was really no ability to raise outside money in a meaningful way in 2008 because of the financial crisis. You can imagine trying to go to raise money and saying, well yes, we've just had four failures and the world is in financial ruin, but would you like to give us some money? It would be a definite no. So, fortunately, that succeeded and we were able to go from the Falcon 1 to begin designing the Falcon 9 which is an order of magnitude larger vehicle and, in fact, has over 20 times the payload. It's got a payload to orbit of over ten tons. That actually has gone a lot better because we had the experience of Falcon 1 to go by. The reason we started with Falcon 1 was that I thought we would make a lot of mistakes and if we're going to make a lot of mistakes then it's best to make those mistakes at a smaller scale rather than at a large scale. That seems to have worked, because going to Falcon 9 we've had four flights of Falcon 9 and all four of them have been successful. So I think that principle seems to have worked reasonably well. Touch wood, five flights coming up soon.
And then we also developed the Dragon spacecraft because, somewhat optimistically, NASA announced they were going to retire the space shuttle and they didn't have the budget to develop a cargo transport capability to the space station via the normal large government way, and so they put it out to bid to commercial industry, for the first time in NASA history. It's a big step. We were lucky enough to win one of those contracts and then the other company wasn't able to execute, so they got cut, and so we ended up being the primary means of transporting cargo to and from the space station. We just did the first two space station resupply missions this year, and thankfully both of those worked. Going from there, NASA then said, well, what about astronaut transport? So they put out a big competition and awarded two contracts for astronaut transport, one of which went to Boeing - they got a slightly larger contract - and one to us. Hopefully, in about three years, we'll have Dragon version 2 and the next generation of Falcon 9 rocket, transporting astronauts to and from the space station.
Then we've got Falcon Heavy which is about three times the capability of the Falcon 9 and that will hopefully launch in a year or two. That will actually be the most powerful rocket in the world by a factor of two. So we're making, sort of, steady progress. The Falcon Heavy, to put that into perspective, has about 60% of the capability of the Saturn V moon rocket. So, if you were to combine two flights of Falcon Heavy, with orbital rendezvous and docking, you could actually send people back to the surface of the Moon. Now we're really talking about advancing the frontier, which I think is quite important.
The really major breakthrough that's needed in rocketry, the pivotal one which we're aspiring to make, is to have a fully and rapidly reusable rocket. This has not been achieved before. The space shuttle was an attempt to achieve that, but it was not a successful attempt, unfortunately. The main tank of the space shuttle was through away every time, which was also the primary ascent aeroframe. Even the parts that were reusable were so difficult to reuse, for the space shuttle, that it ended up costing four times more than an expendable rocket of equivalent payload capability. It was the right goal, but didn't hit the target. I think this is actually incredibly important. I think it may not be completely intuitive, but I think if one refers to other modes of transport, it makes more sense. All other modes of transport are fully and rapidly reusable. That applies to a bicycle, a horse, a plane, ships. In fact, in normal life, it would be quite silly to discard your horse after every ride, you know, or dump the plane after you flew it. The cost of a 747 is about $300 million, and you'd need two of those to do a round trip from Los Angeles to London, but I don't think anyone has paid half a billion dollars to do that. Nor would one want to. There'd be a lot of travel by boat and train and that sort of thing, if that was the true cost.
So it's extremely important in rocketry to achieve full and rapid reusability. This is not an easy thing to do because of Earth's gravity well and just the basic physics of things. There have been many attempts to create a reusable rocket, but they've all sort of been cancelled along the way once people realized they would not succeed. In fact, usually they got cancelled quite some time after it became obvious that they would not succeed. But, the essence of the problem is, if you design an expendable rocket and do quite a good job of it, you'll get about 2% to 3% of your liftoff mass to orbit. Then if you say, well, how much mass is needed to return that rocket and be able to fly it again quickly? Well, about 2% to 3%. So you basically get nothing to orbit. That's how it's been in the past. In order to do something useful, what you have to figure out is, how do you get a much larger percentage to orbit? Let's say, ideally, on the order of 4% of your liftoff mass to orbit, in an expendable configuration, and then compress the reusable elements down to about 2%, so you have a net payload to orbit of 2%, and then you could really have something that's quite useful.
The cost of the propellant is only about, let's say, 0.3% of the cost of the vehicle. Take Falcon 9 for example, which uses quite expensive fuel, relatively speaking. I think there are lower cost options. The cost of reloading propellant on Falcon 9 is about $200,000 and the cost of the rocket is $60 million. It's just like a plane. If you were to refuel a plane, not very expensive. If you want to buy a new plane, very expensive.
At this point, I am reasonably confident that it can be done and now it's a question of executing to make that design work and seeing if there are any gotchas, and there will probably be a few craters along the way. I'm not expecting this to be a smooth journey. So long as the rocket doesn't land on anyone, we'll be fine. So that's really what SpaceX is focused on right now. Scaling up the size of the rockets and trying to achieve this full and rapid reusability. If you're curious, we're fairly public about things, you can just follow it on the SpaceX website. That's what we're doing on the SpaceX side.
Then, in parallel, we've got Tesla, which is developing electric vehicles. That's a whole separate story line. Tell me if I'm going on too long and stop me at any point. "Feel free to leave if I'm getting boring." I won't be offended. With Tesla, the goal is to try to create electric vehicles that are more compelling than gasoline vehicles as a product. The fundamental issue we have in energy and transport is the tragedy of the commons. We've got this CO2 capacity of the oceans and the atmosphere that is unpriced, or mostly unpriced. It's almost like we're dumping garbage in the atmosphere and nobody's paying for garbage collection. It's a most unfortunate situation. There are quite significant invested interests in oil and gas and coal, with enormous amounts of money. It's quite a difficult battle to fight. You can't expect them to simply roll over and commit suicide or something. They will fight hard and they have been. So, unfortunately, it requires fighting hard back and creating products, in the absence of there being a tax on CO2, that don't rely on the economics of using hydrocarbon fuels, verses electric cars. That was our goal, in terms of from the beginning, and I'm really excited to see that we've started to achieve that goal with the Model-S. As was mentioned, the Model-S was recently awarded top honors by - was awarded car of the year and automobile of the year - and that was against a very difficult field of gasoline cars. I'm hopeful that this will be seen as a pivotal moment in transport where people finally appreciate that an electric car could be better than a gasoline car.
Going into the future, our goal with Tesla is to keep refining the technology, increasing the scale of production, and make a mass market electric car that almost anyone can afford. That's step three on the strategy. Step one was high price, low volume. Step two was mid price, mid volume. Step three is low price, high volume. We're now at step two and we want to progress to step three as soon as possible. We do get quite a bit of criticism at Tesla for creating the Roadster, which we did in collaboration with Lotus. People were complaining, well, why are you making this expensive sports car. With the implication that we thought there was a shortage of sports cars for rich people and we were racing to meet that unmet need. The real reason is that, any car that we make at low volume, which is the first version of the technology, is going to be expensive. It didn't matter what that car looked like. So if we made something that looked like a very standard Toyota Corolla or a Ford Fusion or something like that, and it would have cost, say, $70,000. Nobody will pay that for what looks like a mid-sized economy sedan. They just won't. Or very few people would, but people are willing to pay $100,000 for a fast sports car. That's why we started off at that level, and with another big design iteration and an increase in volume, so we had economies of scale, we were able to create the Model-S, and with another order of magnitude increase in volume and another big design revision, that's what will allow us to cut the price in half again. Tesla also supplies power trains to Mercedes and Toyota, and we'll perhaps do that for other car companies, in an effort to help them accelerate the transition to electric vehicles.
That's Tesla and SpaceX and I should mention Solar City. One must generate electricity in a sustainable way, as well as consume it in a sustainable way. People will say, well, don't electric cars create pollution at the power plant level? It should be noted that, for any given source fuel, it is always better to generate the power at the power plant level and then charge electric cars and run them, for any given source fuel, because power plant are much more efficient at extracting energy than internal combustion engines in a car. They are at least twice as efficient and usually more like three times as efficient. So, for any given source fuel, even if the whole world were always going to be powered by hydrocarbons, it would still make sense to do electric cars. But, of course, we must find a sustainable means of generating energy as well, and I think that the most likely, well, the main candidate for sustainable energy generation is actually solar. I think that this is actually rather obvious because the Earth is almost entirely solar powered today, as it is. We'd be a frozen ice ball at, I don't know, three or four kelvin, if it weren't for the sun and our entire system of precipitation is powered by the sun. The ecosystem is almost entirely, 99.999% powered by the sun, except for some chemotrobes at the bottom of the ocean. It's rather obvious that one should try to take a little portion of that energy, and it's actually not much, and convert that into electricity for use by society.
I'm quite confident that solar power will be the single largest source of electrical energy for humanity in the future. It will be combined with other things, of course, such as hydro power, geothermal, and I actually think nuclear is not a terrible option, so long as you're not located in a place that's susceptible to natural disasters. That, also I think, defies common sense. So long as there are not huge earthquakes or weather systems that have names coming at you, then I think nuclear can be a sensible option. There are much safer and better ways of generating nuclear energy - I'm talking fission here - than existed in the past when nuclear reactors first came out. At some point in the future it would be nice to make fusion work, of course. That'd be quite good, but in the mean time I think indirect fusion, being solar power, is a good thing to do. That's what Solar City is doing, it's really trying to improve the economics of solar power, and they're doing a great job. I don't run the company, so the credit really goes to the two key guys who run that company. They're doing a great job of really accelerating the good option of solar power in the United States, and hopefully they'll come to the UK as well.
That's about it. So we have Q and A.
Absolutely. In fact, the energy density, basically the amount of energy you can store in a given amount of mass or volume, has been a fundamental constraint on electric cars for a while and that's correlated to some degree with the cost per kWh, the cost of storing that energy in the car. With the advent of lithium-ion technology, that I think, is really what enabled a compelling car and lithium-ion batteries continue to improve. Roughly, on average, maybe 8% or 9% per year. Which, when compounded over several years, ends up being a meaningful improvement. As mentioned in my talk, even if there was no fundamental improvement beyond lithium-ion batteries, I think we could still take all terrestrial - all ground transportation could go electric. We do need a further breakthrough for aircraft, where the energy density requirements are at least 2 to 3 times more significant but, even with current generation lithium-ion, we could go to mass market with ground vehicles. In fact, our focus is really more on reducing the cost of the battery pack than improving the energy density.
So, I think we're actually in a pretty good spot and I am reasonably optimistic that there will be a breakthrough in high energy density capacitors. It's sort of interesting. If you do the basic physics on the energy density potential of a capacitor, using naturally occurring materials, it's quite hard to beat lithium-ion batteries, but if you can figure out a way to make - unnatural materials I suppose, that are accurate at the molecular level then I think you can have some fairly significant breakthroughs. The ability to do that was developed in the photonics arena and applying those photonics breakthroughs to capacitor technology is what has the potential for a really big breakthrough there. So, I think we may see something on that level, but it isn't entirely required for cars.
For rockets, well, there's no way to make a rocket electric. That's for sure. Unfortunately, Newton's third law cannot be escaped - I think. Certainly, there'd have to be a few Nobel prizes awarded if there was a way to get around it. That'd be really convenient. I do think it's possible, with a really efficient combustion rocket, to achieve the settlement of Mars. I think we'll probably want to switch to methane - either methane or hydrogen, they're kind of the best two choices, and probably slightly leaning in the direction of methane because it's easier to handle than hydrogen. Methane is CH4 verses H2. Both can be produced on the surface of Mars, which is important. I should say that I'm quite confident at this point that it is possible to create a self-sustaining civilization on Mars using only a methane or hydrogen based launch system - it needs to be a fully reusable methane or hydrogen based launch system and it can be done. The key I was trying to figure out was, with volume, is it possible to get the cost of moving to Mars down to under half a million dollars, which is I think is - no-one can argue about the exact threshold, but I think that is about the threshold which enough people would save up money and move to Mars. I mean, that's how America got created, basically. "They can come back if they like, if they don't like it, of course. You get a free return ticket. There's sometimes a debate about going to Mars one-way and whether that makes things easier, and I think for the initial flights perhaps, but long term, to get the cost down, you need the spacecraft back. Whether the people come back is irrelevant, but you must have the ship back because those things are expensive. So anyone who wants to return can just jump on." But until a few years ago, I wasn't sure that success was one of the possible outcomes and now I'm quite sure that success is possible. Of course, there's a long way between possible and making it real, but I believe it is possible.
And then robotics, right. I think one can accomplish a lot with robotics. I do slightly worry about, if robotics get too good, what's the point of us? I think, either robotics get so good and there's not much point to us, I guess, I don't know, or they're not as good as us, in which case, we need to go. I'd advocate the second. Hopefully, in the future, there's not some AI apocalypse.
We still have the original mule one of Tesla Roadster and here I should give credit to a small company in southern California called AC Propulsion that had a vehicle called the T-Zero. Our very first mule was really taking a Lotus Elise and jamming an AC Propulsion power train into it and then making it drive. We originally thought that - it's another example of making some dumb mistakes but the thought at the beginning of Tesla was to use AC Propulsion's power train in a Lotus Elise and to get to market fast with an electric car. As it turned out, the AC Propulsion power train didn't really work, very well, and was not scalable for production - had a lot of issues - and so we had to completely redesign the power train and then, the Elise, because our car ended up being 50% heavier and had different weight distribution, and low points, we invalidate all the crash structure and had to completely redesign the chassis. In the end, I think about 7% of the parts were in common with the Elise. So, almost nothing, but we actually inherited some of the limitations of the Elise. Long winded answer, I'll try to be less long winded in my answers.
"With respect to air breathing hybrid stages, I have not seen how the physics of that makes sense. There may be some assumptions that I have that are incorrect, but really, for an orbital rocket, you're trying to get out of the atmosphere as soon as possible because the atmosphere is just as thick as soup when you're trying to go fast, and it's not helped by the fact that the atmosphere is mostly not oxygen." It's 80% nitrogen. So, mostly what you're air breathing is chaff, not wheat, and having a big intake is like having a giant brake. The braking effect tends to overwhelm the advantage of ingesting 20% oxidizer. You could just make the boost stage 5% to 10% larger and get rid of all the air breathing stuff and you're done.
That's a good point. "New technology and innovation can have a downside and one of the downsides is people are able to extract far more hydrocarbons than we thought were possible." Once you start getting into deep methane, or deep natural gas, you're actually tapping into things that are not related to dinosaur fossils. Methane is a naturally occurring gas. There are places in the solar system where the atmosphere is primarily methane. So, it does not require an organic origin. If we dig too deep for methane, we're actually going to a level that has never been seen before, not even in the very earliest history of Earth. So that's very dangerous I think. That's why I think it's important for electric cars to be able to compete without an economic benefactor. But, I think, it is very dangerous to be extracting vast quantities of hydrocarbons from deep within the Earth and putting them in the atmosphere. Sooner or later, something very bad will happen. There are a lot of people, particularly in the US, who are vehemently against electric cars and sustainable power, and it's quite difficult to reason with them, actually. They'll say, well, some scientists don't think it's a problem and I'm like, okay, well, you can find someone reputable who will disagree with anything. This actually reminds me of the tobacco industry where, for the longest time, there were actually - you'd see ads where they would claim that tobacco is healthy for you - I know, hard to believe these days. There were these reports, where there seemed to be some correlation between lung cancer and smoking, and they were like, our scientists have conducted experiments and they show there is no relation between those, it's complete nonsense. It got to the point where almost any reasonable scientist would say, yes, of course, smoking causes lung cancer and all sorts of other bad things. Not definitively, but it's extremely likely, and yet the tobacco industry would still say, oh, scientists disagree, because 1% or 2% of the scientific community didn't feel that way. The public just hears: scientists disagree. They don't hear: 99% of them think it's stupid. It's definitely a tough thing and hopefully that transition occurs before it's too late. There's already quite a bit of momentum in the direction of climate change, and accelerating the removal of hydrocarbons from the crust and placing them in the atmosphere is, I think, just very unwise. That's why I think it's the biggest problem of the 21st century.
I think I'm going to stay on electric cars and rockets for a while. It was actually never my intent to run Tesla, because running two companies is quite a burden, actually. I sometimes run into people who think, oh, if you're CEO of the company then they sort of imagine themselves, if they were CEO of the company, they would grant themselves lots of vacation and do lots of fun things. It's doesn't quite work that way. What you actually get is, a distillation of the worst things going on in the company. So, the idea of taking on something more, is very frightening. Possibly, at some point in the future, certainly not the near term, there's an opportunity to create an electric jet, eventually. I do think I want to create an electric jet that is really exciting. Something that would be supersonic, vertical takeoff and landing, pure electric, and just a big leap forward. I'm quite confident it's doable, provided that there's a rough doubling of the energy density in batteries or capacitors. Basically, around the 500W/kg level is where it starts to make sense. I do think there's the possibility of a fifth mode of transport which I've mentioned tangentially, which I call the Hyperloop. I'd like to publish something about that, maybe in the next month or two, once Tesla is at steady state production, and I want to flesh it out a bit so that I can pre-address some of the rebuttals that people will come up with, rather than just put it out there and then have the rebuttal occur and have an unaddressed rebuttal. I guess a way to think of it is, it's like a cross between a Concorde and a rail gun.
The full answer is quite complicated and requires at least some understanding of how rockets work, but if you divide a rocket into the cost of the engines, the air frame and the electronics, and then the launch operation itself, those are the marginal cost drivers and then there's the fixed cost of the company, which you divide over the number of launches that take place, but just looking at the marginal cost drivers, it means you have to make a significant advancement in engines, air frame and electronics and launch operation. In fact, it would be easy to point out one of those areas but success in one of those areas would only have a small effect. So, let's say you had free engines, well that would only reduce the cost of the rocket by, probably, 30% - the cost of launch by 30%. That's not a huge breakthrough. Or free electronics. Or free air frame. You actually have to compress all of them quite a bit, and then, like I said, you have to make them reusable.
I can give an illustrative example in the air frame. That may be helpful. The normal way that a rocket air frame is constructed, is machined iso-grid. That's where you take high strength, aluminum alloy plate and you machine integral stiffeners into the plate. This is probably going to go slightly technical, but imagine you have a plate of metal and you're just cutting triangles out of it. That's normally how rockets are made. Most of a rocket is propellant tanks, these things have to be sealed to maintain pressure, and they have to be quite stiff. The approach that we took is, rather, to build it up. To start with thin sections and friction stir weld stiffeners into the thin sections. This is a big improvement because if you machine away the material you're left with maybe 5% of the original material. So, a 20 to 1, roughly, wastage of material, plus a lot of machining time. It's very expensive. If you can roll sheet, and stir weld the stiffeners in, then your material wastage can be 5%. That's the inverse, essentially. Instead of having a 20 to 1 ratio, you have got 1.1 ratio. Instead of having 95% wastage, it's 5% wastage. It's a huge improvement. You can actually improve the mass fraction too, because if you have stir welded stiffeners, you can increase the profile and improve the geometry of the stiffeners so you can have something which is, say, 5cm tall whereas, if you machined it from a plate, it'd be limited to the thickness of the plate which may only be 2cm or 3cm tall. You actually end up with something which is both more advanced, in that it is better mass fraction, but is also a fraction of the cost. That's one example, but there are many such things.
I think the thing we need to do is, we need - the best thing to do to achieve that - would be a carbon tax. The market system will work extremely well if it has the right information - to work. If we just apply a tax to carbon and then dial that up according to whatever achieves the target maximum carbon proportion in the atmosphere that's, I think, the right way to go. Countries really need to act unilaterally. We can't have this thing where such and such country isn't doing it, I'm not doing it. Well, okay, set a good example and hopefully, over time, other countries will fall in line, or get ostracized. I think that's probably the smart move, and then we can avoid - there's no need for subsidies and special incentives which are really a backwards way of trying to deal with the lack of a carbon tax. I think, in the good scenario, the best possible scenario would be that something like that is instituted. We're still going to have a significant increase in the amount of carbon in the atmosphere, temperatures are still going to rise, sea levels are still going to rise but - the Dutch can manage, you know, with - a lot of dyke companies will, you know, there's a lot of options in the dyke business. I think, if we take action reasonably soon, we can avoid a calamitous outcome. If we only take action towards the end of the century, then it's going to be extremely bad. I don't think people quite appreciate the fact that there's the momentum of climate change, you know. Even if we immediately stop all carbon production, the momentum will still carry forward and increase the temperature, raise water levels, make storms more powerful, all those things. I'm trying.. what's the good outcome? The good outcome is, we do carbon tax, we minimize the carbon production, we move to sustainable transportation and energy production, which I said, is going to be like solar, wind, geothermal, hydro, and some nuclear, I think we have to accept that nuclear is a good option, in certain places. I actually think that the most likely outcome is a reasonably good one where there's damage but we recover. I actually think that will occur. I'm quite optimistic about the future. I'm not suggesting complacency in the least, but I'm optimistic about the future.
I actually think, as long as the sun is shining, we'll be fine. If humanity had to get all of its energy from the sun, it could do so. There's truly an astounding amount of energy that comes at us from the sun. It's interesting - if you took the land area used by nuclear plants, including the stay-out zones and everything, and said, okay, what generates more power, the nuclear power plant or just covering it with solar panels? In most cases, it's solar panels. Just the area used by the nuclear power plant, in solar panels would generate more energy because you actually have to have a big stay-out zone, you can't just put a nuclear power plant in the outer suburbs, with a bunch of people around it, so you have to have this big clear zone and so, they use a lot of area. But just to give you a sense of how much power can come from the sun, this is literally true, what I've just said.
Just by process of elimination. Mercury is obviously just way too close to the sun. They may be some mere habitable zone on the back side of Mercury, but I think one's sort of asking for trouble on that one. Venus would be a lesson for what Earth could become in worst case scenario. A superheated, high pressure - and, in the case of Venus - acid bath. It's literally a high pressure, high temperate acid bath. Definitely not a good place. I think the longest that even any probe has lasted on Venus is measured in hours. The Moon is close, but it's a very small rock, you know, that's just circling Earth, with no atmosphere, very limited amounts of water ice that are in permanently shadowed craters, and it's got a 28 day rotational cycle which isn't great for plants. It would be quite tough to make a self-sustaining civilization on the Moon. So then, coming to Mars, it's definitely a fix-er-up-er of a planet. It's not perfect, but feasible. It's got a rotational period of 24.5 hours - remarkably similar to Earth. It's got just under half Earth's gravity - so it's a lot closer gravitationally. It's got a lot of water ice - almost all of Mars has water, bound up in ice form, in the soil. The soil has turned out to be non-toxic, it's be found by probes that we've sent there. If you had a greenhouse and some fertilizer, and you just warmed things up and pressurized it a little bit, then you could grow plants on Mars. Mars has a CO2 atmosphere which plants like to consume. Plants consume CO2 and, on net, give you oxygen. I think it's very doable to create a self-sustaining Mars base and then, ultimately, terraform the planet to make it like Earth - so we could just walk around outdoors. Obviously, that's a longer term project, but it is within the realm of possibility. Going beyond that, you're going to Jupiter and the asteroids. You could potentially do something on the moons of Jupiter or Saturn, but that's way harder than Mars.
I think space exploration is going to be a mixture of private and government activities. In fact, for SpaceX, there are many things we want to do to enable scientific missions and enable NASA and JPL and ESA and others to be able to do much more for a given budget. In fact, we've had a number of conversations with JPL, which is located quite close to SpaceX, about using our Falcon rocket and Dragon spacecraft - version two of the Dragon spacecraft will have propulsive landing capabilities, so version two of the Dragon spacecraft will be able to land on any liquid or solid surface in the solar system. There's potential to turn that into a generalized science instrument delivery platform, for anywhere in the solar system. You could see then how one could figure out how to do a sample return. You know, if you were to land Dragon and have a smaller sample return rocket housed within the Dragon spacecraft, that could return some martian regolith, that'd be pretty cool. So, we're exploring some ideas there and I think we'll see at least some science missions being done in the future - maybe a lot of them. We're still at the early stage but we do have JASON-3 which a joint NASA-ESA mission that's going to be launched on one of our rockets in about two years and, of course, we're resupplying the space station. So, I think it's going to be a mixture of government and commercial. I'm for whatever means will make it happen. I'm not hot over government or commercial, just whatever works for all practical purposes.
I don't think it's going to be economical to mine things on Mars and then transport them back to Earth because the transport costs would overwhelm the value of whatever you mined, but there will likely be a lot of mining on Mars that's useful for a Mars base, but it's unlikely to be transferred back to Earth. I think the economic exchange between a Mars base and Earth would be mostly in the form of intellectual property. Anything that can be transmitted by photon, that's the most likely exchange of things that will occur. I don't think we need to worry too much about the exploitation of Mars, essentially. I mean, that would be a high class problem to deal with, for sure.
I'm not the biggest fan of biofuels because I try to look at things and just calculate the basic physics of it, really elementary stuff, and say, okay, well, what percentage of the incident sunlight is bound up in usable chemical energy and then once you have that chemical energy, how much of that is then translated into electricity? You have to compare that total efficiency with just having solar panels. Unless I've made some really dumb mistake, which is possible, you're about a hundred times off with biofuels. I mean, at least two orders of magnitude. What it boils down to is what's square meter per electricity generated? With the best case biofuel - take every assumption and maximize it, so don't say, don't worry, maybe somebody could invent something better, say what is the best - just envelope the whole thing. Say you had unbelievably efficient plants. I mean, you can't violate any laws of thermodynamics, but assuming that you're at the limits of thermodynamics in all those cases, then biofuels - at least your land-based biofuels - there's no way this makes sense. You end up being around, maybe, 0.2% efficient in turning sunlight into electrical energy, whereas commercial solar panels are 20% efficient. So why would you ever do biofuels? It's not as though there are large swaths of arable land unused. You have to say, well, if you go with biofuels, it's going to either result in wilderness being cultivated or an increase in food prices. You can also say, is it possible, if you stopped all food production in the world, to generate enough energy to meet the world's needs? Like, yeah, you could probably - it's about right, actually, if you stopped all food production you could just about meet the world's energy needs. Now, there is a possibility of ocean-based, because Earth's surface is mostly ocean. So, if you could find a way to - maybe some sort of ocean algae-based solution where you're unconstrained by surface area, although I still think you'd have to compare that to a bunch of floating solar panels and I think you still lose on floating solar panels. I don't see how it would make sense.
At some point, there will have to be improvements to the electricity grid, but because there's a huge disparity in the peak energy use during the day and the energy use at night, and most charging of electric cars occurs at night - we have a quite strong empirical basis for concluding this, because we can look at all our customers and plot their energy usage and it's very predominately at night. It's basically just like your cell phone, you go home, you plug it in and it charges overnight. The electricity grid has to be sized for the worst second of the worst day of the worst year with some power plants not functioning. Well, that's how the electricity grid should be sized. Sometimes it doesn't work out that way. Most the time you have huge amounts of excess capacity. In the US there was a study done - there's studies done on all sorts of things, some of them are complete nonsense, I love the words 'studies say..' but I think this study is probably accurate - that you could replace about 70% of the passenger miles - in the United States, at least, I don't know how to apply that to Britain - but about 70% of the passenger miles with no change to the grid. Assuming charging predominately at night. If you combine that with increased use of solar panels on houses and businesses, you have localized power generation, and the nice thing about solar power is it tends to match energy usage. Just generating power during the day and that's when you tend to use the most power. Particularly on summer days when you have air conditioning running. Air conditioning is a huge consumer of electricity. You generally only need it when it's warm and sunny - that's when you need it most. I think we're okay on the grid front, at least for the near future, it's only going to become a problem once, let's say, electric vehicles are at least approaching 10% or 20% of the vehicles on the road and then, I think, you'll be able to address the problem on a fairly localized basis.
Thanks for having me, it's always great coming back here. This is a really awesome place and I always like talking to people from the aerospace industry. I think, when I came here four years ago, I think that was right before we reached orbit. Maybe just several months before we reached orbit. So just to put things in perspective, while recent years have been good, that has not always been the case. The first three flights of Falcon 1, failed. The first flight failed quite soon, the engine shut off about 30 seconds into flight, it continued ballistically for another 30 seconds and then landed like an anti-tank weapon, not far from the launch site. At some point we'll release the blooper reel, but I think we'll wait a few years before we do that. But from those first days, when myself and the team were picking up bits of rocket off the reef, things have come a long way. We actually had two more failures after that one, and then the fourth flight, in late 2008, was successful, and that was a close one because I'd run out of money, and there weren't a lot of people who were keen on funding a rocket company, and I think if we'd said yes, our fourth launch wasn't successful, but the fifth one's the charm, that would not have gone down well.
Thankfully, the fourth launch did work and that I think gave customers of ours, NASA and others, the confidence to award us additional launch contracts and for additional private investment to come and help fund the company, besides myself. I would like to thank those investors, Draper Fisher Jurvetson, and Founder's Fund, and [indiscernable] for having faith there at an early stage to invest in a rocket company. Since then, we got that fourth demonstration launch to work, and then we did our first satellite launch, which was a commercial mission for Malaysia and that launch successfully put the satellite into orbit and I think it's actually still up there, and then we were able to go from there to develop the Falcon 9. In the Falcon 9, we've leveraged the engine we developed with the Falcon 1, the Merlin 1-C, and we've essentially ganged nine of those together on the first stage, and then one on the upper stage with an expanded nozzle, and that actually gave us about 20 times the payload capability of Falcon 1 because, in the case of Falcon 9, we were using a pump fed upper stage as opposed to a pressure fed upper stage. It's an important difference, for those of you who are familiar with how rockets are designed.
We took most of the lessons learned from Falcon 1 and we were able to apply that to Falcon 9, so that the launches of Falcon 9 were all successful - they all reached orbit. Sometimes there were a little glitch along the way, but they all reached orbit. There's an advantage to having the 9 engines, because if one of them doesn't work and has what we call a RUD - which is rapid unscheduled disassembly - then it still makes it to orbit. That's something we think is important for commercial airliners - all commercial airliners have multiple engines so that if you're going across the Pacific at night and you lose an engine, you don't have to use the life raft or that jacket that they give you which, I think, has not been used effectively, very often. So multi-engine, I think is good, and we're going to keep that philosophy going forward, and where we're going now is to the next generation of Falcon 9, which is a vertical take-off and landing capability. I'll show you the video, which is the first sorta flight of the Grasshopper project.
That craft is actually, quite big - it's about 10 stories tall and that flight was to about five meters. In coming months we'll be increasing the envelope, which is just the sort of thing you do with aircraft, where you have envelope expansion - you gradually increase the altitude and speed and as you see things getting a little wobbly, then you take corrective action - ideally before there's a crater - and you can iterate to a successful outcome. But do I think there will be a few craters along the way. I think that's a likely outcome. We'll be very lucky if there's no craters along the way in creating a vertical landing rocket. Obviously we already know how to do vertical takeoff, but we've got to learn how to do vertical landing. The reason to do the vertical landing is we aspire to achieve a breakthrough which I think is extremely important for rocketry, which is rapid and complete reusability. It's important that it be both rapid and complete, like an aircraft, or like a car, or a horse, or a bicycle. Even if you have to repaint a plane between flights, you'll probably more than double the cost of the ticket. You really need to be able to just reload the propellant and fly again. And that's going to take a bit of effort. It's not going to happen overnight, but we'll keep going in that direction until ultimately it's as close to aircraft-like reusability as one can achieve.
If you compare the cost of the rocket, to the cost of the propellant, you can see why. The cost of the propellant is only about 0.3% of the cost of the rocket, and we have a low cost rocket, it's not like our rocket is expensive. The Falcon 9 is $60 million, and that's for something which has four times the thrust of a 747 and about the same liftoff mass, so that's a good deal, but the propellant is only $200,000. So, if we could use the same Falcon 9 rocket a thousand times, then the capital costs would go from being $60 million per flight to $60,000 per flight. Obviously, that's a humongous difference. Now, there would still be some external costs in terms of service, just like you do on an aircraft, you have inspections and servicing and do all that sort of thing, so there'd be that cost to take into account, but still, it would be dramatically more cost effective to get to orbit, and I think it would open up options that today are hard to appreciate - just as in the early days when - I was just in the camel room, with the Sopwith Camel, I don't think people could have envisioned that you could take a 747 non-stop from Los Angeles to London. So it's similar, when we say today that we can see where things will be in the future, but if we enable that capability then that would improve the technology, then all sorts of things happen. We've gotta make that happen. We've gotta achieve that goal.
I think it's a pivotal step on the way to establishing a self-sustaining civilization on Mars. If we don't do that I just don't think we'll be able to afford it, because it's a difference between something costing a half a percentage each year of GDP and all the GDP.. obviously it can't be all of the GDP, we'd get a lot of complaints about that, but half a percent of GDP, or maybe quarter a percent of GDP, okay that's manageable, and I think most people would agree, even if they don't intend to go themselves, that if we're spending something between a quarter to a half a percent of GDP on establishing a self-sustaining civilization on another planet is probably worth doing. It's sort of a life insurance policy for life, collectively, and that seems like a reasonable insurance premium, and plus it would be a fun adventure to watch even if you don't participate. Just as, when people went to the Moon, only a few people actually went to the Moon, but in a sense, we all went there vicariously. I think most people would say that was a good thing. When people look back and say what were the good things that occurred in the 20th century, that would have to be right near the top of the list. So I think there's value, even if someone doesn't go themselves.
So that's why it's really important. Then, if you get to, well, why don't we have fully and rapidly reusable rockets? Why doesn't someone just do it? Well, it's quite tricky, that's the reason. We live on a planet where this is not easy. It's possible, but quite difficult. If we lived on Mars, this would actually be a quite easy thing. But, at 1g, this is just barely possible, I think. The reason it hasn't occurred in the past, is that when people try to design a rocket, and even one that is expendable, after a lot of smart people have worked on the rocket using advanced materials and various techniques, you typically get 2 to 3% of liftoff mass to orbit, and that's expendable. So if you say, okay, well, what if you want to add in the reusable bits? Adding the reusability tends to take another 2 to 3%. So then you end up with zero or negative, and there's not much point sending a rocket to orbit with nothing on it. In the past, things have been cancelled when it looked like success was not one of the possible outcomes. In fact, usually they've been cancelled after it was clear that success was not one of the possible outcomes. So, the trick then, is to make a rocket that is so mass efficient that it gets close to 4% of its payload to orbit in an expendable configuration, and then improve the weight of the reusability bits, push that down to around 2% and you get a net of four minus two - so, on the order of 2% of your payload to orbit in a fully reusable scenario. That requires paying incredibly close attention to every aspect of the rocket's design. The efficiency of the engine, the weight of the engine, the weight of the tanks, the legs, even the secondary structure, the wiring, the plumbing, and the electronics, making sure your guidance system is extremely precise, and just pulling all sorts of tricks - every trick in the book - and then coming up with some new ones. In order to achieve that level of mass efficiency.
Now, I think I see a path to making this happen, but those could be famous last words. That's what we're seeing the beginnings of. It'll take a while, I don't know how long it'll take, but I'm hopeful that we can start to bring back the first stage in the next year or two. We've already brought back Dragon, so we know what bringing something back from orbit is like, and we'll start to reduce the mass rquired to bring something back from orbit. We really have to hone it down so that the thermal shielding and the strengthening of the structure is only just what is needed to come back and not any more. And then I think, perhaps full reusability is in the 5 to 6 year time frame, but that could be famous last words. So that's our goal.
That's the most important thing, technically, that SpaceX has to achieve, and in parallel we're doing things like the Falcon Heavy, which will have two additional first stages as side boosters and with the upgraded thrust of the Falcon 9 that will take it to nearly 60% to 65% thrust of the Saturn V - just to put it into perspective. Maybe around 4.5 million pound thrust, which is about twice as powerful as any other rocket on Earth but, I think, if you want to go to Mars you need something substantially bigger than that. So, some future vehicle will likely aim to be quite a bit bigger than that.
So that's where SpaceX is and stay tuned for more developments. With that said, I'm happy to answer any questions from the audience. So let's jump in.
I should have remembered to play this video. This gives you a sense of what I'm talking about for the reusability. Now, this was done by a modelling team, it wasn't done by the SpaceX engineering team, so it's not entirely specifically accurate, but it gives you a sense for things at least. So, now we've gone through stage separation, the first stage is going to turn around and reignite - it's actually going to reignite three of the engines, not - see, it's doing three there - it sort of magically got rid of the inter-stage which is obviously, not supposed happen, and the real legs are much bigger than that, those are the little guys. But that's approximately - imagine much bigger legs, and a much taller stage with an inter-stage on top, and that's approximately what will happen. So yeah, that's the vehicle, and then there's the next generation of Dragon, the Dragon version 2, which actually does not look like that, but we'll be unveiling that fairly soon. I think that is pretty cool. Dragon version 1, we didn't really know what we were doing, most likely know more at this point. That's why Dragon version 1 looks fairly similar to things in the past, we thought, well, better not stray too far from things in the past, and hopefully it worked. Yeah, so the next version of Dragon will do that, but it looks a bit different, but it'll have legs that pop out and it has eight thrusters that are arranged in four pairs around the exterior. On the actual vehicle, the pairs are not at quite 90 degrees, partially because we wanted to shift the engines that are on the wind-ward side of the back shell, a little more towards the lee-ward side, so they're not quite 90 degrees apart, they're a little closer together on one side, and they're much bigger than what you see there. The super-Draco engines are designed to accelerate the Dragon spacecraft at over 6 gees. So you can go, basically, depending on what sort of dynamic pressure you're facing, go through the sound barrier in about three seconds. I think at altitude your thrust increases, so you're more like 7 to 8 gees.
So, sorry, you're asking about, what have we done in respect to thinking about Mars, sort of, colonial systems? The question is, how did I come up with half a million dollar price tag to move to Mars. Well, umm, I sorta started back from the half a million dollar point. To say, sorta, umm, well, in order for Mars to become a self-sustaining civilization, the ticket price has to be low enough that if someone were to work hard and save up then most people in advanced countries in, say, their mid-40s or something like that, could put together enough money to make the trip. I thought, a half a million dollars, well, that's a middle class house in California, basically. Sometimes it's hard to get one for half a million dollars. So, something on that order, that's roughly the right order of magnitude, and then, working backwards, well, you definitely need to have full reusability because even partial expendability would kill that price, and then you need to use a source propellant, a source fuel I should say, because liquid oxygen is incredibly cheap, it's like 2 to 3 cents per pound, so really it comes down to the fuel and pressure, and well, the cheapest fuel is methane.
So it's gotta be methane, and the nice thing about methane is you can create it on Mars, because Mars has a CO2 atmosphere and there's a lot of water ice as well - and conceivably, you might be able to extract water from the atmosphere, but that may be harder than simply mining water. With water you've got H2O, plus CO2, that gives you CH4 O2, and bingo, you can replenish propellant. Now, you can do this either with hydrogen, or with methane. For a while, we were sort of going down the hydrogen path, and I was looking at the numbers and you get to roughly equivalent delta-v with methane or hydrogen, because of the better mass fraction of the methane system, and then you combine that with the fact that methane is much easier deal with, it's not a hyper-cryogen, and it doesn't have the wiggly hydrogen molecule that likes to get into all sorts of unpleasant places which causes metal embrittlement, and create invisible high temperature fires and that sort of thing. So methane is just sort of a much easier thing to deal with and so - performance about the same, easier to deal with, obvious move in that respect. And actually, with a properly designed methane engine, a staged combustion engine with decent combustion efficiency in the 99% range and reasonable area ratio, 380 isp is quite achievable. The Russians, in ground tests, have achieved 380 isp. So this is clearly an achievable number. So that's sort of the production we're thinking of going, for that.
So yeah, you want something that is pretty big. You know, because if they're going to have to spend a lot of months in it, it can't be the size of a minivan. A round trip to Mars, with 6 months there, 18 months on the surface and 6 months back, two and a half years, you want a little room. I shudder to think of doing that in Dragon. You'll come back batty, if you come back. I think Dragon could be quite useful as a generalized science delivery platform for anywhere in the solar system, because, with propulsive landing you could - that's a generalized solution. You could land on any solid or liquid surface in the solar system, and I think, really, enable a lot more science missions for a low budget, if getting there is taken care of. So that's why I do think Dragon is going to be useful in that respect, apart from being able to carry cargo and people to Earth orbit missions and maybe some other missions too.
'Big Dumb Booster' usually refers to a pressure-fed stage. It usually means, minus the turbopump. I think that is actually not a good way to go. You want the turbopump, otherwise your rocket is just too heavy, because if you go with a pressure fed stage, your entire stage has to operate something like the chamber pressure, and you'll have a ton of pressure left there at the end of the flight. So it's just not a great way to go. Turbopumps are hard, but they're not that hard. They're just a spinning centripetal pump, that's tricky, but they're not that tricky. The hard thing about a rocket engine is just getting those last incremental seconds of ISP. That's where it's really quite difficult, and those last seconds of ISP matter a lot for something that's going to go beyond Earth orbit, where just every little tiny bit of ISP is important. So I really do think you just have to push everything to the limit in terms of advanced materials, smart design of everything, high efficiency engines, everything, it's all got to be pushed to the limit. What you don't want to do though is have insufficient margin in your engines and structure such that you have to rebuild them after returning them. That's, I think, an error that was made with the Shuttle. The SSMEs were just really difficult to reuse. They required a lot of inspection and parts replacement between flights. So I think we may need to back off a little bit on our chamber pressure, still aim for a high combustion efficiency but back off a little bit on chamber pressure.
Where SpaceX, I think, does quite well is in the mass ratio of the stages. We have a very good stage mass ratio that's, with the current version of Falcon 9, the first stage is around the 94% propellant by mass, and with the new design of Falcon 9 we're closer to 96%, maybe 95.5%, and with a slight improvement in ISP. The Merlin architecture is an open cycle architecture, so it doesn't have the ISP advantage of a staged combustion system, and it's using RP-1 so we're talking ISP for the first stage booster engine around 310 to 312 and, for the vacuum version, that's around 340 to 345. The penalty for an open cycle engine is much less in a vacuum than it is at sea level. So that's where we are. So, we definitely need a new engine for any kind of, sending people to Mars kind of stuff, but I think we can still get to full reusability with the current engines despite having a bit of an ISP disadvantage relative to say, the Russian kerosene based engines.
I should have, to be clear, when going through escape, the super-Draco engines on Dragon will generate a minimum of six gees and depending on the scenario that could go up to eight gees. It kinda depends on how much weight you have loaded on and whether you're at altitude or not. The rocket, actually limits the thrust to five gees on ascent. The rocket will actually throttle or shut down engines in a normal scenario to limit the acceleration to five gees. That's set really by the comfort level of the satellites. Five gees is like a nice amusement park ride.
We don't like to talk about our customer's payloads - that's up to them. We respect the privacy of our customers. Direct your question to Bob Bigelow. One thing I should point out though is I think we've got about 46 or so launches on our manifest and, not all of them are actually on the website - almost all of them are, not all - 12 of those are for NASA but the remainder are commercial. "Sometimes people are under the impression that NASA is the vast majority of our business, but actually they're the biggest single customer but they're only about a quarter of our orders."
I don't think anything that's happen will affect the order of flights that will happen next year. I think we'll probably do four flights, that's my best guess, five if we're lucky. One of those flights will be the last of the Falcon 9 version one and we expect to do at least three flights of the upgraded Falcon 9, and we might do a fifth flight, we'll see. We'll certainly have the rockets produced, I feel very confident with that now the rocket production rate is ramping. So we'll have the rockets on the ground, it's just a question of whether the satellites are ready or if there are any other constraints or unexpected things that we encounter, but we'll have the rockets manufactured.
That's a tough one. Once we have better reusability, I think improvements to reusability are going to be pretty important. That's really a fundamental one. I can't think of anything that's on-par with that, short of maybe warp drive. Well, ya know, just focus on SpaceX and Tesla for a while. In fact, I would like to just slightly decrease the amount of time that I work. I think I'll be able to do that when Tesla is cash flow positive which hopefully is quite soon. I definitely do not want to run a third company. I have some ideas.. the Hyperloop, which I think could be cooler than just having another bullet train. Hopefully I'll be able to publish something for that sometime this year. I want to vet it with the teams at SpaceX and Tesla and a few other people, put it out there, and then ask people to contribute ideas and see if there's a better way to deal with - to make it even better - kinda like a wiki version of it or something, and then there can be some collaborative standard design that people think is a good way to go, and then anyone who wants to build it can just build it. I think that'd be great. I think there's a possibility to have a vertical takeoff and landing electric jet, and I think that's where things will eventually end up, it just may take a while to get there.
I'm hopeful that the first human mission to Mars is actually some collaboration of private industry and government, but I think we need to be prepared for the possibility that it has to be just commercial. That may take longer, because it'll require marshaling more resources - well, you have to get the money together to do it. I want to prepare for a scenario where either path is possible. Basically, it needs to happen one way or another. That's the important thing. I'm not dogmatic as to how it occurs, just that it occurs.
I think we'll probably be competitive. Collaboration is difficult because, in a large part, I don't think they want to collaborate and sometimes competition is good. My guess is probably not collaboration but hopefully friendly competition.
We're just focused on the things that I was just talking about, but there will be at some point.
This is using an air breathing engine? When I looked at the numbers it didn't seem too compelling compared to having a slight increase in the size of the first stage. So if you're going to add a whole bunch of complexity, it needs to really pay off and, at least using the numbers I've seen, I have a hard time seeing how it does pay off - but I could be wrong about that. If there is really a big advantage then it would be worth investigating, but it would have to be a big advantage. I would be reluctant to add essentially some sort of jet engine on top of the rocket engine problem.
That's a tricky one. Well, I think it's important to keep in mind that the payload to orbit advantage from an air launch is negligible. I think this audience understands that, but most people don't, because it seems like, well, you're high up there and so surely that's good and you're going at, say, 0.7 or 0.8 Mach and you've got some speed and altitude, you can use a higher expansion ratio on the nozzle, doesn't all that add up to a meaningful improvement in payload to orbit? The answer is no, it does not, unfortunately. It's quite a small improvement. It's maybe a 5% improvement in payload to orbit, something like that, and then you've got this humungous plane to deal with. Which is just like have a stage. From SpaceX's standpoint, would it make more sense to have a gigantic plane or to increase the size of the first stage by five percent? Uhh, I'll take option two. And then, once you get beyond a certain scale, you just can't make the plane big enough. When you drop the vehicle, the rocket, you have the slight problem that you're not going the right direction. If you look at what Orbital Sciences did with Pegasus, they have a delta wing to do the turn maneuver but then you've got this big wing that's added a bunch of mass and you've able to mostly, but not entirely, convert your horizontal velocity into vertical velocity, or mostly vertical velocity, and the net is really not great. So, Orbital, for example, is an interesting example. They started off with the Pegasus as an air launch vehicle and then ultimately did not do any air launch vehicles.
There is definitely some amount of money that has to be spent establishing a base on Mars. Basically, getting the fundamentals in place. Call it the activation costs of a Mars base. That was true also of the English colonies. They really took a significant expense to get things started. You really didn't want to be part of Jamestown, it was not good. It took quite a bit of effort to get the basics established before the subsequent economics made sense. So there is that investment and we'll need to gather the money to do that, but then once there are regular flights, that's right when you need to get the cost down into the half a million dollar range for somebody to move to Mars, because then I think there would be enough people that would buy that - they'd just sell their stuff on Earth and move to Mars - to have it be a reasonable business case. It doesn't need to be many people, there's 7 billion people on Earth, probably reach about 8 billion by the end of the century, and the world on the whole is getting richer, so I think if only even 1 in 10,000 people decide that they want to go that'll be enough, even 1 in 100,000.
In the beginning you'd go with a smaller number of people and you'd have a higher proportion of cargo and emergency equipment and that kind of thing. Once you really got rolling, you'd increase the number of people on the flight because you'd have supplies there. So you wouldn't need to worry about carrying with you all the supplies for the journey there, the stay on the surface and coming back. So initially you start off with maybe a handful of people, less than 10, just trying to give orders of magnitude here, but then you'd go to 100 or more in steady state, down the road.
No. We might hire a few Russians but.. yeah.
I would like to go to Mars, yeah. I want to make sure that things are going well on Earth. Basically, if I die, I want to make sure that things going the way they should. As long as I felt confident of that, then.. yeah.
My answer in respect to Ariane is that, I think, any variant of the Ariane 5 is not going to be competitive with Falcon. So the right move, I think, would be to rethink the architecture of Ariane 6 or - if they want to call it Ariane 6 or something else - but think very carefully about that architecture and make sure it has a chance of beating Falcon otherwise it's kind of a pointless exercise.
I'm not so much about the space elevator. It has sort of a childhood feeling. "I always kind of think of Charlie and the Chocolate Factory when someone mentions the space elevator." The problem with the space elevator is that first we'd need a lot of launches just to get the carbon nanotube rope up there in the first place and then this thing would be anywhere from 40,000 to 60,000 miles long - umm, that's long - and nobody's yet built a little ya know, foot stool, out of carbon nanotubes, as far as I'm aware - so having something that's 40,000 miles long is a big leap, and there's other issues. It ends up being this big sweeper going through Earth orbit and any orbital debris is going to be really good at catching and it's going to be very high impact. And once you get to the end of the elevator, you've gotta do something otherwise you'll be flung out into space, so you still need rockets. So really all the space elevator would be is a means of reducing the cost of transporting propellant to orbit. In that way, it might work as a long term optimization, not anything worth working on right now.
In terms of crew, we expect to be ready to fly our first crew mission in about three years. "Technically, if somebody were to stow aboard the cargo version of Dragon, they'd actually be fine. I mean, hopefully." If it came back, they'd be fine. In the pressurized volume we actually maintain sea level pressure, we maintain humidity, we maintain the temperature very precisely because we're trying to transport experiments that have plants and mice and fish and that kind of thing, to orbit and back. So, you could certainly stow away, and do it, but in order for it to be really safe enough we want to establish a standard of safety beyond the space shuttle and anything else prior. You really want to have a launch escape capability, and you want to have lots of flights under the belt, and tested without anyone on-board before putting people on-board. The long lead for Dragon version two is the testing of the launch escape system, and that's what drives the three year time frame.
Well, I really liked sci-fi when I was a kid, and, I'm not sure, I mean, there's many forms of inspiration, I really like Asimov books and Heinlein books, and Arthur C. Clark, and all the other stuff, Star Trek, Star Wars, Battlestar Galactica. From an inspiration standpoint... having read all those books and seen all the movies, and many other books and movies, just the idea of having a future where that didn't come true, just seemed terrible. So that's my inspiration.
"We're happy to take people the Moon. If somebody wants to go to the Moon, we can definitely do it." But as far as making life multi-planetary, you know, tautologically one must have a second planet and the Moon, it's a small rock orbiting the Earth with no atmosphere, 28 day period, very little water, lacking in a lot of the key elements one needs for creating a civilization. It's analogous, I think, to the arctic. The arctic is close to Britain but, it kinda sucks over there, and so, that's why America is not there, and it's where it is. Even though it's a lot harder to cross the Atlantic than it is - I mean, from Norway you can practically row to the arctic, in fact I think they did. So, it's really because it's the place where one can establish a self-sustaining civilization and really grow to something significant - really big - and in a worst case scenario, if something were to happen to Earth, you have redundancy. Whereas, that would be much harder to do on the Moon and plus, if something calamitous has just happened on Earth, it is very close, so it might affect the Moon too.
it'd actually be harder to travel to the asteroid belt than it would be to travel to Mars. So, if you're talking about people coming from Earth, it's going to be easier to go to Mars. Having the atmosphere, you can use atmospheric breaking as well, and you just have an enormous number of resources on Mars. Mars is like, it's not perfect, but it's pretty good. It's got a 24.5 hour rotational period. It's got a CO2 atmosphere, which means if you just had a transparent dome and pump, you could actually grow Earth plants in martian soil. In fact, it's recently turned out that martian soil is non-toxic so you could actually grow Earth plants in martian soil just by heating it up and pressurizing it with CO2 - you need a little fertilizer, but Mars actually has 2.7% nitrogen in the atmosphere which means that you can synthesize fertilizer as well. So yeah, it's a pretty good option. In fact, it's the only option, I think.
I'm sure it'll make it more awesome to be a human. I think it'll be really great. I think that would make for a very exciting future. We start off by establishing on Mars and eventually spread out to the rest of the solar system and start sending ships to other star systems. Once we've got a large base on Mars, and a lot of travel between the planets, that's a great forcing function for the improvement of space transport technology. I think we'll see rapid improvement and all sorts of inventions that we just can't envision today.
Forecasts are always tricky. If you asked somebody at the dawn of air flight, what are your market forecasts? I mean, they're going to be wildly wrong. Probably on the low side. Even probably the most optimistic people at the beginning of aviation would seem like pessimists today.
Hey, I think liquid fueled rockets are interesting. Throw me a bone. I think, for interplanetary transport, having high efficiency high thrust ion drives could be helpful. I think that's something you'd want to do anyway, because if you have a big spacecraft with a lot of excess power generation, you might as well strap an ion drive to that. So then there's a question of how efficient can you convert power to thrust, so that's one thing. Then potentially something like an electric-magnetic sail would be cool. Yeah I think that would be kinda neat. On the nuclear side, I think that's tough. It's really tough taking up a lot of nuclear fuel in a rocket. People have a hard time with establishing nuclear power stations, how would you like one that's flying over your head and might crash? I mean, we all might think that's a good idea, but we're in the minority.
No. I didn't know that.
I think vertical integration is sensible. You just need to look at it and say, okay, if we made it ourselves, how much would it cost and if someone else made it, how much would it cost, and then go with the one that is more efficient. I mean, that's really how we operate. That's resulted in, I don't know, 70 % depending on how you count it, by mass or by quantity, 70 % of the rocket is built from raw material at SpaceX. Actually, we'd like to do less. It's not as though we want to do it all. If we could find more efficient suppliers we would be able to offload some of that stuff.
Well, I feel reasonably good about things, but I don't want to be complacent. We definitely want to keep the pace of the technology progression as rapid as possible. We want to do lots of launches, which are kind of our bread and butter, and then keep pushing the envelope in parallel on new technology.
No. We actually file flight plans. When we file a flight plan we file a flight plan with zero, one and two engines out. So it wasn't even considered, from the Air Force and FAA standpoint, it wasn't actually considered an anomaly because it was one of the prescribed flight plans. It was considered an anomaly but not a failure, sorry.
Well, I think they're getting smaller and bigger. On the small side you've got companies like Surrey, which I used to be an investor in until it was acquired, and I certainly like what they're doing in small satellites. And then, on the big side, you've got the big geosynchronous satellites where, particularly for places that have a limited number of geostationary spots, they actually want the satellite to be as big as possible. So I think you've got this bifurcation going on to both big and to small but probably with fewer medium.
I think as long as we're making revolutionary improvements in space transport, I think there is room for a lot of companies. But we really need to get to rapid, and completely reusable rockets. Just as is the case with aircraft. I mean, aircraft are rapid and completely reusable. They have a maintenance cycle and everything, but basically you can put fuel in and fly it again. You can land a 747 and takeoff in an hour and a half later, and you should be able to do that with rockets too, and if you can do that, the costs will come down so dramatically that we could find many uses for rockets.
That's definitely not one of our main initiatives, and I think there's likely to be some changes in that program, but nothing I could comment on myself.
"You've gotta.. you show a little leg, but not all of it."
The Grasshopper is kind of a test rig and it's intended to help us develop a vertical landing capability. Obviously, the rocket can certainly takeoff vertically, now we need to make them land. Grasshopper has very robust landing legs. It's designed to be able to take very off-nominal landings. It's got a Falcon 9 version 1 stage, combined with the Merlin-1D engine that we've got on the next generation Falcon 9. So it's sort of a hybrid vehicle of past and future technologies. We'll use it to sort of figure out a bunch of things and then next year we'll upgrade to the actual flight design of Falcon 9, the next generation of Falcon 9.
Our long term goal is to recover the entire rocket, and be able to relaunch the whole thing quickly.
Our rockets are standing by. I think there's potentially some market for mining asteroids as kind of a refueling station on the way to Mars and other places. I'm not convinced there's a case for taking something, say, platinum, that is found in an asteroid and bringing it back to Earth.
Don't know it well enough. In the past, whenever I've done the basic math on an air breathing stage, it doesn't seem to make sense, but I could be wrong about that and I always look to figure out how I can better understand things. I think it's maybe easier to just increase the size of the boost stage than to add an air breathing stage.
There's no real work going on now in terms of designing Mars habitats. I think we need to focus our energies on designing the Mars spaceship first, and then that would effectively be the first habitat.
I'm hopeful that, from a SpaceX standpoint, we'll be ready to do such a mission in the 10 to 15 year time frame. So we'll see if that occurs. It may or may not be a government. There may be some government involvement or none and I don't know quite yet but I think SpaceX will be ready at approximately the time we intend to be.
In 2013, I'm hopeful we'll be able to demonstrate high altitude supersonic liftoff and return. So, it's being able to have the stage takeoff, go supersonic, and then come back and land propulsively at the launch site. Then, I hope we will also demonstrate the Falcon Heavy towards the end of next year and it will be the most powerful vehicle in the world by a factor of two. More than a factor of two actually. Yeah, so 2013 should be an exciting year.
It's quite difficult for us to employ people who don't have a green card because of US ITAR rules. So, my first advice would be, do anything you can to get a green card. We have been successful in a few cases with getting permission from the US state department, defense department, to appoint non-US citizens but it's very difficult to do that. Unfortunately. I wish it were easy.
I've always been into science fiction movies and books, and I always thought that we were on our way to becoming a spacefaring civilization, just to be like the stories that I would read about, and then I was disappointed to learn that it didn't seem to be happening. That's when I got into.. that's why I started SpaceX, to make that a reality and not just be forever a fiction.
Well, certainly, we're very determined to succeed and fortunately we had just enough money to make it to the fourth launch which was the one that worked. Thank goodness. "I think we had a critical mass of technical talent and just enough money and a design that was sensible and those were probably the three ingredients that resulted in success eventually."
I split my time approximately evenly between the two companies, although depending upon which company needs me the most I might allocate a bit more time to that company at times. So, right now, I've got a majority of my time on Tesla but earlier this year was a majority of my time on SpaceX.
"I think NASA is actually doing a pretty good job overall." I mean, they've been very pro-commercial-space and I have really nothing but good things to say about what NASA is doing.
Nice try.
Oh, fictional spacecraft. Well, you know, I'd have to say that would be the one in The Hitchhiker's Guide To The Galaxy that's powered by the Improbability Drive. I mean, that thing's awesome. It does the most unexpected things.
Alright, thank you.
Alright, this was when I was six, so the memory is a little fuzzy at this point but, as I recall, I was grounded for some reason, I don't know why, but I felt it was unjust, and I really wanted to go to my cousin's party, who was five - so it was a kid's party. At first I was going to take my bike, and I told my mum this, which was a mistake. She told me some story about how you needed a license for a bike and the police would stop me. I wasn't 100% sure if that was true or not, but I thought I better walk, just in case. I sort of thought I knew the way, but it was clear across town, so I was 10 or 12 miles away, it's really quite far. Further than I realized actually. So I just started walking to my cousin's house. I think it took me about four hours. Just as my mum was leaving that party with my brother and sister she saw me walking down the road and freaked out. I saw she saw me, so I then sprinted to my cousin's house and I was just about two blocks away and I climbed a tree and refused to come down.
When I was about ten I walked into a computer store in South Africa and saw an actual computer. I'd previously had some sort of early precursors to the Atari system and then I got the Atari system, which I'm sure a lot of people here have played, but then I saw actually having a computer where you could make your own games, and it was a Commodore VIC-20. So that was the first computer I bought, and I got some books on how to teach yourself programming, and this was like the coolest thing I'd ever seen. So I was just like, this is super awesome. So I started programming games and then selling games in order to actually buy more games - a bit of a circular thing - more games and better computers and that sort of thing. Yeah. Basically I'd spend money on better computers and Dungeons And Dragons modules and stuff like that. Nerdmaster 3000 basically.
I did like the comic Ironman, yeah. [Question about being inspiration for the movie version.] I did not. That was pretty - I would have said, 0% chance. [What kind of kid were you?] I wasn't that much of a loner, at least not willingly, but I certainly was quite - I was very bookish, I was reading all the time. I was either reading, working on my computer, reading comics, playing Dungeons And Dragons, that kind of thing. I guess when I was around 12 or 13, I came to an existential crisis and I was reading various books trying to figure out the meaning of life and what does it all mean? Cause it all seemed quite meaningless. We happened to have some books by Niche and Schopenhauer in the house, which you should not read at age 14, it's bad. It's really negative. But then I read Hitchhiker's Guide To The Galaxy which is quite positive I think and it sort of highlighted an important point which is that a lot times the question is harder than the answer, and if you can properly phrase the question, then the answer is the easy part. So, to the degree that we can understand the universe, then we can better know what questions to ask and then whatever the question is that best approximates 'What's the meaning of life?', you know, that's the question that we could ultimately get closer to understanding, and so I thought well, to the degree that we can expand the scope and scale of consciousness and human knowledge, then that would be a good thing. [When were you having these deep thoughts?] Puberty I guess - 13 through 15, probably the most traumatic years.
I don't know. I guess he was fairly established, he was an engineer established in South Africa and didn't want to have to go through that again in another country. So yeah, I actually got - my mother was born in Canada and her father was American but unfortunately, she didn't get her American citizenship so that broke the link and I couldn't get my American citizenship but she was born in Canada, so, I could get - I actually filled out the forms for her and got her Canadian passport and me too, and within three weeks of getting my Canadian passport I was in Canada. I was in Canada for a few years at Queen's University and got a scholarship to go down to University of Pennsylvanian because one of the downsides of coming to a university in North America was that my parents said they would not pay for college - or, my father said he would not pay for college unless it was in South Africa. So, I could have free college in South Africa or find someone to pay it here and fortunately I got a scholarship at U-Penn and so I did a dual undergraduate in business and physics at U-Penn.
I think I was thinking about it for a few years, during freshman and sophomore year at Queen's and then also at U-Penn and I was trying to think, what would most influence the future, what are the problems we have to solve, and I actually talked a lot to friends and my housemates and that sort of thing, and dates - which was probably not the best thing. I actually met a woman I dated briefly in college who now works at Scientific American as a writer and she related the anecdote that when we went on a date, all I was talking about was electric cars. That was not a winning conversation. She said the first question I asked her was: do you ever think about electric cars? She said no, she never did. That wasn't great, but recently it's been more effective.
I was at Penn and there was a professor who was chairman of a company in Silicon Valley who was working on advanced capacitors potentially for use in electric cars. As it turns out they're way too expensive. I thought, well, this is really awesome. I asked if I could get a summer job because it was in Silicon Valley and working on technology for electric cars. I thought, well, that's pretty much as good as it gets. So, I got a summer job here - it was in Los Gatos actually, at Pinnacle Research during electrolytic ultra-capacitors. The problem was that they use ruthenium tetroxide and there was, I think, only a few tons of ruthenium mined in the world, so not very scalable. You know, they'd sell it to you by the milligram. That's seen as a problem. But it had a pretty high energy density, roughly equivalent to lead-acid battery, which for a capacitor is huge.
Then I thought, well, Stanford is in Silicon Valley, it's sort of the epicenter, so that's where I wanted to come. Near Stanford or Berkley and Stanford is sort of sunnier, so I liked it. This was the summer of '95 and I'd been working on some Internet software because the three things that I thought would affect the world were Internet, sustainable energy and space exploration - making like multi-planetary, but on the Internet thing, I just couldn't figure out how to make enough money to feed myself. If I couldn't make money then I'd run out of food and die. That was not good. If I was a student then, I could be a teaching assistant and do various things and do research on electric vehicle technologies - that was my default plan - but I also thought that if I did a PhD at Stanford then I would spend several years watching the Internet go through this incredibly rapid growth phase and that would be really difficult to handle - so I really wanted to be doing something. It really seemed like things were going to take off, although nobody had made any money in Internet at the time. In '95, really, no-one was making any money in the Internet. In fact, even on Sand Hill Road people were like, what's the Internet? Amazingly, when we tried to get funding for a company in, I think it was, November of '95, more than half of the venture capitalists did not know what the Internet was and had not used it. Yeah, they'd literally ask, isn't that something that the government and universities use? And I'd be like, uhh, for now.
But then, Netscape went public in late 1995, I think it was, and then after that even a lot venture capitalists still didn't understand it, and still hadn't used it. Somebody had made money on it, so the second time we went to get funding, everyone was interested. [This was Zip2?] That's right. Funny name. We were just incredibly stupid at the time, I think. That's the main reason for that name. We thought, we don't know anything about names, so we'll get some ad agencies to suggest a bunch of options and then Zip2, seemed kind of speedy. I don't know why the hell we chose that stupid name, and it has a digit in it. Why would you chose - it could be ZipTo, it could be ZipTwo, it could be ZipToo, so people literally spelt the name every variation - which is bad if you've got a url and you don't have the other ones. Zip2 started off as, basically, like I said, we're trying to figure out how to make enough money to exist as a company and so, as there wasn't really any advertising money being made, we thought we could help existing companies get online - bring their stuff online - so we developed software that helped bring a lot of the newspapers and media companies online. A lot of them just didn't know what the Internet was and even the ones that were aware of the Internet didn't have a software team, so they weren't very good at developing functionality. We had as investors and customers: The New York Times company, Nightrider, Herst, and so we were able to get them to pay us to develop software for them to bring them online publishing stuff. We did maps and directions and yellow pages and white pages and various other things. We developed quite sophisticated technology, actually, but it wasn't actually being employed super well by the media companies. We would suggest ways to use it and then it would not be used as effectively as it could be. It was very frustrating.
That's right. Compaq had Altavista, so their thought was to combine Altavista and a bunch of other technology companies and see if that would work, which it did not. None the less, they were pretty nice guys and bought the company and that gave me the capital to do another company. I wanted to do another company with Internet because I thought we hadn't really reached the potential that we could have with Zip2. We had really sophisticated software.. our software was at least comparable to what Yahoo or Excite or others had. In fact, I thought in some ways it was better, but because it was all filtered through these partners it wasn't getting properly used. So I thought, I want to do something that can be a more significant contribution to the Internet and so the initial thought was financial services because money is digital, it's low bandwidth, at the time there was - you know, most people were on slow modems, because this was late '98, early '99.
Yeah, it worked out better than we expected. Initially, Confinity and X.com started out from slightly different directions and converged to the same point. With X, the thought was to create an integrated set of financial services, so you could go to one place and do any financial thing and then, as a feature, we had the ability to transfer money or securities or anything, simply by entering a unique identifier - so, like, an email address or a phone number or something like that - but when we'd demo the system, the hard stuff - which was the integration of all the financial services - people would not be interested in, but they'd be real interested in being able to transfer money using an email address. That was actually quite easy, and so we focused our energy on that. Although it's easy in principle, what gets really hard is adding security while still keeping it easy to use. It's like the Willy Loman quote, why do you rob banks, because that's where the money is. Why do people rob Paypal? Same reason. You can dial up the security to a really high level but then you're going to make it very hard to use. That was one of the toughest things we wrestled with. Then, Confinity originally started as software for Palm Pilots and they had a demonstration application with the ability to beam money from one Palm Pilot to another using the infrared port. Yeah, if people remember that one. That was big at one point. They had a website, sort of parallel to that, where - because, once you'd beamed the infrared tokens you had to still then synchronize your Palm Pilot and do the transfer via the website. Then people weren't so interested in the Palm Pilot stuff, but they were interested in the website, so we kind of converged to the same point, and were quite close together so we decided to merge the companies and, in, I think, January or so 2000 - it was a very turbulent period. The growth in the company was pretty crazy. At the end of the first 4 or 5 weeks, we had 100,000 customers.
We definitely did not, and it wasn't all good because we had some bugs in the software and, ya know, even if the bug only occurs 1 in 1000 times, it's still 100 very angry customers - where's my money? That would be a reasonable concern that people would have. We had customer service on University Avenue in Palo Alto. There were five people. So, when something went wrong, customer service phones would basically explode. We had many challenges and then the various financial regulatory agencies were trying to shut us down. Visa and Mastercard were trying to shut us down. E-bay was trying to shut us down. FTC was trying to shut us down. There were a lot of battles there. It was a close call. We definitely became very close to dying there in 2000 and 2001. I think we had a really talented group of people at Paypal and a lot of people have actually gone on to start many other companies - Youtube, Linked-In, Yelp, Yammer, it's quite a long list actually.
No, not really. I did take a bit of time off. I did reasonably well from Paypal. I was the largest shareholder in the company and we were acquired for about a billion and a half in stock and then the stock doubled. So yeah, I did reasonably well, but "the idea of lying on a beach as my main thing, just sounds like the worst - it sounds horrible to me. I would go bonkers. I would have to be on serious drugs." I'd be super-duper bored. I like high intensity - I mean, I like going to the beach for a short period of time, but not much longer than a few days or something like that.
When I was thinking about what would affect the world, as a student, it wasn't really from the standpoint of those are the things I'll get involved in - it was kinda more in the abstract, of these are the things that I think will happen that will affect the world, but not that I will be involved in them. As it turns out I have, but I always thought that we would make much more progress in space, and it just didn't happen. It's really disappointing. I was really quite bothered by it. When we went to the Moon, we were supposed to have a base on the Moon. We were supposed to send people to Mars, and that stuff, it just didn't happen. It's as if we went backwards. We got the Space Shuttle but the Space Shuttle could only go to low Earth orbit, whereas a Saturn V could go to the Moon. Now the Space Shuttle's gone and so, that just seemed like a really bad thing. So I thought, well, maybe it was a question of there not being enough attention or will to do this, but this was a wrong assumption, but that's the reason for the greenhouse idea.. the thought was, if there could be a small philanthropic mission to Mars.. so, I was expecting to lose all the money that I invested in that.. but if we could send a small greenhouse to the surface of Mars will seeds in dehydrated nutrient gel to be hydrated upon landing, you'd have this great shot of a little greenhouse with little green plants on a red background. I thought that would get people excited. You've gotta sort of imagine the money shot, if you will. So yeah, I think green plants on red background would be not bad, and people tend to get interested and excited about precedents and superlatives. So this would be the furtherest that life's ever traveled, the first life on Mars, as far as we know, and I thought, well, maybe that would result in a bigger budget for NASA and then we could resume the journey. That was the basic idea. I spent several months on this, actually, and went to Russia, three times. I was able to figure out how to get the cost of the spacecraft low and the communications and the greenhouse and all that, down to a reasonable number - reasonable meaning several million dollars.
They just thought I was crazy, but that's not good either if you're buying ICBMs. Minus the nuke, I think that would have been a lot more. I slightly got the feeling that that was on the table, which is very alarming, but yeah, those were very weird meetings with the Russian military and what-not. I think they thought that I was a bit crazy but then they read about Paypal so they thought, okay, he's crazy but he's got money, so importantly I could pay on-time. Remarkably capitalist, was my impression.
I came to the conclusion that my initial premise was wrong. In fact, there's a great deal of will, there's not such a shortage, but people don't think there's a way. If people thought there was a way, or at least something that wouldn't break the federal budget, then people would support it. Which, in retrospect, I think is actually kind of obvious because the United States is a distillation of the human spirit of exploration. People came here from other places. There's no nation which is more a nation of explorers than the United States, but people need to believe that it's possible and they're not going to have to give up something like healthcare or something that's important. That's important. So, I thought, well then, it's not a question of will, it's a question of showing that there's a way and I started reading quite a bit about rockets to try to understand why they're so friggin' expensive. Where does the $60M go for the Delta II and now I think a Delta II is now $100M or something even, some crazy number, and that's a relatively small rocket. So if you go to one of the bigger rockets it's nearer from $200M to $400M. Anyway, I came to the conclusion that there wasn't really a good reason for rockets to be so expensive, and they could be a lot less. Even in expendable format they could be less and if one could make them reusable, like airplanes, then the cost of rocketry would drop dramatically - cost of space travel would drop dramatically. The cost of the fuel was maybe anywhere from 0.2% to 0.5% of the cost of the rocket. It's kind of like a plane. How much is the cost of the fuel in the plane vs the cost of the plane itself? It's at least a two order of magnitude difference. But nobody had really been able to make a reusable rocket work. So I thought that, okay, if we can do that, then that would really be the key breakthrough for space travel. So far we have not succeeded, I should point out.
I think failure is bad. I don't think it's good, but if something is important enough then you do it even though the risk of failure is high. My advice, if someone wants to start a company, is they should bare in mind that the most likely outcome is that it's not going to work and they should reconcile themselves to that strong possibility. They should only do it if they feel that they are really compelled to do it. The way starting a company works is, usually at the very beginning it's kind of fun and then it's really hellish for a number of years. Yeah, there's a friend of mine who's a successful entrepreneur and started his career around the same time as I did and he has a good phrase - his name's Billy - he said, yeah, starting a company is like eating glass and staring into the abyss. That's generally true, and if you don't eat the glass, you're not going to be successful.
Like I said, my interest in electric vehicles goes back a long time - goes back 20 plus years. In fact, the original reason I came to Silicon Valley was work on electric vehicle energy storage technology. I thought that big car companies would develop electric cars because obviously it's the right move, and I thought that was vindicated when General Motors was doing their EV-1 and Toyota did the electric Rav-4, the original one, and they made those announcements and then brought those to market. I thought, okay, this is great, we're going to have electric cars. GM is obviously going to do the EV-2 and 3 and they'll just keep getting better and everything will be cool. When California relaxed its regulations on electric cars, GM recalled all the of the EV-1s and crushed them into little cubes, which seemed kind of nutty. In fact, the people didn't want their EV-1s recalled. They tried court orders to stop the cars from being recalled. They held a candle lit vigil, okay, at the yard where the cars were crushed. I did not attend, but I was moved by it. It's crazy - I mean, when was the last time you heard about any company's customers holding a candle lit vigil for the demise of that product. Particularly a GM product. I mean, what bigger wake-up call do you need? It's like, hello, the customers are really upset about this. They'd really prefer it if it didn't get recalled. That kind of blew my mind. So I was like wow, okay. Then we had the advent of lithium-ion batteries which really - that's one of the key things to making electric cars work - and still nothing.
So, in 2003, I had lunch with one of the other co-founders of the company, Jeffrey Straubel who was actually working on, I think, a hydrogen airplane or something, and he mentioned to me the T-Zero car that was done by AC Propulsion. They had some of the guys, I think, who had been on the EV-1 program and they took a gasoline sports car, kind of a kit car, and outfitted it with lithium-ion batteries, sort of consumer grade cells, and they created a car which was essentially the precursor of the Roadster. In fact, it had very similar specifications: sub-four second 0 to 60 miles per hour, 250 mile range, and also two seater sports car, but it was quite primitive. It didn't have a roof, for one thing, at all. In fact, I don't know if it had doors. It didn't have any safety systems, no airbags, it wasn't homologated - so you couldn't sell it. So, in order to create a commercial version of the car, something we could actually produce and sell to people, there was a fair bit of work that was required. I kept trying to get AC Propulsion to commercialize the T-Zero and I said, look, I'll fund the whole effort, you really need to do this, and they just sort of refused to do it. They didn't want to do it. They wanted to make like an electric Scion. Which, in principle sounds good, but it would have cost $75,000 and no-one wants to buy a $75,000 Scion. The technology was just not ready - there was just no way to make a good value-for-money proposition with something like a Scion.
Well, I really didn't want to be CEO of two companies. I tried really hard not to be, actually. Ac Propulsion finally said okay. I actually told AC Propulsion, look, if you're not going to do this, I'm going to create a company to do this and they said, well, there's some other guys who are also interested in doing that, and you guys should combine efforts and create a company and that's basically how Tesla came together. Then we had a lot of drama. Since I provided, like, 95% of the money I could have been the CEO from day one, but the idea of being CEO of two startups at the same time was not appealing and shouldn't be appealing, btw, if anyone is thinking that's a good idea. It's a really terrible idea.
If you're going to have an epiphany to start a company, it'll probably be a Burning Man. Solar City is part of the whole sustainable energy thing. You have to have sustainable means of producing and consuming energy. So, even if you have electric cars, you have to have the other side of the equation. So, how do you produce energy in a sustainable way and I think solar is the primary means of sustainable energy generation. In fact, the Earth is almost entirely solar powered today. The only reason we're not a frozen ice ball at 3 degrees Kelvin is because of the sun. The sun is responsible for all precipitation. It's responsible for the vast majority of the ecosystem, apart from chemotrobes at the bottom of the ocean. So, there's just a tiny amount of energy that people consume to power civilization. It's actually a very tiny amount of energy relative to the amount of energy that the sun sends in our general direction. To deal with that, we could, in fact, power the entire world with solar power. Quite easily.
Oh no, I knew that long ago. I knew that in college. I wouldn't say it was a particular epiphany, it was more that I was at Burning Man with two of my cousins, Lyndon and Peter Rive who are awesome guys, and they were trying to think what should they do after their first startup. They did a company called Everydream which did large scale management of computers. If you're got like 60,000 computers it's kind of hard to manage them, so they created software that allows companies to do that. That company actually got sold to Dell. I wouldn't say they were looking for new ideas. I was actually trying to convince them that they should do solar because I just thought it was an area that needed people like them - really good entrepreneurs - and since I was somewhat over-committed, I thought, well look, if you guys will do a solar company, I'll provide all the funding and whatever guidance or help I can provide. I'd do that. I thought it was really important that there'd be good entrepreneurs like them in solar because it just wasn't doing very well as an industry. I thought people weren't focusing on the right problem. Everybody thought that the panel was the problem but actually - it's a problem, but it's not the most important problem. The panel is somewhat commoditized at this point. "Making standard efficiency solar panels is about as hard as making dry wall. It's really easy. In fact, I'd say dry wall's probably harder." What is a thorny problem is trying to figure out how to get solar on tens of thousands, eventually hundreds of thousands, of rooftops. It's kind of like you've got to re-roof millions of buildings and then figure out how the grid interconnects work and then manage all those systems. If you've got hundreds of thousands or maybe millions of systems, eventually, you've got to manage all these distributed systems. You've got this really complex distributed utility, essentially. Which I think actually plays to their prior strength in creating really scalable software for managing hundreds of thousands of computers in a distributed fashion. That's kinda what they did and an awesome job. I'd basically show up at the board meetings to hear, what's the good news this time? We had, like, maybe a few bad board meetings - well, late 2008 there was some bad board meetings but, for the most part, apart from a few times when the macroeconomic conditions were really terrible, they just did an amazing job with almost no help from me. Yeah, they deserve the vast majority of the credit for the success of that company.
Yeah. I think someone else is doing that.
Well, you can argue with them, but not with great success. You can actually get these things changed but it takes ages. One of the things we're trying to get is - like, why should you have side mirrors if you can have say, little tiny video cameras and have them display an image inside the car? But there are all these regulations saying that you have to have side mirrors. I went and met with the secretary of transport, like, can you change this regulation? Still nothing has happened. That was like two years ago. It's not easy to get these regulations changed.
Well, I think, actually, I think the reality of being President is that you're actually the captain of a very huge ship and have a very small rudder. Obviously, if there was a button that a President could press that said economic prosperity, he'd be hitting that button real fast. You could measure the speed of light by how fast they press that button, because that's called the reelection button. So I'm not sure how much the President can really do, but you know, I'm generally a fan of minimal government interference in the economy. The government should be like, the referee but not like, the player, and there shouldn't be too many referees. There is an exception which is when there's an unpriced externality, such as the CO2 capacity of the oceans and atmosphere. When you have an unpriced externality then the normal market mechanisms do not work and then it's government role to intervene in a way that's sensible, and the best way to intervene is to assign a proper price to whatever the common good is that's being consumed. There should be a tax on carbon. You know, if the bad thing is carbon accumulation in the atmosphere then there needs to be a tax on that. Then you can get rid of all subsidies and everything else. "It seems logical that you should tax things that are most likely to be bad rather than - like, that's why we tax cigarettes and alcohol, because those are probably bad for you." Certainly cigarettes are. So, you want to err on the side of taxing things that are probably bad and not tax things that are good. So I think, given that there is a need to gather tax to pay for the federal government, we should shift the tax burden to bad things and then adjust that tax on the bad things according to whatever is going to result in the behavior that we think is beneficial for the future. I think currently, what we're doing right now, which is mining and burning trillions of tons of hydrocarbons, that used to be buried very deep underground and now we're sinking them into the atmosphere and running this chemical experiment on the atmosphere and then you've got the oil and gas companies which have ungodly amounts of money and you can't expect them to just roll over and die. Like, they don't do that. Actually, what they'd much prefer to do is spend enormous amounts of money lobbying and running bogus ad campaigns and that sort of thing, to preserve their situation. It's a lot like tobacco companies in the old days. I mean, they used to run these ads with doctors, or like a guy pretending he's a doctor, essentially implying that smoking is good for you and like, having pregnant mothers on ads smoking.
As far as climate change skeptics, I believe in the scientific method and one should have a healthy skepticism of things in general and first thing from a scientific standpoint is that you always look at things probabilistically, not definitively, and so, a lot of times, if someone is a skeptic in the scientific community what they're really saying is that they're not sure that it's 100% certain that this is the case, but that's not the point. The point is to look at it from the other side. What do you think the percentage chance is of this being catastrophic for some meaningful percentage of the Earth's population? Is it greater than 1%? Is it even 1%? If it is even 1%, why are we running this experiment? We're playing Russian roulette and as each year goes by we're loading more rounds in the chamber. It's not wise. What makes it super insane is that we're going to run out of oil anyway. It's not like there's some infinite oil supply. We're going to run out it. So we know, we have to get to a sustainable means of transportation, no matter what, so why even run the experiment? It's the world's dumbest experiment.
Well, he's certainly someone I've admired. Although I did try to talk to him once at a party and he was super rude to me, but I don't think it was me. I think it was, sort of, you know I'm not the first. I was actually there - ya know, Larry Page is an old friend of mine. I've known Larry since before he got venture funding for Google, and Larry was the guy that introduced me to Steve Jobs. So it's not as like I'm going tugging on his coat like, ya know, please talk to me. Being introduced by Larry Page is not bad. Obviously he was an incredible guy and made fantastic products that, ya know, I don't know. There was a certain - the guy had a certain magic about him. That was really inspiring. I think that's really great. I think Steve Jobs was way cooler than I am.
I do actually. Sounds wrong but yeah, I do. Not to mention the Burning Man epiphanies. Those are huge. There are sometimes, like, late at night, if I've been thinking about something and I can't sleep, I'll be up for several hours pacing around the house thinking about things. Occasionally I'll sketch something or send myself an email or something like that.
Yeah, that was weird. That was kind of troubling because growing up Neil Armstrong was kind of a hero. Like, it kind of sucks. That's a bit of a blow, but I think in his case he was somewhat manipulated by other interests. I don't think he quite new what he was saying in those congressional hearings.
Well, if you think about a company, a company is a group of people that are organized to create a product or service. That's what a company is. So, in order to create such a thing, you have to convince others to join you in your effort and so they have to be convinced that it's a sensible thing, that there's at least some reasonable chance of success, and that if there is success the reward will be commensurate with the effort involved. I think getting people to believe in what you're doing, and you, is important. In the beginning, there will be few people who believe in you, or what you're doing, but then over time, as you make progress, the evidence will build and more and more people will believe in what you're doing. I think it's a good idea, when creating a company, to have a demonstration or, if it's a product, to have like a good mockup, or even if it's software to have good demoware or to be able to sketch something, so people can really envision what it's about. Try to get to that point as soon as possible and then iterate to make it as real as possible as fast as possible, if that makes sense.
Having a smartphone is incredibly helpful because that means you can do email during inter-social periods - you're in a car, in the bathroom, walking everywhere. You can do email, practically, whenever you're awake. That's really helpful, to have email for SpaceX and Tesla integrated on my phone. Then you have to apply a lot of hours to actual working. The way I generally do it is I'll be working at SpaceX on Monday and then Monday night fly to the bay area. Then Tuesday and Wednesday at the bay area, at Tesla and then fly back on Wednesday night and then Thursday and Friday at SpaceX. In the last several months I would fly back here on Saturday and either spend Saturday and Sunday at Tesla or spend Saturday at Tesla and Sunday at SpaceX.
Well, I think if they're inclined to.. I mean, if they're really interested in working at Tesla or SpaceX then I'd help them do that. I'm not sure I'd want to, necessarily, try to insert them into the CEO role at some point, ya know. It's sort of like, if the rest of the team and the board felt that they were the right person then that would be fine but I wouldn't like people to fell like I'd installed my kid there. I don't think that'd be good for either the companies or the kid, really. I was, at one point, of the school of thought that it's best to give away 99% of one's assets - kind of like the Buffet school of thought - I'm still mostly inclined in that direction, but after seeing what happened with Ford and GM and Chrysler where GM and Chrysler went bankrupt but Ford did not, and Ford seemed to make better long term choices than the other two companies, and that's in-part because of the influence of the Ford family, and I thought, well, maybe there is some merit in having some longer term family ownership. At least a portion of it, so it acts as a positive influence. I mean, this is something I'm still thinking about, but acting as a positive influence in the long term, so the company does proper long term things. Look at what happened, also, in Silicon Valley with HP and I think it's quite sad, and that is to some degree because there was much diminished influence by the Hewett and Packard families. I think they should have prevailed when they were opposed to the merger that took place at one point and I think they were right, actually.
No, there's no IPO planned. Running a public company does have it's drawbacks. In the case of Tesla and Solar City, we had to raise capital and we had kind of a complex equity structure that needed to be resolved by going public and I thought we kinda needed to do that in those two cases. We don't have to do that at SpaceX. I think there's a good chance that we will at some point in the future, but SpaceX's objectives are super long term and the market is not. So, I'm a bit worried that if we did go public too soon that market pressure would force us to do short term things and abandon long term projects. Going to Mars is very long term.
Yes, ironically, the solar industry does not have a lot of that.
Actually, I was asked by a journalist, 'Do you want to die on Mars?' and I said 'Yes!' and I was like, but wait, not on impact, just to be clear. That's one of the possibilities. I guess I'd like to be able to go to Mars while I'm still able to manage the journey reasonably well. So I think I don't want to be like 75 and go to Mars. At least in the beginning, it could be mildly arduous, so I'd like to get there ideally in my 50s, that would be kind of cool. I aspire to make that happen, and I can see the potential for that happening and I'm not saying it will happen but I think it can happen. I'll try to make it happen.
The reason for SpaceX is I think we need to become a multi-planet species and we were clearly not getting there based on the progress in the space industry and so I started SpaceX to try to solve that problem. That's the overall aspiration. Yeah. If we are not a multi-planet species then the likely probable lifespan of humanity is much less. Plus, it's going to be much more boring, I think. [You're not just trying to service the ISS.] Right, absolutely, that's just the appetizer.
It was very nerve wracking, the first flight to the space station. It was the third flight of our Falcon 9 rocket, so I wasn't perhaps as worried about that, and we had flown our Dragon spacecraft and maneuvered around and reentered, so I knew that the basic spacecraft functionality worked, but we had not tested the proximity operations and berthing system, and there was a bunch of upgrades to the avionics. We went from being mostly single fault tolerant to being - often no fault tolerant to being too fault tolerant. So it's quite a big increase in the complexity of the avionics software. We also added solar arrays and a radiator. Yeah. [You can't test that on Earth.] Right, you can sort of try to get a close approximation but you can't get it exactly what it's like to be in zero-g.
It was a little worrying at first because the LIDARs would not lock on. As we approach the space station, we scan the space station with a thing kind of like a laser radar. It laser scans the space station and it recreates that model internally in the computer to figure out the relative position and movement of the two. We needed a definite lock, as opposed to an ambiguous lock, and the actual space station is a little different from the model of the space station. [It had some highly reflected spots.] It did, yeah. So, essentially, the computer wasn't 100% sure. It was pretty sure, but not 100% sure that it had a lock on the space station. So, what we were able to do is just upload new software to diagnose the problem and then run that software in simulation on a hardware-in-the-loop version of Dragon that we have on the ground. We have a complete version of Dragon, which includes all the avionics software, vales and everything, and we can run accelerated simulations on that system and verify that it would work. Yeah, so we had a proposed code change, ran it on our hardware simulator, it worked, uploaded the code patch, and achieved lock on the space station with that. Essentially we narrowed the field of view. Yeah, essentially we narrowed the field of view like putting blinkers on a horse.
Well, technically astronauts have been on the spacecraft, at the space station. We've already done a lot of work to pass the space station safety review. As Dragon is approaching the space station, it's a robotic space freighter, basically, and if something were to go wrong it could potentially destroy the - uhh.. wrong word, heh.. shudder at the thought - but in an absolute worst case [..] something terrible could happen to the space station and people on-board could be hurt. Obviously there's a lot of caution that's exercised there, both at SpaceX and at NASA, and before we even get close to the space station we've run a million simulations and we're checking it as we get closer, we're verifying that everything looks good, but it is an autonomous vehicle. It's not as though there's someone with a joystick that's steering it. It's just pausing at various points to ask if it has permission to proceed. Then we look at the data, make sure everything is cool, and then give it the okay to go to the next, essentially, way point, but it's doing all of the guidance and control itself.
To add, essentially, the ascent and descent elements of manned spaceflight, as we essentially have - it's 'man rated' if you will, for being around the space station, but not for the ascent and descent phases. In the ascent phase we need to add a launch escape system, so if something were to go wrong with the booster we can escape from the booster and then we've also got to do some upgrades to the rocket to make sure it's as fault tolerant as possible and for those parts which are not as easy to make fault tolerant, that we've tested the living daylights out of it and it'll have safety margins that are higher than a rocket that would carry a satellite. Typically, it's a rough rule of thumb, you aim for about a 25% margin on a satellite mission but a 40% margin on a manned mission - above the expected flight loads. Now, our abort system I'm pretty excited about because this is going to be the first time there will be abort capability all the way to orbit - or, proper abort capability all the way to orbit - because the escape engines are built into the sidewall of the Dragon spacecraft and they use the same propellant that would otherwise be used for on-orbit maneuvering - because you either need to maneuver on-orbit or you need to escape - you don't need to do both. It's like, one or the other. As a result, we avoid having the big solid rocket on the nose and that has some real advantages. That big solid rocket is so heavy that you can't afford to carry it all the way to orbit, so you usually have to discard it about three minutes into the flight. You don't have high acceleration escape capability all the way to orbit like you will with Dragon. It has enough thrust to accelerate away from the rocket, even in at - what's called Max-Q, which is maximum dynamic pressure. So, even when it's going about mach 1.8 or so, and the rocket is going at full force below it, it still has enough thrust to actually get away from the rocket.
Now, being a liquid rocket, we do have an advantage that we can turn it off. Ya know, and it's pretty easy to turn off. In fact, with liquid rockets the tough part is making it stay on. That's what you need to worry about. But for solid rockets, once they're on they tend to stay on. I'm not a big fan of solid rockets for human transportation. Solid rockets are, themselves, quite reliable - particularly if you don't have segments - but you can't turn them off. So, if something goes wrong with the overall system, you're going to have some things wanting to hit you in the butt that are hard to get away from.
Version 1 of Dragon is pretty basic really. I'd classify it as, kinda, level one reentry and landing, which is parachutes to a water landing. It's fairly straightforward and fairly reliable but what we're going to for, call it, version 1.5 is we're going to go parachutes to a land landing. I'm hoping we'll be able to do that next year, but certainly the year or there after. Then, level 2, or maybe even level 3 - maybe level 2 is like wings - but then level 3 would be landing with thrusters. Another advantage of having the escape thrusters built into the escape wall of the Dragon is that, when you come back, you can use some of them to land. So, they're really high precision and they're redundant thrusters - you have eight - and well, if you lost the right four you could lose four - you could lose at least one - they're in pairs, so. We've gone back and forth on how we can make this better, but there's so many constraints in the system, but this is pretty good. You can lose any one of the engines and still be safe, and then we have parachutes as a backup on top of that, so - and the parachutes are redundant. So, there should be - I can't think of a safer way to do it, honestly, than to have redundant thrusters and redundant parachutes for landing. In a best case scenario you can be quite reusable because you can land propulsively - just like they landed on the Moon - and that sets you up for reuse quite well.
Oh, I guess a lot of people aren't aware that of the 46 missions that we have under contract, only 12 are for NASA. So, the great majority of our missions are actually commercial missions. They're satellite launch missions, and that's both for our Falcon 9 rocket and our Falcon Heavy rocket and we're hopeful that Dragon can have some commercial use as well. Ya know, we're talking to some people. There's this guy Bigelow who wants to do a private space station and that could be pretty cool 'cause then we could, ya know, maybe deliver people to his space station, share costs with NASA, ya know, reduce the burden of NASA in that regard. I think really the general approach is, what are the things that we can do to forward the cause of space, and that's what we'll do. Now, some of those things are not going to be the most commercially - ya know, they wouldn't necessarily be profit maximizing - but I don't really care and that's why I'm making sure I maintain control of the company. SpaceX is going to be a viable company - we have some venture investors and I don't think they're too worried about that - but there are different ways to run a company. You can run a company where you're really under the gun with each quarter and you've got to make a lot of short term optimizations which makes it difficult to make big technology advancements because some of those can take years to pay off, so you're they're just at the wrong interval, ya know, the wrong interval to make those changes if you're only doing things on a quarterly basis.
The goal at Tesla has been to change people's thinking with respect to electric cars. People were operating under the illusion that an electric car would have to be, let's say, aesthetically challenged - ya know, low performance, low range, and kinda look like a golf cart. None of these had to be true, but I'd talk to people and say none of these things have to be true, ya know, and you can have a long range car, the physics is pretty obvious - what's the energy density of lithium-ion and what's the energy usage per mile, it's pretty straight forward, and people would be like, oh, no no no, that can't work. I'd be like, where's the error in the calculations here? These are pretty obvious. Amazingly, people would refuse to - they'd either ignore it or say it can't be done - it's ridiculous. So, we just decided to make a car and that's pretty hard to ignore. Whereas discussions or Powerpoint are much easier to ignore. Everything does work on Powerpoint, so there is reason for skepticism there, but having an actual car and one that is fully homologated for use on the roads and meets all the safety standards and everything, was really important. So we did the Roadster and then after the Roadster people said, oh, sure, you can make a small electric sports car, but you couldn't make a real car. Ya know, like a Mercedes or an Audi that has all of the features and capabilities. So then we made the Model-S. Actually, people were quite skeptical. Then we made the Model-S and people were like, oh, you couldn't possibly ramp up production. Yeah, I could ramp up production. It's sort of like a series of issues.
The goal with the Model-S is to show that you can have a long range electric car and with the recent announcement of the supercharger, we're building a nation wide network of really fast chargers, hence the name 'supercharger' which is originally obviously from the gasoline car industry. The idea there is you'll be able to charge your car with the same level of convenience as you'd normally use your gasoline car. If you start a trip that starts at 9am, by noon you want to stop for a bite to eat, go to the restroom and gas up your car, and that's a good 20 to 30 minutes. We were able to figure a way, with some advanced technologies, to have it such that you could stop for half an hour and have three hours driving recharge. So about a six to one ratio. Which is about the convenience inflection point, for most people, for a long range trip.
We made that work, and then we added solar panels to the supercharger stations to address the long tailpipe argument that says, oh, you're just pushing emissions to the power plant. Well, no, because the supercharger stations will actually generate more electricity than the cars use in recharging. For the supercharger, it's basically the same level of convenience during long distance trips. We'll have it nation wide. We already have it throughout California, so you can drive anywhere in California using the supercharger. It'll have enough solar panels to generate electricity back to the grid on an annual basis. That's how we're sizing them, so they'll be slightly energy positive. Then we're also making it free. Well, it's not entirely free. There's obviously the cost of it is built into the cost of the Model-S but the cost of it was so low that we looked at it and said, well, we could charge some small amount for this or we could really make it free for the Model-S.
Right.. well, it's a little more than that, but if you were to stop and put in, say, 150 miles range, it's about four or five bucks. So it's really not much. People drive long distance a lot less than they think they do. "I wanted to have something that is really profoundly better than a gasoline car for driving long distance." Not just try to equal a gasoline car but try to say, well, what could we do which makes an electric car suddenly better than a gasoline car and so that's where free long distance is pretty awesome. You can't do that with a gasoline car. It's way too expensive. The basic tag line is: drive anywhere, for free, on free sunlight, forever.
"I love being a political football." I guess, with respect to Tesla, here are things are with Tesla. Tesla has over 35,000 people and these are high quality jobs. We manufacture, from the ground up, in the US. At least in respect to Tesla, we're a surge in American manufacturing activity. The car's critically acclaimed. We actually export powertrains to the rest of the world because we have Toyota and Mercedes as customers. We export electric powertrains to those guys. We're a net exporter and we've got balance of payments. We're expecting to be break even next month, which is pretty fast after the introduction of the Model-S, I think. Yeah, so, and then if you look at our market cap, the value that the stock market assigns to Tesla is about three billion dollars. If you were to take every company that's failed in every DOE program, it doesn't add up to $3B. If you were to actually look at this from a venture portfolio standpoint - presumably Mitt Romney understands these things, but maybe not - then the net gain is very significant. You can say, well, what value has been added to the American economy, what value has been subtracted from the companies that didn't work out, and the net is very positive. So one would have to say that the DOE has done a very good job.
We did unveil the Model-X, earlier this year, and the Model-X is an SUV that is built on the same platform as the Model-S. It's got a slightly longer wheel base but otherwise it's on the same platform. It's really addressing the SUV and minivan market. It's got a unique innovation which is the double hinged gull wing door on the side. That's never been done before I believe. Certainly hasn't been done in any production car. We call it the Falcon Wing because when both doors are up it looks sort of falcon-like. I think it's the coolest door. As far as doors go, it's pretty cool. The reason it has to be double hinge is that, if you just made it a single hinge gull wing, the arc as it swings out, it swings out too far and then too high, but as a double hinge you can actually do the same where it basically does this movement. So it's actually going, almost straight up and if you can physically fit between the Model-X and another car, then you can open the door. It's actually more convenient than a minivan door, because a minivan door when that opens it actually comes out and slides, so you can't get to the car from the rear, but with the Model-X you can, when the door's open.
Yeah, absolutely. That's the thing that we should be aiming for long-term, which is to create a self-sustaining civilization on Mars. I mean, that's the thing that will ensure that, in the event of a calamity on Earth, civilization continues. The light of consciousness is not extinguished. Those seems like good things to me. So yeah, I think that's what we should strive for. I don't think we need to anything at the Antarctic, that's nice, but on Mars we should be aiming for a real civilization. Which ultimately means taking, at least, tens of thousands of people. Perhaps ultimately millions of people and millions of tons of cargo, because you've gotta recreate the industrial base of Earth. So, to do that, you need really big rockets launching a lot, obviously.
Yeah, it's in like, permanently shadowed craters. It's pretty chilly in there, but you could mine the Moon, potentially for water and you could have propellant depots on the Moon. I'd liken it to when the early colonies in the Americas were being established, and early voyages of discovery. You kinda want to go there and then, if it turns out that having way stations makes that trip more efficient over time then people will build those stations. As soon as you've got that destination, you've got the forcing function, then you'll see people do whatever seems sensible to make that better. You definitely don't need to have to mine asteroid resources to get people to Mars. You definitely don't need to do that, so I'd say - since it's incredibly hard to begin with, unless something needs to happen, I would toss it out, and let people do it if it seems to makes sense later when you've got that forcing function of the trips between the planets. I think the things to do is to produce - this is what I think - we need to build really big rockets and I think they should probably use methane, because that's the cheapest fuel, and you can refuel methane on Mars by taking CO2 from the atmosphere, mining water ice, there's a huge amount of water ice on Mars, and you get CH4 and O2 pretty easy, like, basically. That's the way to go, and just make 'em real big and launch 'em a lot and reusable - must be reusable, this is important.
I don't know, lots of exploring? I think you'd probably be working on building infrastructure on Mars and exploring all the interesting things. Like, ya know, Valles Marineris makes the Grand Canyon look tiny, it's kind of cool, go down that and check it out. Olympus Mons, it's kind of a shallow gradient but it's the tallest mountain in the solar system. Exploring a new planet, I think, would be pretty interesting, and then building the infrastructure necessary to make life self-sustaining on Mars.
Well, first of all, I think if we had to, we could, just with incremental improvements to lithium-ion, I think we could turn the entire automotive world to pure electric. It gets harder for airplanes. You need a higher energy density for airplanes. But certainly for cars, boats, trains, lithium-ion could do it. There are some modest breakthroughs happening in lithium-ion to, for example, change the inert from carbon to silicon, and there are some lithium-ion chemistrys like lithium-sulfur which actually have really high density. In the 400 to 500 Wh/kg range. Current state of the art of lithium-ion is about 250 Wh/kg. That said, I do think there's potential for a breakthrough in capacitors. In fact, that's what I was going to be studying at Stanford, where I dropped out, was working on high energy density capacitors and leveraging the equipment that's been developed for chip making and photonics to, ya know, create something that's solid state but precise down, essentially at the molecular level and see if that tens of billions of dollars invested in making really tiny circuits could be used to create an ultracapacitor with high energy density. There are some companies - well, there's one company I know in particular, based in Silicon Valley - it's not E-Store, in case you're wondering - that I think has the potential for a breakthrough in that arena. That could be quite revolutionary.
Right, well. If you're a newcomer product, it's really not enough to just be as good as the incumbent product, because people are used to what they're used to - people are set in their ways. In order to get people to change, you have to do something that's meaningfully better. Otherwise, the gradient of change - ya know, the change with respect to time - that change is going to happen slowly. If you want it to happen fast, it's got to be obviously better. That's why we've tried so hard with the Model-S to create a car that's obviously better. Adding things like the supercharger - we could have just said, oh, every time you use a supercharger it's going to be $5 and then people would have to do some math to figure out, okay, what does that mean relative to - and it's like, it's free. People understand free. That's really easy to understand.
I think it is important to be highly adaptive, and I do think physics is a good framework for thinking. I think, it's like, particularly as you're trying to figure out new things, reasoning from first principles is a good way to go, as opposed to reasoning by analogy. It's computationally easier to reason by analogy and if you tried to reason from first principles all the time, you wouldn't be able to get through your day, but when you're trying to do something new and complicated, that is the way to do it because analogies are not necessarily perfect and they're relying on things that have already occurred, so, if you're trying to make something new then it's not a great way to go. What reasoning from first principles really, just, means is boiling something down to the fundamental truths, or what appear to be the fundamental truths, and reasoning up from there, and then having a good feedback loop. So, you're seeing what happens and adjusting accordingly and then, I think, it's important to be particularly alert to negative feedback because people generally, particularly friends, they'll be reluctant to give you negative feedback, because they don't want to hurt you. The reason they're reluctant to do that is because most people are hurt when they get negative feedback. It's not an unreasonable expectation. So, you have to actually coax people to give you negative feedback. Encourage negative feedback and listen to it carefully, and don't react in a bad way when you receive it. That's really important.
I think payment systems are pretty easy, particularly if you don't have to integrate with a lot of legacy stuff then payment systems are super easy. That's just like World Of Warcraft, ya know, credits. How many credits do you have in your database? You don't have exchange rates and have to, like, interface with bills and coins and have credit cards and have a federal reserve and all these things, they complicate things. What Paypal really did is de-complicate things, but Paypal would be, like, super-trivial in a new environment.
It does not matter, put that cell on Earth then. See, that's the point I'm making. Take any given solar cell, is it better to have it on Earth, or is it better to have it on orbit? What do you get from being in orbit? You get twice as much sun - best case - but you've got to do a conversion. You've got to convert it the energy to photons - well, you have incoming photons that go to electrons, but you - you've gotta do two conversions that you don't have to do on Earth, which is you've got to turn those electrons into photons and turn those photons back into electrons on the ground, and that double conversion is going to get you back to where you started, basically. So why are you bothering sending them to bloody space. "I wish I could just stab that bloody thing through the heart." BTW - electron to photon converters are not free and nor is sending stuff to space. Then it obviously super doesn't work. Case closed. You'd think. You'd think case closed, but no. I guarantee it's gunna come up another ten times. I mean, for the love of God.
I think it's okay. I mean, I think the whole interplanetary human flight thing being a danger to human beings is somewhat overblown because, clearly, we sent people to the Moon, right, and that's deep space and they've lived to quite an old age. We've not seen any premature deaths, really, of people that have gone to the Moon. So really it's just a question of how long can you be in deep space and there's a certain damage rate per day which is then offset by your body's ability to repair that damage. So, going to Mars and doing a six month journey is going to - you're going to have some slight increased risk of cancer but, from what I've seen, sort of a back of the envelope calculation, that increase in cancer is less than if you smoked on the way there. Although smoking is quite bad, I have to say. There is one thing that people should be quite concerned about, which is solar flares. This is often thought about in the wrong way, where people say, oh, you need to have, like, you need to have 20 feet of water or whatever it is to shield against a serious solar storm and they say, oh, you need to have a sphere of water around you, and that sphere of 20 foot water would be ridiculously expensive, or ridiculously heavy, but that's true, but actually, what you'd really do is you'd have a column of water, pointed at the sun and you'd be in front of the column. That'd make much more sense, and then you've gotta have water anyway, so it doesn't end up being a big deal. So I don't think the journey there is - there's no showstoppers there but over time we will find ways to improve it and reduce the risk of cancer and that sort of thing and reduce the journey length as well, but really, fundamentally, we need to get there. If we can't get there, it's all like academic, so we need to get there.
Thanks. Well, I think I'll just talk a little bit about the anomaly that we experienced and we did have an issue with the Dragon spacecraft briefly on the way to the space station. The rocket performed very well, flawlessly as far as we could tell. We did have a slight issue with the propellant check valves, which we were able to fix within about four or five hours and then get to the space station about a day later, and there were no further issues after that. I think we understand the root cause of that and have addressed that in future vehicles and so we don't expect to see that issue again. Yeah, I think I'll just leave it at that.
Yeah, we are currently scheduled to launch late this fall with CRS-3. There's a number of upgrades to that particular Dragon configuration, which is going to give NASA even more of the critical types of cargo that they're looking to both bring up and bring back.
It's actually also worth noting that it will be with the new version of Falcon 9, which [has] some fairly significant upgrades on the vehicle side, both to improve performance and to improve reliability. It's capable of actually, really, maximizing the payload of Dragon. We can, as much as you can basically pack in Dragon, we can send up. It could potentially raise the useful payload of Dragon by several tons. This is also the version of Falcon 9 where we will attempt to recover the first stage. Although, as I've said before, I think it's going to take us several flights before we are successful in that. I'm not sure it'll be this flight where we are successful, but that is our aspiration and that is one of the key design goals of the new version of Falcon 9.
Sure, this is obviously going a little off-topic on the CRS flight, but I'll just spend one minute on it. I'd like to say thanks to the folks at NASA Glenn, who operate Plumb Brook, for helping us out here. Their assistance is much appreciated. It's an awesome facility. If you've seen pictures of it, it's really epic. Super cool. We're just assembling the fairing right now to do the vacuum separation tests, which are quite exciting tests, because it's a giant giant fairing. We'll be releasing information, probably in the next few weeks about how those tests go. Ya know, they are tests, so things could definitely go wrong, but yeah, I just want to give a special thanks to the NASA Glenn folks.
I'll make some brief comments and then maybe Charlie can share the perspective of NASA on how things are going. Things seem to be going pretty well. We're passing our milestones and making, I think, good progress. We're hoping to do the pad abort tests fairly soon. Potentially later this year. That's going to be an exciting test and we're hoping to unveil, actually, what Dragon version two looks like, also later this year. We'll work with NASA on that unveiling. I think it's coming along really well. As with the cargo program, the partnership with NASA, from our perspective, is going really well and it's just a really great partnership.
The problem was a very tiny change to a check valve that served the oxidizer tanks on Dragon. Three of the check valves were actually different from the prior check valves that have flown in a very very tiny way. It's difficult to describe verbally. You have to really see a diagram. Because of that tiny change, they got stuck. What we were able to do was write some new software, in real time, and then upload that to Dragon where we built pressure upstream of the check valve and then released that pressure to give it kind of a kick. It's like the spacecraft equivalent of the Heimlich maneuver. That basically got the valves unstuck, and once they got unstuck they worked really well. So yeah, it was definitely a worrying time. We also had some difficulty communicating with the spacecraft, because it was drifting... kind of in free drift in orbit. So we were able to work with the air force and get higher intensity dishes - more powerful dishes - to communicate with the spacecraft and upload the software, do that pressure slam maneuver and get things unstuck, and from then on it worked really well.
The software that we uploaded was really just to get the valves unstuck, so we don't need any software changes in the future. We really just need to fix this tiny tiny little issue with the valve. It's essentially reverting it to what it was. It's really such a subtle change, but we've been through some checks to just verify that this can't happen again. I wouldn't anticipate this to be an issue ever again. As I said, it was a momentary interruption but not something that was, obviously, serious in the end.
With respect to the recovery, the initial recovery attempts will be from a water landing. The first stage booster will, after separation, continue in a ballistic arc and execute a velocity reduction burn before hitting the atmosphere, just to lessen the impact. Then, right before sort-of splashdown of the stage, it's going to light the engine again. So, there will be two burns after stage separation, if things go well. But I really want to emphasize that we don't expect success in the first several attempts. Hopefully next year, with a lot more experience and data, we should be able to return the first stage to the launch site, deploy the landing legs and do a propulsive landing on land - back at the launch site. So, this year is about just recovering - hopefully recovering - the first stage, at all, from an ocean landing and then next year it'll be the boost-back, return to launch site, with the landing gear deployed. That's our aspiration.
You mean the return to launch site? [Yes.] Not a specific flight, but it would be sometime - I'm guessing - around the middle of next year.
That's the exact sentiment that I would express as well. I don't think a lot of people out there appreciate that NASA and SpaceX are really closely integrated. Like, day to day. It's not like some sort of hands off thing. It's really a joint effort. NASA knows everything that we're doing and we know, at least the stuff that pertains to us, what NASA's doing. We have high speed data links between Johnson Space Center and the Hawthorn California headquarters of SpaceX. In fact, Charlie was with me in mission control on this last mission and I must say, it's great to work with NASA. On this last mission, NASA was so cool. What I mean is, like, I was completely unruffled. I was far more anxious than NASA was. I was like, we have one cool customer.
It was not a manufacturing tolerance issue, it was actually a tiny design revision change from a supplier. The supplier made some mistakes there, and we didn't catch those mistakes. Sort of a dual responsibility. We do actually run the system through pressurization checks, but we didn't previously run them through the high pressure checks. We do a low pressure functionality check, but not a high pressure functionality check. Now we've changed the procedure to do a high pressure functionality check and, obviously, both us and the supplier are now extremely sensitive to even the tiny nuanced changes that we're talking about here. The thing that was kind of interesting was that the check valve didn't get stuck if you did these low pressure functionality checks and we didn't expect there to be any difference at the high pressure levels. That was clearly a mistake and we'll make sure we don't repeat that in the future. This is definitely a learning process. Literally, if you looked at the valve you'd have to use a magnifying glass to even see the difference.
On the rocket side, the next version of Falcon 9 is certainly a meaningful upgrade. It's a vehicle that has about 60% to 70% more capability than the current, or the old, version of Falcon 9. We've really improved the structural efficiency, engine efficiency, the thrust is about 60% greater, and we've also improved the redundancy on the vehicle. We're now moving to a full triple redundant system on the Falcon 9, and also improving the engine to engine protection on the first stage, and the engine to stage protection. As people know, we had an engine go out on us in flight 4 of Falcon 9. The mission completed successfully, but we had an engine go out on us. Proving that we can lose an engine and complete the mission, which is what we always said we could do, but looking at taking that as a lesson and saying, well, how can we even improve the engine protection cell? Going into the next version of Falcon 9 we've made it even more robust. The increased capability of the rocket would mean that we could actually lose an engine right after liftoff and still complete the mission. Still have enough capability to complete the mission. So, I think, there's a number of improvements across the board, in structures, avionics, engines and then, as I said, this version is really designed to be able to have the first stage come back - boost back to launch site, deploy landing gear and actually land propulsively. But it will take at least a year I think, for us to get that right, and there will be many losses of stage between now and then.
Sorry, I should also mention Dragon version 2. So, there are the upgrades to the rocket, which are more proximate, and then there are some minor upgrades to Dragon which Gwynne was referring to, and then there's Dragon version 2 which will be a substantial upgrade. That version of Dragon will be capable of landing propulsively on land. That's going to be a really quite a significant upgrade. The water landings, in the long term, should be a thing of the past, and allow us to do missions with a more rapid tempo, without having to marshal a bunch of ships.
I don't want to jump the gun too much on a future unveiling. We want to work with NASA on that unveiling because I think it would be kind-of a fun thing for the public to see the new version, kind-of up close. It is quite a significant upgrade. There are very powerful thruster pods, side-mounted thruster pods, on the new version of Dragon and quite big windows as well for astronauts to see out. There's legs that pop out the bottom. "It looks like a real alien spaceship", if you will. We started off landing in water because that was kind of the easiest thing to do. We didn't really know what we were doing, honestly, at the beginning. I think we're getting better, but we didn't want to take any unnecessary risks, but now we want to really try to push the envelope and see if we can take the technology to where it hasn't been before.
Hopefully later this year. We have to figure out the exact timing, but hopefully later this year.
'I don't know whether our technology level will keep going, or subside. For the first time in four and half billion years, the technology level is at a point where we can extend life to another planet; make life multi-planetary. I think it's too easy to take for granted that it's going to stay above that level, and if it doesn't, if it falls below that, will it return? Who knows. The sun is gradually expanding and in about roughly 500 million years -- maybe a billion years at the outside -- the oceans will boil, and there will be no meaningful life on Earth. I mean there might be like some chemotrophs or ultra-high temperature bacteria or something, but nothing that can make a spaceship. And you might think 'that's a 500 million year time frame', but it's only a 10% increase in the lifespan of Earth. So "if humanity had taken an extra 10% longer to get here, it wouldn't have gotten here at all."'
Good morning, it was a pleasure to be invited to speak at this particular event. Its the first time for my attendance, although I've had my team here for years. I wanted to chat very briefly about SpaceX; by the way, just to clarify, I'm President and Chief Operating Officer - I have a boss, who is the CEO. So I wanted to chat very briefly about SpaceX, what were doing now, chat very briefly about the market and the industry and then talk, really try to talk about some future things, things to look forward to. I'm gonna start the video, so you get a good sense what SpaceX is all about.
So what you saw in that video, was our most recent mission to the International Space Station. So Dragon is the capsule - or the spaceship, Elon likes to refer to - the space ship, that carries cargo here from Earth up to the International Space Station and back, returning critical cargo - as well as other things - from space. Falcon 9 is the launch vehicle that flies Dragon and I'll chat a little bit more about both those systems as we go on. We've been very pleased to have executed three missions to the International Space Station in the last ten months, and look forward to lots of activity there. So [didn't get that one] the sense of what SpaceX is all about, we're a Space Transportation Services Provider.
One of the reasons I was really thrilled to be asked to come chat at this panel, or this discussion this morning, is because of the uniqueness of the market in this area. CASBAA represents a tremendous market for launch vehicles as well as satellites. There is 76 - actually there is a number of different organizations that counted different satellites, I took the average of 76 - satellites in the region. Tremendous.
In addition CASBAA represents the market sector that has the most growth projected - at least in the fixed satellites services - over the next decade. So you are an important, important market and a critical group of folks. So it's a pleasure to be here.
So what has SpaceX done? What we're trying to do - We're definitely trying to revolutionize access to space. We have focused since the beginning on reliability, although fortunately, or unfortunately we are most known for low cost. We are trying to change - like I said revolutionize - access to space. Our goal is to fly often and not to make a ton of money on a few launches, but to make a good amount of money on tons of launches. Were really trying to expand the market. I'll talk a little bit about the technologies necessary to do that in a bit.
So SpaceX is a private company, we were founded in 2002. Again - with the singular goal of providing highly reliable, low cost access to space. My founders focus primarily to take humans into space. Many think that in this industry, that that's irrelevant, to that particular group. Humans only go on space transportation system that have demonstrated incredible reliability, so why wouldn't the satellite and services sector benefit from that particular focus.
So we were founded in 2002, we have about 3300 organic employees right now, 3500 including our full time contractors, so we have had tremendous growth over the last 11 years. Its been really an extraordinary, extraordinary journey getting here. We have over a million square feet [~92.900 m] of factory in the Los Angeles area. I do invite you, to come visit the rocket factory, if you are near Los Angeles Airport, we're about 5 miles east of there. What you'll see is metal blocks and metal sheets coming in to the factory and rocket stages and engines leaving. Really, its a fascinating place and I do invite you to come. We have launch sites at Cape Canaveral, that's where we launched Falcon 9 thus far and we are just opening up our launch site at Vandenberg Airforce Base to be able to service the entire market; that should be later this summer. Our propulsion and structural test facility is in Central Texas, that's also a very interesting place. We launch, or excuse me, we fire rocket engines every day there, so its like a launch every day. Its in a little bit of a remote place, its halfway between Dallas and Austin, harder to get to. We are looking at a commercial launch site, given the robust manifest that we have, we definitely are gonna need more launch sites than we currently have.
Talk a little bit about the business, I've already talked about the - you're not supposed to say explosive growth in this industry, but I'll say it none the less, hopefully not jinxing myself. But we have grown tremendously, we have put 5 billion dollar worth of business on the manifest. We have over 50 missions to execute. Our largest customer is NASA, with the servicing contract for the International Space Station. Although we've sold - and plan to execute - far more commercial space launches, which is really exciting for us. We've made tremendous strides in marketing to this particular region, with AsiaSat, Asia Broadcast Satellite, NSPO and Thaicom. Other customers include other regional operators, from Israel, Mexico, United States, Canadian Governments, Argentina as well, and then SES, IntelSAT and some of the other: Telecomunications, Constellations, Orbcomm and Iridium.
We have an open pricing policy, we do put our prices on our manifest. Our competitors don't like that, but we'll continue to do that, I think pricing transparency is really important to drive change in the industry, which is one of the things we're trying to do.
Product line; were flying Falcon 9 with the Dragon Capsule currently. This summer we will roll out the upgraded Falcon 9 [v1.1], it has about 50% more cargo capability and the fairing for the first time on this class of vehicle. So that mission - the first mission, will occur from Vandenberg very late this summer and then the first GTO mission will follow that up very closely thereafter.
Falcon Heavy, I'll talk a little bit in the future. I tell my engineering teams 'Cmon it cant be that hard, its just three Falcon 9 glued together, lets move it', but obviously its a little more complicated than that.
And then we're also flying the Dragon Capsule both to the International Space Station, it also serves as a nice scientific platform as a free flier.
Let's talk a little bit about flight history. I hope by this time next year I wont be able to fit all the successful missions on this particular chart, so hopefully I'll be stopping that. But we have flown Falcon 9 successfully five times, three of which went to the International Space Station. Critically the second flight that we had of Falcon 9, in December of 2010, took the Dragon Capsule to orbit, it orbited two and a half times times, it came back to earth and we became the first private company to do that. It was really an exciting time. As I mentioned we have flown Dragon four times, three times to the International Space Station. The Dragon Capsule is critical for business on Station, because it not only takes science and cargo up, but it's the only vehicle, that can take substantial cargo back and science back. A few of the other vehicles can take [I guess another word for trash, didn't understand exactly] back from the ISS, of which there is plenty, but Dragon takes the science back, which is why we have the ISS up there in the first place. So hopefully well see more capsules and more capability that can handle that particular mission.
So what else are we working on, besides getting the upgraded Falcon to Orbit, carrying out cargo missions every three months and in the near term taking Geostationary Transfer Satellites to their mission orbit? We do wanna turn the Dragon capsule into a crew rated capsule. Right now only two countries can take astronauts into space - and I think that's a shame, I think we need to see more - Russia and China. The US lost that ability when we retired the Shuttle in 2011. So hopefully we will see more organizations coming forward and taking astronauts to space - I think its a critically important function for us as humans actually.
So we've got an ascent test and abort test in early 14 and hopefully we will be flying demonstration flights in early 15 with crew. That'll be an exciting time, then everybody that wants to go to space, that can afford to go to space, should be able to go to space.
Grasshopper! - really important topic. What I said earlier; were really trying to change the way this industry operates, one of the most important elements of that - we feel - is reusability. I know it scares a lot of customers early on, but were gonna get this right and we gonna make it work. If you think about the airline industry, if you only flew a 747-jet once, we wouldn't be flying 747s. So were really trying to take this upside down in this industry and be able to fly our rocket stages more than once. So we're working on this technology, this reusable technology. The starter vehicle we call Grasshopper, what were doing, is we're doing hops at our facility in Central Texas - I'm telling you that's a really cool place to go visit. And I'm gonna show a video actually, that shows you what we are trying to do here. Its gonna be side-by-side, one is kind of a far out look at Dragon, or - excuse me - at Grasshopper, and the other one is actually on board the Grasshopper test vehicle. We have a Cowboy Mannequin there, named Sunny, we have got a little camera attached to his head.
So if you were standing next to Sunny that would have been a really fun ride and you would have done just fine. That was a 250 meter hop. That was a 250 meter hop, we just jumped 350 meters this Friday. And we will continue to add altitude to those tests, till were actually going trans-sonic. Were not going to be able to execute these tests in Central Texas however, we're gonna have to move to a more remote location. So we'll be moving the Grasshopper capability to New Mexico. So what we're trying to do is get almost an entire first stage burn and bring that stage back.
What we would love to do - I'm so excited to sell the operators here - a launch vehicle where really the only cost associated with that vehicle - the non recurring, excuse me the initial investment in the stages themselves but the cost of fuel and the mission operations. So if we get this right - and were trying really hard to get this right - "we're looking at launches to be in the five to seven million dollar range - Gwynne Shotwell", which would really change things dramatically.
So, though the folks that are licensing this technology, the Federal Aviation Administration, who are very supportive of SpaceX and what we are trying to do - this scares them a little bit. Michael Huerta the head of the FAA, when he found out publicly that we were doing this he said: 'They wanna do what?' So, we're keeping them on their toes.
I'll talk very briefly about Falcon Heavy. So from a commercial perspective Falcon Heavy, it's an over-sized vehicle. Its got more capacity than folks in this room need - unless we wanna put two of the biggest satellites on this vehicle and fly them both to GTO. That would yield a pretty respectable price for folks. But what we are really trying to do is, push the bounds of technology with respect to size of launch vehicles, and see if we can put some really interesting things into the solar system and hopefully land some things on Mars as well. This will be the largest vehicle flying since the Saturn moon rockets. We're sandbagging the GTO-numbers, actually analytically it looks like were gonna take 19 tons to GTO. But we're being conservative, with the 12 metric tons. And this will be - hopefully - a vehicle that takes many things to Mars.
So what else? I look forward very much to the questions you have. Hopefully they are provocative, it makes it much more fun. And I believe, I'm supposed to take Q&A now?
Yeah, there's no question, this is a really hard thing to achieve - if it weren't, then I think others would have done it before now. We're getting very comfortable with the reentry with the Dragon-capsule. But the Dragon-capsule has a shape that is stable on reentry from orbit. Whereas rocket stages traditionally are not stable on reentry. So there is a lot of software involved, there is a lot guidance, navigation and control involved and then there's a lot of thermal protection required. So we have to make advances in all those areas. We also have to be able to restart these engines supersonically, which is gonna be a fun challenge. I'm pretty sure we're gonna see some really big, great, unsuccessful flights on video. But you know, if we only experience success in these tests, than we're not pushing hard enough and fast enough - this is hard business, we should see some failures. - On the test vehicles.
That's correct yeah.
Yes
I think in managing that kind of growth, there is two primary areas: Leadership that works, with a kind of group of 50-200 people, is very different from leadership that works in a company of 3500 people. So you really need to be comfortable in moving your leadership team around - as necessary - to manage that growth. In addition communications had clearly been pointed out as being key. And by the way, I'm not saying we did it all right. As a matter of fact, when we're flying successfully every couple of weeks; I wanna take a little break and study the growth that we have had and what we could have done do things better. But the area that points out most strongly is communication. We still don't know how to communicate throughout an organization of 3500 people.
I have gotten asked that question many times actually. I think...
I apologize, I didn't mean that.
So what's really key, in what keeps SpaceX as a kind of a vibrant company. For those of you who haven't been there to visit it: It's got a really great buzz to it, people are really excited about what they're doing and what they're working on. And I think if you stop innovating, and if you stop working on visionary things, that's when you kind of contract. You probably get really good at doing what you're doing. But I think you become probably a little bit lethargic. It's the new entrants that come and really shake things up. And I think it is important for Elon to continue laying out really audacious goals.
Yes, I was alive.
If you don't mind I'll just start chatting about it?
You know, in our partnership with NASA - you know by the way the Falcon 9 and the Dragon capsule was developed in partnership with NASA. NASA paid just under 400 million dollars for that and we, we SpaceX spent about 450 million dollars. NASA learned a lot in working with us and we learned a lot from NASA in that partnership. There are a lot of really great things that you can glean from working with kinda the state customers. And I think they benefit dramatically as well by working with entrants, who do things very differently. I don't think SpaceX - unless Elon gets hit by a bus, which really would be awful - I don't see SpaceX becoming the moderate. Its very contrary to what he is about and what he really wants SpaceX to be. So I don't think that'll happen.
Oh, there is no question, I have no question that we can fly people in the Dragon capsule right now. Getting people to mars is much harder, getting Grasshopper to work is gonna be much harder. But when we started this job, in the Dragon capsule carrying cargo, you know it was pretty nerve wracking - we were a very you company, we got that effort with NASA in 2006. And we were, I don't wanna say scared to death, but we were pretty anxious about that activity. And we've got such a brilliant team of engineers that work really hard, we get through all the technical challenges. Not as quickly as we'd like to, but we always get through these technical challenges. So I don't see human spaceflight as an impossibility or even high risk for us at all. I think there's gonna be other projects that are gonna be harder. I'm not saying that we're not focused really hard on it. And I hope this particular audience in this industry sees, that SpaceX - and other competitors of ours - flying crew, can only make your missions more successful.
Viewer question
So the question is: "Will space travel be as ubiquitous as air travel? I don't think it will be as ubiquitous - I would love to say it is - but I don't believe the costs will ever get quite as affordable as air travel and hopefully I'm not gonna get fired by Elon for saying this. - Gwynne Shotwell" But it will increase thousands of thousandfold. Right now the cost to get to the ISS - to LEO - is 67 million dollars per seat and we'd like to see space travel, we'd like to see folks going be able to get to Mars for a couple of hundred thousands, maybe half a million Dollars.
Viewer question
Well in some respects you're quite right, this rocket looks very much like any other liquid fuel rocket that's flying. The innovations that we have, you know there is thousands of innovations on the Falcon 9 launch vehicle, that allows us to sell it for a pretty discounted price, compared to our competitors internationally and a dramatically discounted price compared to our domestic competitors in United launch Alliance. We've looked at this vehicle and this company as a company that needs to be profitable, that needs to sustain itself and we've looked at the vehicle, both the design and importantly the operations. And if you think about all the things that go into launching a successful mission and you work on every bit of that - you don't just work on a valve here or you work on a piece of structure there - but you think about the facilities that are involved, so it's those kind of innovation. Let me give you a couple of quick examples: So the vehicles in the United States - at least - use a mobile service tower, which is a high rise office building where you build the launch vehicle, that's right on top of the launch deck. And by the way it has to roll back for launch. So there is nothing inexpensive about this mobile service tower, its a high rise office building on wheels that needs to get out of the way, before you fly by. We use a horizontal approach - which the Russians use as well, by the way. So were not particularly innovative there - but its pulling all of those kinds of pieces together, that allow us to fly Falcon 9 for a nice price reduction in the industry. But the real key to changing things dramatically is this concept of re-usability. That's when you go from flying a 60 million dollar mission to flying a 5, 6 or 7 million dollar mission. That's really where the change is. But you have to have the business to start. I don't know if I answered your question, I gave it a shot.
Viewer question
Actually I think its a great question. I was expecting something dramatically different from you, but But I appreciate the lob. Not everybody believes that humans need to leave earth. Not everybody believes humans need to study science in low earth orbit on the International Space Station.
It was a good day. We accomplished all of our primary mission objectives: satellites were deployed successfully, our client/customers already receiving data from their satellites, in this case Cassiope. It was really a great day. We demonstrated a lot of new technology successfully including the Merlin 1-D engine, the new stage separation system, the much taller rocket which structurally performed very well, the 17 foot diameter fairing which separated successfully, no problems there. Overall, really great. There were a couple of optional things we were trying to do which were relight of the upper stage and of the boost stage. In the case of the upper stage relight, we initiated relight and the system encountered an anomaly and did not complete the relight. We believe we understand what that issue is and should have it addressed in time for the next flight of Falcon 9. Other than that, the ascent phase was excellent. That final burn was actually just a sideways burn, just to check propellant residuals.
Going to the boost stage, the boost stage actually initiated two burns. One was lighting three engines, doing a supersonic retro-propulsion. I believe the first time that any rocket stage has attempted to do a supersonic retro-propulsion. It lit 3 of the 9 engines and completed that maneuver well. Came back through atmospheric re-entry and survived coming back into the atmosphere without a problem. Previously our first stages always essentially exploded upon re-entering the atmosphere due to the extreme forces they encounter. As a result of the retro burn, we made it through. We controlled the stage with a fair bit of precision to a landing point with the center engine burn. That relight also went really well.
However, we exceeded the roll control authority of the attitude control thrusters. So in this case, the boost stage did not have landing gear which helps to essentially stabilize the stage like fins on an aircraft or empennage section on an aircraft. The stage actually ended up spinning to a degree that was greater than we could control with the gas thrusters and it centrifuged the propellant. It caused the boost stage to run out of propellant because of the centrifuging effect before hitting the water. It hit the water relatively hard. We recovered portions of the stage. The most important thing is that we now believe we have all the pieces of the puzzle. If you take the Grasshopper tests, where we were able to do a precision takeoff and landing of a Falcon 9 first stage and you combine it with the results from this flight where we were able to successfully transition from vacuum to hypersonic, through supersonic, through transonic and light the engines all the way through and control the stage all the way through. We have all the pieces necessary to achieve a full recovery of the boost stage. We are really excited about that. I think that we will achieve that next year. That's what actually got me the most excited about this flight. I think that now I have all of the pieces of the puzzle necessary to achieve full and rapid reusability of the Falcon 9 boost stage.
Before deciding what the issue was, I think we want to have a bit more time to read the data, before coming to a conclusion. We essentially saw the engine initiate ignition get up to about 400 psi and then it encountered a condition that it didn't like. It may have been due to an extended spin start, maybe, but this is speculative. So it initiated an abort of the restart. But we have all of the data from the restart. So I am confident that we will be able to sort it out and address it before the next flight. It's nothing fundamental. On the test stand, we have restarted the Merlin 1-D engine in some cases dozens of times. We just have to iron out some slight differences of it operating in vacuum.
Yeah, absolutely.
The ascent burns, basically the first stage burn and the second stage burn were all full duration and those actually went likely slightly better than expected. The second stage hit its target velocity vector a few seconds early which means that the stage was actually performing a little better than expected, probably higher specific impulse than anticipated. So the only anomalies that we are aware of thus far are the second stage restart where we turn the stage sideways and we are going to do a propellant depletion burn and the third firing of the first stage when it centrifuged the propellant just before hitting the ocean.
It actually went better than expected. It was incredibly smooth. The ascent was picture perfect. I stood outside watching it, in full, just before stage separation and such an incredibly clear day too if you were watching it first hand. You could actually see the whole rocket go to space, I mean literally exit the atmosphere. When you looked at the smoke trail, it's more like a water trail actually, you can see where the atmosphere ends because the engine keeps firing in the same way and then suddenly the water vapor trail ends and that's where the atmosphere ends. Well, it doesn't end but it transitions to ratified gas. Florida's hazy and you can't see what's going on. This was ultra-clear.
I'll give you some numbers but I would just check them with my team before saying that there are definitely accurate. I think that we are at 327km perigee and 1495km apogee. But let's just double check that before, because I'm kind of just quoting off the cuff here.
We effectively lose, in terms of performance... It really depends on what we want to do with the stage if we were to do an ocean landing or a return to launch site landing. If we do an ocean landing, the performance hit is actually quite small at maybe in the order of 15%. If we do a return to launch site landing, it's probably double that, it's more like a 30% hit (i.e., 30% of payload lost).
We believe we're on track to launch SES next month. There might be a few extra weeks just to make sure that we are confident about the second stage restart. From a hardware stand point, we are ready to go with SES next month. And then with a steady cadence of vehicles thereafter. The SES rocket, the Falcon 9 rocket that will launch SES, is actually at Cape Canaveral in the hangar right now. It's the first time that we have actually had rockets at both launch sites in SpaceX history. It's also actually the first time that we had both stages firing at the same time. We had the upper stage continuing its orbit burn and then the first stage doing a re-entry burn.
As far as the safety aspect of the return to launch site of the first stage that's part of why we want to do it first in the ocean just to make sure that things will be fine. For any landing area that we would have, the landing ellipse, the sort of error that the stage could encounter would be an unpopulated region. So we would aim to have a landing site that's unpopulated with a radius of a couple of miles (which can be achieved in Cape Canaveral and Vandenberg).
It's rare to do a deorbit burn of the upper stage, that's unusual in the rocket world, but we probably would have the ability to do that in some cases. For low Earth orbit missions the stage would encounter a small amount of atmospheric drag and eventually reenter and burn up. For the commercial missions to geostationary orbit we do a shorter coast than what we just did but we coast for a little bit and then restart once you get close to the equator. In that scenario, restart is important for those missions. We can technically do them without a restart, we can do them as a single burn, but it means the satellite has to do more work to change the plane of its orbit to equatorial. So we can do it either way, but the one which is the minimum work for the satellite does require restart. But, as I mentioned, we've restarted the Merlin, we've taken a single Merlin engine and restarted it literally dozens of times, so it's not a question of can this engine restart, we just need to iron out what were the differences between restarting in vacuum and microgravity verses restarting on the ground.
The next two launches, we are going to gather data from the first stage but we are not going to attempt to recover it because we committed to give the customers on the next two flights maximum performance of the rocket. When we first saw these flights, we didn't reserve enough performance to recover the first stage. So we don't expect to recover the first stage the next two flights but we do expect to get good re-entry data again. The next recovery attempt for the first stage will be the fourth flight of this version, so three flights from now.
We have two geostationary flights: SES and Thaicom and then we have got the orbital resupply mission for NASA, the CRS flight and it's on that CRS flight that we are going to try to bring the first stage back. We are hoping to put the landing legs on that stage. It's still debatable whether at that stage, we will land with landing legs in the ocean or land with landing legs on land. Either way, we do want it to have the landing legs on.
The most revolutionary thing about the new Falcon 9 is the potential ability to recover the boost stage which is almost three-quarters of the cost of the rocket. That's the most important thing about it. There are other improvements we have made to increase design reliability. For example, with stage separation, we have gone from nine attach pinnings and three pistons to just three pistons with integrated attach pinnings. So it goes from twelve failure points down to just three on the stage separation. I think that's an improvement in reliability. It was also the first time that we were flying the 17 foot diameter fairing. So proving that that fairing works is very important for our satellite customers. That fairing is capable of taking the biggest satellites in the world.
And then of course, we proved out the Merlin 1D engine and having a much sort of longer rocket which has more complicated bending modes and making sure that the control system can deal with all of that. So we accomplished a lot today. I am really happy about the results. We have a little bit of work to do obviously. But all in all I think that it's been a great day.
Yes that's the plan (i.e., to have landing legs). We are not going hold up that flight for landing legs. So if landing legs end up being delayed for any reason then we won't hold up the flight for that. But the full plan is to have landing legs on that mission. The schedule for that mission is mostly governed by upgrades to the Dragon spacecraft. We have an upgraded avionics system and we are able to provide a lot more power to NASA for powered cargo. It essentially triples, I think, the amount of powered cargo that NASA can have. So I think that's what is driving that schedule. It's a high priority for us to get that mission launched as soon as we can. It looks like probably sometime in February most likely.
We have actually been working with Air Force range safety and the FAA to identify landing locations at Cape Canaveral and we have identified a few. I don't think that we are quite ready to say what those locations are but they are kind of out on the tip of Cape Canaveral, on the eastern most tip of Cape Canaveral. It's great working with both Air Force range safety and the FAA. They have actually been quite supportive of the whole thing. You need a (FAA) license and we expect to get it.
We actually do have some great video of the re-entry. It's coming back. It's actually on the boat or boats, I should say. So we don't have that. We should be able to post that maybe that later this week. There's some pretty cool video. In terms of components, I think we have... Bear in mind this is coming from: there is a fast boat and then there is a bigger slow boat and then it goes to mission control and then to me. There is like four levels of broken tails going on here. Take this with a grain of salt. But the latest I heard is that they were able to recover the inter-stage, a number of the components from the engine bay, and some of the composite overwrap pressure vessels. That's all I know at this point. There may be more.
I think that the most important thing that being able to launch from Vandenberg and the Cape gives us is the ability to reach any orbit. So we can go to any inclination at this point and for mid-inclination missions as you mention, like going to the space station orbit, we could conceivably do space station missions from either the Cape or Vandenberg. Our default plan is to that from the Cape. But if there was, let's say some terrible storm at the Cape, a force 5 hurricane or something, that damaged the Cape launch facilities, we could in an emergency transition to launching and re-supplying the space station from Vandenberg. I think that it's good to have that optionality. We are continuing forward with a third launch site which is likely to be Texas but we are still waiting for all of the final approvals. Within the Cape, we are going to be expanding our activities and hopefully, you know once this sort of silliness around Pad 39A is resolved (chuckles), hopefully, we will be able to have two launch pads at the Cape. That will enable us to focus our Air Force and intelligence missions on Pad 40 and kind of civil space missions for NASA (cargo resupply, astronauts transport and science missions) from Pad 39A. Hopefully, that's what happens there.
It (i.e. the Falcon 9 version 1.1) definitely informs the Heavy development. The Falcon Heavy is essentially the Falcon 9 with two additional boost stages as strap on boosters. So it's the same engines that we use, very similar airframe, the airframe will be slightly optimized because of the fact that it is a side booster but the avionics will be the same as the Falcon 9 first stage. How we control the whole thing will be very very similar. Hopefully, once the three boost stages separate, they will come back and land individually and they will behave just like the Falcon 9 boost stage. All three of them will come back hopefully and land on three separate pads and we'll join them back together for a future flight and launch them.
We are expecting to complete the SES and Thaicom missions in the next 2 to 3 months. SES hopefully in about a month and then Thaicom, a month or two after that and then the NASA CRS launch which is when we would hopefully have the landing legs on by early next year. In terms of (Falcon) Heavy testing, we are just finishing the Falcon Heavy test stand at McGregor and putting the final touches on that. One thing that I should mention is that even though Falcon Heavy will be three times the thrust of Falcon 9, it will actually probably be quieter for people in Waco or in surrounding areas because the Falcon 9 test stand is up on a tall tripod whereas the Falcon Heavy stand is buried in the ground. It sort of goes down. So there will probably be less sound transmitted even though it's three times the thrust. That will be a very exciting test firing to watch and we are hopefully going to have one of those done, I am guessing, in the second quarter next year.
Actually, the launch site looks like it's in great shape with the exception of some air conditioning ducts that clearly need to be replaced. The fairing air condition ducts got zapped but the strong back and the erector and the stand itself look like they're in great shape. We'll improve the robustness of the air conditioning lines and we'll obviously do a complete checkup to see, you know, is there is anything else that requires additional heat shielding or blast shielding of some kind. Just looking at the video, it looks pretty good. I'm not sure when our next flight is from Vandenberg, I've been so focused on this flight that I haven't been paying much attention to anything that isn't super-near term. It's certainly a huge relief to have successfully delivered CASSIOPE to orbit. It's been weighing on me quite heavily. I'd have to look at our manifest. Sorry, my apologies for not having that information.
Our goal is to recover the first stage on all CRS flights and really on most flights. The next two flights are somewhat of an exception. When we negotiated these deals, we didn't have much bargaining power. It was before we obviously flown this version of the Falcon 9 successfully. So we kind of agreed to give up all performance on the rocket and not reserve anything for reusability. But going into the future, with future contracts, with a few exceptions, we have reserved enough performance to recover the stage. It's not just the CRS flights, it should be most flights after these next two (flights). In terms when we actually re-fly the stage, it's going to depend on what condition the stage is in and obviously getting customers comfortable with that. So it's difficult to say when would actually re-fly it. If things go super well then we would be able to re-fly a Falcon 9 stage before the end of next year and that's our aspiration.
We're getting a little offtopic but I'll answer this question. I don't want to go too much into the crew Dragon, or Dragon version 2. We'll definitely do a press event around that, just not today. The launch abort test is planned for next year, approximately Q2. That should be a really exciting test. A pad abort test means you sort of mount it (Dragon) as though it's on the rocket, for those that don't know, and then you fire the escape thrusters, the Super Draco thrusters and it just bolts out of there at 6G. So it's going to go like a bullet and then come back and land. That should be exciting. Probably Q2 next year. There is a whole series of additional tests. At some point, we want to do, kind of a big public unveiling of Dragon version 2.0. We just want to coordinate with NASA obviously. It looks pretty cool, I think. It's meaningfully different from Dragon version 1.
Thanks everyone and I think, many exciting days ahead. We'll keep you informed as there are new developments.
We're making -- we're gonna make a big investment in Germany. In fact, right now, Germany is our top focus in the world. I'll tell you why -- the reason is that this is a big and important market for us. In fact for Tesla Roadster, this was the second-biggest market in the world after the US, and Germany is obviously a place that appreciates engineering and appreciates great automotive engineering in particular, and I feel like, if we can't do well in Germany, that's not a good sign. So it's very important that we do well here. For a very discerning buying public that's used to looking at the best in the world, we definitely have to do everything that's needed to succeed. So, I actually think it's going to be long-term for us. The third-largest market in the world after China, and one of the highest in per capita sales as well. It's also a country obviously where you can go quite fast, which is really cool. In fact I was just driving the Model S on the Autobahn, in one of the unrestricted sections, and it's a lot of fun.
There are a few things that I said I was going to announce. One is that for any buyers of the Model S, we're going to offer a free, optional, high-speed tuning. So whether you bought the car, or will buy the car in the future, if you're someone who likes to ride at the top-speed on the Autobahn, we will do a custom tune of the car to make it feel really great at top-speed. You know, most other parts of the world, driving at over 200 kilometers an hour, you don't have to worry too much about that in most parts of the world. I can tell you that in LA, it's difficult to get above 50 kilometers per hour. But here, it's important, so we want to make sure we take care of that. And we're actually going to send my top engineering team over here to tune it just right for the German road. As I said, this will apply to new cars purchased in the future and will be done for free as a retrofit to existing cars.
The next big thing is that we're making a huge investment in Superchargers ... my team to accelerate the Supercharger deployment as much as possible. So, Germany is actually going to have the second-highest number of Superchargers anywhere outside of the US, and in fact more Superchargers per capita than the U.S. And in fact this is going to happen very rapidly, in fact we're breaking ground right now on the first six Superchargers. And then we're going to rapidly ramp that up to the point where every quarter we'll probably going to double the number of Superchargers all the way through the end of next year. So our goal is by the end of the first quarter, by March of next year, that more than half of the German population is within range of a Supercharger, and that by the end of next year, it's 100%.
Yes, this is indeed part of reason, is that when you go really fast, you need the Superchargers, but more often.
And there's also going to be a power upgrade to the Superchargers, so they'll be at the 135-kilowatt level versus 120-kilowatts in the U.S. And I think there's potential for upgrades beyond that that will take it even further. So the goal with the Supercharger is that when you stop alongside the highway -- and these will be at places where you'd normally stop on a trip, to get fuel, get a bite to eat, or get a snack -- there will be a bunch of locations where you can park your car, plug it in, and then get a bite to eat, hit the restroom, grab a coffee, be on your way, and your car is charged and ready to go. So you can be in and out in twenty, twenty-five minutes, type of thing.
Yes, 200 kilometers should be no problem.
There will also be a navigation upgrade that is coming out over-the-air, probably in December, that will calculate least time to destination. Including taking into account the Supercharger locations. So if you want to get to the destination fastest, it's gonna figure out how fast you should drive, how long you should stop, and navigate you to the Supercharger stations along the way, and then to your ultimate destination, and will calculate the whole route with the least time possible. And it's even going to do things like look up the wind speed on the Internet, and factor that into range. Take into account elevation, wind speed, etc. so it should be very accurate. So that's the big Supercharger investment.
Also a big Service Center investment. We're going to be expanding our Service Center coverage dramatically, in fact even in the next few months, but certainly by the end of next year. By the end of next year, we expect to have probably 80% of Germany within about 100 kilometers of a Tesla Service Station. It's a big investment, and we're going to be hiring a lot of people. And if you know anyone you think would be great to add to the Tesla team, please ask them to submit their information. We're looking for great people -- fast-growing company, lots of opportunity -- and it's a fun work environment and also some other good things.
Those are the three main things that I wanted to announce. And there will be a press release with more detail, that goes out on Thursday morning, that will be spelling out where some of the initial locations will be, and giving maps. But I wanted to tell you guys first ahead of the press. Because really people like yourselves are extremely important to the future of Tesla. We don't have the budget to spend money on advertising, so the only way we're able to grow is by good word of mouth. So to the degree that people that really believe in sustainability, that really believe in the electric car revolution, people like yourselves are very important to the success of Tesla and to the success of electric vehicles in general. There are many people out there that don't believe in electric cars, they thing nothing is going to happen. We have to overcome that negativity, otherwise it's going to be way too slow, and there will be tremendous damage to the environment as a result. So word of mouth is super important, it's vital. And we need you to be able to go out there, and talk to people that you know and say 'Hey, electric cars are ready.' It's time to make it happen. And if the big car companies see that our sales are good, and that we are actually able to take a little bit of market share -- I mean, we're a tiny company, so a drop in the bucket -- but if they see that people are buying these cars, then they will have no choice but to conclude that electric cars are the right way to go, and that will accelerate the transition to sustainable transport.
So every time the Model S is driving down the road and somebody sees it, or a friend gets in and you take them for a ride, and their eyes open wide, and they're like 'Whoa, this is for real, it's not like I read in the papers' [Your customers are the best salesmen!] Exactly -- it's a very important thing. There are lots of naysayers out there, lots of people that say 'electric cars are never gonna happen, we should just be resigned to burning hydrocarbons forever' -- well not forever, until they run out of course -- and then they'll say certain technologies like fuel cells -- and it's like, ah God, fuel cells are so bullshit, it's really rubbish. The only reason they do fuel cells is because, they aren't really believers, it's like a marketing thing. But reality is that, you take a fuel cell vehicle, and you take the best-case of the fuel cell vehicle in terms of the mass and volume required to go a particular range, as well as the cost of the fuel cell system and -- if you took best-case of that, it doesn't even equal the current state-of-the-art in lithium-ion batteries, so there's no way for it to be a workable technology. And then, putting up a huge hydrogen distribution structure is also extremely difficult. And hydrogen is quite a dangerous gas. You know, it's suitable for the upper stage of rockets, but not for cars. [I think most of us saw the film 'Who Killed the Electric Car?'] Yeah, exactly. Did you see 'Revenge of the Electric Car'? So it's really important that we work as fast as possible to accelerate sustainable transport, the sooner it happens, the less environmental damage that will occur, and the world will be in a far better situation. So that's what we're trying do at Tesla, that's really the goal, that's why we put so much time and effort into trying to grow the company. I can also say that every time somebody buys a Model S, they are helping to pay for the mass-market lower-cost car in the future. Every bit of money that we make -- we don't issue dividends, we don't have high salaries -- my salary is one dollar a year -- I spend it well -- I do have shares, but I don't sell them. Yeah, captains should go down with the ship, hopefully it's -- wait a second -- the captain should be the last one to comfortably exit the ship.
Yeah, technically. And -- the official score was 5 stars in every category, but in reality it was more like 5.4. But there is a statistical measure that they provide to all manufacturer, it's usually too technical for public consumption, so they just provide it to manufacturers But it's called the statistical probability of likelihood of injury, and it was the lowest probability of injury of any car ever tested by the U.S. government.
I think it's quite likely that we'd want to bioengineer new organisms that are better suited to living on Mars. Humanity's kinda done that over time by selective breeding - Ya know, cows didn't evolve in the wild - but that's a very slow process that requires hundreds of generations whereas, I think with actual bioengineering we could make that happen a lot faster and maybe with more precision. Ideally, long term - although this is a tricky subject - you'd want to write generics. Meaning, you'd want to create synthetics organisms. Not necessarily completely but, ya know, start with some base and modify stuff.
I think the verdict is in with respect to long term existing in space. Really, mostly about zero-g. In my opinion, certainly enough to get to Mars. Mars is, if you have a low energy trajectory, like a minimum energy trajectory is about 6 months. I think that can be compressed down to about 3 months, and it gets exponentially harder as you go lower than that - 3 to 4. It's important to actually be at that level because then you can send your spaceship to Mars and then bring it back on the same orbital synchronization. Earth and Mars synch up every two years and then they're only kinda in synch for about 6 months. Then, ya know, they're really too far apart. So you've got to be able to go there and back in one go. That's important for making the cost of traveling to Mars an affordable amount. Because, if you think of what's the key thing to establish a colony on Mars, it's the cost per unit mass of sending something to Mars, or the cost per person. At a certain level, if it's too high, obviously there won't be such a thing, but once it gets to a certain level - it's like a reaction, the activation energy is like the economic activation energy of a Martian colony. I mean, right now it's like - I don't know, the last NASA estimate was $500 billion, and that was during Bush the first. So, I would imagine that today's estimate is a trillion. We're not going to go spend a trillion dollars on sending four people to Mars. Right now the cost of going to Mars is beyond what can be afforded, so that's why no-one is going to Mars. Ultimately, in order to establish a colony I think you've got to get the cost down to maybe half a million or less, per person. There's got to be an intersection of sets of people that can afford to go and people that want to go.
When I was in college, I tried to think what are the things that are going to most affect the future of humanity and I wanted to be involved in at least some of those things. I didn't expect to be involved in all of them, but mostly I just wanted to be involved in things that I thought would matter to the future and to be able to look back and say, okay, I did something useful there.
I wouldn't say there was any one particular role model. There was certainly many people that I admired in history. Tesla obviously being one of them. I think it stems from when I had this existentialist crisis when I was a kid and tried to figure out, what's it all about, and none of the books I read seem to actually have a good answer. I read all the religious texts and I read a bunch of philosophy books and they were all quite depressing - particularly the Germans. Actually, when I read The Hitchhiker's Guide To The Galaxy, I thought this is a pretty good one. Just, sort of, to create greater enlightenment over time, that seemed like a good goal. If you don't really know what the meaning of life is, or even really what the right questions are to ask, but if we can improve our understanding of the universe then eventually we can figure out what the right questions to ask is. That's not the meaning of life but it's something.I think it's quite likely that we'd want to bioengineer new organisms that are better suited to living on Mars. Humanity's kinda done that over time by selective breeding - Ya know, cows didn't evolve in the wild - but that's a very slow process that requires hundreds of generations whereas, I think with actual bioengineering we could make that happen a lot faster and maybe with more precision. Ideally, long term - although this is a tricky subject - you'd want to write generics. Meaning, you'd want to create synthetics organisms. Not necessarily completely but, ya know, start with some base and modify stuff.
I think the verdict is in with respect to long term existing in space. Really, mostly about zero-g. In my opinion, certainly enough to get to Mars. Mars is, if you have a low energy trajectory, like a minimum energy trajectory is about 6 months. I think that can be compressed down to about 3 months, and it gets exponentially harder as you go lower than that - 3 to 4. It's important to actually be at that level because then you can send your spaceship to Mars and then bring it back on the same orbital synchronization. Earth and Mars synch up every two years and then they're only kinda in synch for about 6 months. Then, ya know, they're really too far apart. So you've got to be able to go there and back in one go. That's important for making the cost of traveling to Mars an affordable amount. Because, if you think of what's the key thing to establish a colony on Mars, it's the cost per unit mass of sending something to Mars, or the cost per person. At a certain level, if it's too high, obviously there won't be such a thing, but once it gets to a certain level - it's like a reaction, the activation energy is like the economic activation energy of a Martian colony. I mean, right now it's like - I don't know, the last NASA estimate was $500 billion, and that was during Bush the first. So, I would imagine that today's estimate is a trillion. We're not going to go spend a trillion dollars on sending four people to Mars. Right now the cost of going to Mars is beyond what can be afforded, so that's why no-one is going to Mars. Ultimately, in order to establish a colony I think you've got to get the cost down to maybe half a million or less, per person. There's got to be an intersection of sets of people that can afford to go and people that want to go.
When I was in college, I tried to think what are the things that are going to most affect the future of humanity and I wanted to be involved in at least some of those things. I didn't expect to be involved in all of them, but mostly I just wanted to be involved in things that I thought would matter to the future and to be able to look back and say, okay, I did something useful there.
I wouldn't say there was any one particular role model. There was certainly many people that I admired in history. Tesla obviously being one of them. I think it stems from when I had this existentialist crisis when I was a kid and tried to figure out, what's it all about, and none of the books I read seem to actually have a good answer. I read all the religious texts and I read a bunch of philosophy books and they were all quite depressing - particularly the Germans. Actually, when I read The Hitchhiker's Guide To The Galaxy, I thought this is a pretty good one. Just, sort of, to create greater enlightenment over time, that seemed like a good goal. If you don't really know what the meaning of life is, or even really what the right questions are to ask, but if we can improve our understanding of the universe then eventually we can figure out what the right questions to ask is. That's not the meaning of life but it's something.
Mr Chairman, ranking members of the committee, thank you for having me here today. SpaceX was founded to make radical improvements to space transport technology, with particular regard to reliability, safety and affordability. Today it is arguably one of the leading aerospace companies in the world with nearly 50 missions contracted at a value of approximately $5 billion. We've launched our Falcon 9 rocket eight times with 100% success rate, including four launches for NASA, three which docked with the International Space Station and have launched a sophisticated geostationary satellite for the world's leading satellite companies. We are restoring America's competitiveness in the global commercial space launch market as the only US company that has consistently winning head-to-head competitions for launch opportunities at the international level.
With respect to the EELV program, I have five points to make. The first is that the Air Force and other agencies are simply paying too high a price for launch. The impact of relying on monopoly providers since 2006 were predictable and they have borne out. Space launch innovation has stagnated, competition has been stifled and prices have risen to levels that General Sheldon has called unsustainable. When the merge between Boeing and Lockheed's business occurred, the merger promised, in the press release, $150 million of savings. Instead, there were billions of dollars of cost overruns, and a non-recovery breach for the program exceeding 50% of its cost projections.
According to congressional records, in FY14 the Air Force paid an average of $380 million for each national security launch, while subsidizing ULA's fixed costs to the tune of more than a billion dollars per year, even if they never launch a rocket. By contrast, SpaceX's price is well under a $100 million. Meaning a savings of almost $300 million per launch. Which, in many cases, would pay for the launch and the satellite combined. So, if you took something like a GPS satellite which about $140 million, you could actually have a free satellite with the launch. So, our launch plus the satellite would cost less than just their launch. Which is an enormous difference, and we seek no subsidies to maintain our business.
To put this into perspective, had SpaceX been awarded the missions ULA had been under it's recent non-competed 36 core block buy, we would have saved the tax payers $11.6 billion.
Point number two. Competition is coming to the national security launch market. This has been acknowledged, and we are ready to compete for that. In order to be certified as an EELV provider SpaceX had to meet a number of requirements that were never demanded of the incumbent provider. We were required to successfully launch three flights of our upgraded Falcon 9 vehicle, which we achieved in January. Under our EELV certification agreement we've undertaking vigorous engineering reviews with the Air Force. To-date we've delivered more than 30,000 data items to the Air Force and provided total access to our internal systems. We've talked to more than 300 government officials for certification, and we hope to complete that certification this year.
Point number three is that we really believe that robust competition must begin this calendar year. We applaud the early steps the Air Force and NRO have taken to reintroduce competition into the EELV program. In 2012 the Air Force, under direction from the Secretary of Defense, committed to competing up to 14 missions, with 5 missions available for competition this year. Of course, we would have greatly preferred that the Air Force open all of its missions to competition, and we have serious concerns that the 5 missions that will be competed this year will not actually be awarded this year. We recently learned that perhaps only one will be awarded this year.
Point four, with the advent of competition, launch should really be viewed as a commodity and any competition between new entrants and ULA, should properly acknowledge the launch subsidy received by the incumbent. Consistent with federal procurement regulations, and DoD acquisition directives, when a competitive environment exists, the government should use firm fixed price FAR part 12 contracts which properly incent contractors to deliver on time and on budget. That means eliminating the billion dollar annual subsidy to ULA, which creates an extremely unequal playing field.
The final point is that our Falcon 9 and Falcon Heavy launch vehicles are truly made in America. We design and manufacture the rockets in California and Texas, with key suppliers throughout the country and launch them from either Vandenberg Air Force Base or Cape Canaveral Air Force Station. This stands in stark contrast to the United Launch Alliance's most frequently flown vehicle, the Atlas V, which uses a Russian main engine and where possibly half the airframe is manufactured overseas. In light of Russia's defacto-annexation of Ukraine's Crimea region and the formal severing of military ties, "the Atlas V cannot possibly be described as providing assured access to space for our nation when supply of its main engine depends on President Putin's permission." Given this development, it would seem prudent to reconsider whether the 36 core, uncompeted sole-source award to ULA is truly in the best interests of the people of the United States.
I thank the committee for this opportunity and look forward to addressing any questions.
Yeah, absolutely. First, I should mention that the premise of perfect success in not quite correct for ULA. They certainly have a very good track record but the first Delta IV Heavy failed and there was a partial failure of one of the Atlas missions, which resulted in a satellite having reduced life. So, it's certainly a good, but it's not quite correct to say it's - it would be a flawed premise to say that it's perfect. What I think is a logical sort of thing going forward is if there would be two families of rockets but not three families of rockets. Currently ULA has both the Atlas and the Delta, but those are redundant. We don't need both of those rocket families, and I think it would make sense to - for the long-term security of the country - to phase out the Atlas V, which depends on the Russian engine, and have ULA operate the Delta family, SpaceX operate the Falcon family, giving the Defense Department assured access to space with two completely different rocket families. I think that's the logical thing to do, going forward, and I think it would be the best thing, in every respect, for the country.
I think, as a country, we've generally decided that competition in the free market is a good thing and that monopolies are not good, and it's interesting to note that from the point from which Boeing and Lockheed's launch business merged - the point where they stopped being competitors - the costs doubled since then. I think the reality is, when competition is introduced - reliability is a key factor in competition. That would be a deciding factor in who wins what launches. It doesn't become less important, it becomes more important, but the cost to the US tax payer will drop substantially. I think they would drop, at least to the level that they were before Boeing and Lockheed became a monopoly in the launch business and perhaps even better than that. "And frankly, if our rockets are good enough for NASA, why are they not good enough for the Air Force? It doesn't make sense."
The Air Force certification process appears to be going quite well and we're not aware of any issues that would prevent us from being certified to fly missions - completing that certification this year - we are concerned about any delays in the contracting and hopefully those delays don't materialize. As I mentioned in my earlier testimony, I think in light of recent events on the international stage, it may be wise to consider whether procuring the Atlas as part of the 36 core block buy, which is a five year buy - as mentioned earlier by Mr Gass, they only have a two year supply of engines, and yet this contract is a five year contract for the 36 cores. So, if there are any sanctions or if there is any issue with the supply of those engines, there will not be assured access to space for the Atlas V.
I'm highly confident that we'll be able to, yes.
Absolutely.
I would, although I'd like to point out that there were two highly publicized failure investigations, one for Delta IV Heavy, one for Atlas. The Air Force conducted failure investigations. ULA has a very good track record. It's not quite as good as 68 perfect launches.
Right, the primary mission which was to deliver the CASSIOPE satellite, was 100% successful. There was a secondary satellite that was an optional objective, that was not part of the primary mission. But as I said, if you accept ULA's definition of perfect success then that mission was perfectly successful.
Sure. Well, the reality today is that there's a steady cadence of Air Force and NRO missions every year. So, you don't really have the wide difference from one year to the next that you had in the past. So, I think the prior justification for needing that subsidy for stability is no longer there as there is a stable launch demand from the Air Force and intelligence community. Secondly, I go back to the point that there's really not a need for ULA to maintain two families of rocket - both the Delta and the Atlas - and given that the Atlas is dependent upon a Russian main engine which can be cut off at any time, the logical thing to do is to eliminate the Atlas family, have the Delta and Falcon family and that will provide the greatest amount of assured access, and the greatest reliability and the cost savings that the government is looking for.
I think fixed price competition is the better way to go when - when there's competition, the logical thing to do is to go for fixed price because otherwise if you compete it and it's cost-plus then it gives the companies the opportunity to raise their prices effectively as their costs grow relative to the competition.
Certainly. I think that the logical thing to do is to do a fixed price competition for the basic vehicle and to the degree that there are mission-unique requirements - which is a fairly small part of the mission - that that would be cost-plus. So, if the Air Force says, well, there's a unique national security satellite, it's going to require these additional changes to the rocket or to the mission, or it's going to require priority, then just that incremental piece would be logical to make cost-plus, but the vast majority of the contract would be fixed price.
Mr Chairman, ranking members of the committee, thank you for having me here today. SpaceX was founded to make radical improvements to space transport technology, with particular regard to reliability, safety and affordability. Today it is arguably one of the leading aerospace companies in the world with nearly 50 missions contracted at a value of approximately $5 billion. We've launched our Falcon 9 rocket eight times with 100% success rate, including four launches for NASA, three which docked with the International Space Station and have launched a sophisticated geostationary satellite for the world's leading satellite companies. We are restoring America's competitiveness in the global commercial space launch market as the only US company that has consistently winning head-to-head competitions for launch opportunities at the international level.
With respect to the EELV program, I have five points to make. The first is that the Air Force and other agencies are simply paying too high a price for launch. The impact of relying on monopoly providers since 2006 were predictable and they have borne out. Space launch innovation has stagnated, competition has been stifled and prices have risen to levels that General Sheldon has called unsustainable. When the merge between Boeing and Lockheed's business occurred, the merger promised, in the press release, $150 million of savings. Instead, there were billions of dollars of cost overruns, and a non-recovery breach for the program exceeding 50% of its cost projections.
According to congressional records, in FY14 the Air Force paid an average of $380 million for each national security launch, while subsidizing ULA's fixed costs to the tune of more than a billion dollars per year, even if they never launch a rocket. By contrast, SpaceX's price is well under a $100 million. Meaning a savings of almost $300 million per launch. Which, in many cases, would pay for the launch and the satellite combined. So, if you took something like a GPS satellite which about $140 million, you could actually have a free satellite with the launch. So, our launch plus the satellite would cost less than just their launch. Which is an enormous difference, and we seek no subsidies to maintain our business.
To put this into perspective, had SpaceX been awarded the missions ULA had been under it's recent non-competed 36 core block buy, we would have saved the tax payers $11.6 billion.
Point number two. Competition is coming to the national security launch market. This has been acknowledged, and we are ready to compete for that. In order to be certified as an EELV provider SpaceX had to meet a number of requirements that were never demanded of the incumbent provider. We were required to successfully launch three flights of our upgraded Falcon 9 vehicle, which we achieved in January. Under our EELV certification agreement we've undertaking vigorous engineering reviews with the Air Force. To-date we've delivered more than 30,000 data items to the Air Force and provided total access to our internal systems. We've talked to more than 300 government officials for certification, and we hope to complete that certification this year.
Point number three is that we really believe that robust competition must begin this calendar year. We applaud the early steps the Air Force and NRO have taken to reintroduce competition into the EELV program. In 2012 the Air Force, under direction from the Secretary of Defense, committed to competing up to 14 missions, with 5 missions available for competition this year. Of course, we would have greatly preferred that the Air Force open all of its missions to competition, and we have serious concerns that the 5 missions that will be competed this year will not actually be awarded this year. We recently learned that perhaps only one will be awarded this year.
Point four, with the advent of competition, launch should really be viewed as a commodity and any competition between new entrants and ULA, should properly acknowledge the launch subsidy received by the incumbent. Consistent with federal procurement regulations, and DoD acquisition directives, when a competitive environment exists, the government should use firm fixed price FAR part 12 contracts which properly incent contractors to deliver on time and on budget. That means eliminating the billion dollar annual subsidy to ULA, which creates an extremely unequal playing field.
The final point is that our Falcon 9 and Falcon Heavy launch vehicles are truly made in America. We design and manufacture the rockets in California and Texas, with key suppliers throughout the country and launch them from either Vandenberg Air Force Base or Cape Canaveral Air Force Station. This stands in stark contrast to the United Launch Alliance's most frequently flown vehicle, the Atlas V, which uses a Russian main engine and where possibly half the airframe is manufactured overseas. In light of Russia's defacto-annexation of Ukraine's Crimea region and the formal severing of military ties, "the Atlas V cannot possibly be described as providing assured access to space for our nation when supply of its main engine depends on President Putin's permission." Given this development, it would seem prudent to reconsider whether the 36 core, uncompeted sole-source award to ULA is truly in the best interests of the people of the United States.
I thank the committee for this opportunity and look forward to addressing any questions.
Yeah, absolutely. First, I should mention that the premise of perfect success in not quite correct for ULA. They certainly have a very good track record but the first Delta IV Heavy failed and there was a partial failure of one of the Atlas missions, which resulted in a satellite having reduced life. So, it's certainly a good, but it's not quite correct to say it's - it would be a flawed premise to say that it's perfect. What I think is a logical sort of thing going forward is if there would be two families of rockets but not three families of rockets. Currently ULA has both the Atlas and the Delta, but those are redundant. We don't need both of those rocket families, and I think it would make sense to - for the long-term security of the country - to phase out the Atlas V, which depends on the Russian engine, and have ULA operate the Delta family, SpaceX operate the Falcon family, giving the Defense Department assured access to space with two completely different rocket families. I think that's the logical thing to do, going forward, and I think it would be the best thing, in every respect, for the country.
I think, as a country, we've generally decided that competition in the free market is a good thing and that monopolies are not good, and it's interesting to note that from the point from which Boeing and Lockheed's launch business merged - the point where they stopped being competitors - the costs doubled since then. I think the reality is, when competition is introduced - reliability is a key factor in competition. That would be a deciding factor in who wins what launches. It doesn't become less important, it becomes more important, but the cost to the US tax payer will drop substantially. I think they would drop, at least to the level that they were before Boeing and Lockheed became a monopoly in the launch business and perhaps even better than that. "And frankly, if our rockets are good enough for NASA, why are they not good enough for the Air Force? It doesn't make sense."
The Air Force certification process appears to be going quite well and we're not aware of any issues that would prevent us from being certified to fly missions - completing that certification this year - we are concerned about any delays in the contracting and hopefully those delays don't materialize. As I mentioned in my earlier testimony, I think in light of recent events on the international stage, it may be wise to consider whether procuring the Atlas as part of the 36 core block buy, which is a five year buy - as mentioned earlier by Mr Gass, they only have a two year supply of engines, and yet this contract is a five year contract for the 36 cores. So, if there are any sanctions or if there is any issue with the supply of those engines, there will not be assured access to space for the Atlas V.
I'm highly confident that we'll be able to, yes.
Absolutely.
I would, although I'd like to point out that there were two highly publicized failure investigations, one for Delta IV Heavy, one for Atlas. The Air Force conducted failure investigations. ULA has a very good track record. It's not quite as good as 68 perfect launches.
Right, the primary mission which was to deliver the CASSIOPE satellite, was 100% successful. There was a secondary satellite that was an optional objective, that was not part of the primary mission. But as I said, if you accept ULA's definition of perfect success then that mission was perfectly successful.
Sure. Well, the reality today is that there's a steady cadence of Air Force and NRO missions every year. So, you don't really have the wide difference from one year to the next that you had in the past. So, I think the prior justification for needing that subsidy for stability is no longer there as there is a stable launch demand from the Air Force and intelligence community. Secondly, I go back to the point that there's really not a need for ULA to maintain two families of rocket - both the Delta and the Atlas - and given that the Atlas is dependent upon a Russian main engine which can be cut off at any time, the logical thing to do is to eliminate the Atlas family, have the Delta and Falcon family and that will provide the greatest amount of assured access, and the greatest reliability and the cost savings that the government is looking for.
I think fixed price competition is the better way to go when - when there's competition, the logical thing to do is to go for fixed price because otherwise if you compete it and it's cost-plus then it gives the companies the opportunity to raise their prices effectively as their costs grow relative to the competition.
Certainly. I think that the logical thing to do is to do a fixed price competition for the basic vehicle and to the degree that there are mission-unique requirements - which is a fairly small part of the mission - that that would be cost-plus. So, if the Air Force says, well, there's a unique national security satellite, it's going to require these additional changes to the rocket or to the mission, or it's going to require priority, then just that incremental piece would be logical to make cost-plus, but the vast majority of the contract would be fixed price.
It looks like everything looks great in terms of the ascent phase of the mission. The rocket flight was perfect as far as we could tell and Dragon deployment went well. We had some slight initial challenges with Dragon with respect to enabling some of the thruster quads but those have been resolved. So it looks like everything is good on the Dragon front. For the rocket boost stage reentry, we have good data down to a pretty low level. To roughly around Mach 1.1 everything looks fine, and we're waiting for additional data to see how the potential landing burn went, but it was a very heavy sea state condition so I wouldn't give high odds that the rocket was able to splashdown successfully.
I don't know of anything.. do we have anything on the.. it's obviously.. NASA's our customer here so we defer to NASA as to what cargo is manifested, but I don't think we put anything onboard ourselves.
We were a little delayed in the launch.
Maybe I wasn't speaking clearly. I said I wouldn't give high odds. The sea state is quite heavy. I heard reports of 15 to 20 foot wave high. It's really pretty crazy out there. In fact the boats weren't able to get particularly close because of the heavy seas. I think it's unlikely that the rocket was able to splashdown successfully, but I think we'll still get good data from the plane telemetry and we should get that pretty soon. As soon as we are able to look at that data we'll be able to provide some more information but I would consider it a success in the sense that we were able to control the boost stage to a zero roll rate, which is previously what has destroyed the stage - an uncontrolled roll where the on-board nitrogen thrusters were not able to overcome the aerodynamic torque and that sort of spun up. This time, with more powerful thrusters, and more nitrogen propellant, we were to null the roll rate. So that's a bit of good news there, and of course, we were able to show that on ascent the legs don't have any negative impact and that we were able to come back through hypersonic velocity. We don't yet have the data through transonic but we have it through the max dynamic forcing coming through - what's called max-Q - we have information on the rocket coming through max-Q okay. I'm quite anxious obviously to find that out and it'd be awesome if - as far as it gets, that data we'll be able to use to flow back into the next flight, with an increased probability of a successful recovery. "We're probably going to have to iterate our way there I think."
I should mention, one of the side points is, we did a longer coast and restart of the upper stage. This was a very optional thing, just to see what our propellant residuals were and what the environment would be on the stage during a depletion shutdown. The upper stage coasted for about 35 minutes and then restarted for a few seconds, and went to essentially zero liquid oxygen level with about 0.15% of propellant mass in fuel remaining, which is very close to our target. That's helpful for us to reduce the uncertainty associated with propellant residuals and thus improve the mission performance margin calculation on future missions.
Well, right now I'm on the phone, so.. when I left about 15 minutes ago, everything was looking good. There was an isolation valve that feeds two of the thruster quads and that valve was not responding, so we went to the backup valve and that one worked fine. So, when I left everything was looking good for all thrusters enabled on the vehicle. So, as far as I know, we're on track to make that burn.
We think we can probably still do ten, but it's a bit too early to tell if all ten will go this year. The main constraint is actually on vehicle production, which all boils down to this one particular part - an injector casting and we think we've resolved that particular issue, which should unlock quite a high rate of increased production and bottom line is, I think we'll do ten or something very close to ten this year. Obviously, it's a launch a month or slightly better than a launch per month. We don't yet know enough to say whether there's any commonality between this particular valve and the valve issue in the one that occurred previously. I don't think it's the same, and one has to be careful about making snap judgements until one has all the information. So, I don't think it's the same but we don't yet know.
I feeling pretty excited. This is a happy day. "Most important of all is we did a good job for NASA. I always think, did we do a good job for our customer? Everything else is secondary to that." It seems like we've done the job we were contracted for, or at least thus far, it hasn't hooked up with the space station yet, but number one I'm super happy that we have made progress so far for our NASA customer. On top of that, I'm also excited that we got good data through max dynamic pressure of the reentry of the boost stage, and even though we probably won't get the stage back, I think we're really starting to connect the dots of what's needed. When you combine the take off and landing yesterday of the flight design landing legs and the greater progress of the boost stage on this flight today, there's just only a few more dots that need to be there to have it all work and "I think we've got a decent chance of bringing a stage back this year, which would be wonderful." What we've done thus far is just evolutionary improvements, but that holds the potential for something more significant.
I know what happened.. I thought that question might be asked, so I looked into it. We sprayed a bunch of water around the pad and, essentially what happened is we splashed dirty water on ourselves. It's a little embarrassing, but no harm done.
There is a step beyond simply reusing something that is important. There's some conditions on reuse in order to make the reuse have a big effect on the space industry, which is that the reuse must be both rapid and complete, like an aircraft or a car or something like that. If you had to disassemble and reassemble a car and replace a bunch of parts in-between driving it would make it quite expensive. It's true that we don't just have to recover it, we have to show that it can be reflown quickly and easily with the only thing changing being reloading propellant and other, basically the equivalent of refueling. The vehicle is designed for that. Ya know, the unfortunate thing with the shuttle was that the original design for the shuttle was fairly well suited for good reuse but then the requirements changed and made it very difficult to reuse efficiently. So, as long as we're able to hold to our requirements I think we'll be able to achieve the rapid and essentially complete reuse. What I'm hoping will occur, and I'm feeling a little bit more optimistic about it, is that this year at least we'll be able to recover the rocket booster. I'm not sure we'll be able to refly it this year, but I think reflying it next year is likely if we recover it this year. That will complete the picture, at least as far as the boost stage is concerned.
I don't actually know the exact number, I think it's about 400 to 500 km downrange, away from the cape, essentially, and then the nearest shore is, I think, 200 to 300 km. That's the nominal splashdown point.. which it was headed for I should mention. It was headed quite precisely for the target splashdown point, so that's.. umm, yeah.
I have to head back to the control room as I have some telemetry to look at, so I'll only be on for another two minutes or so.
From the SpaceX side of it, there were a fair bit of new things with this rocket and with the Dragon avionics. This was quite a substantial revision of Dragon avionics, for example, a new software the accompanied it, and of course the rocket had the landing legs and improved nitrogen thrusters and a few others things. It was definitely not ideal. In the future we want to try to get to launching exactly on time without any delays and definitely get away from having delays. That's not our aspiration. But I do think the teams did a great job of responding to the various issues and I'm certainly very proud of what they've done.
Sure, I'll answer that question and then I'm going to have to jump off the call. The Orbcomm launch is expected to happen in the next 4 to 6 weeks and we want to, obviously, make sure we review carefully the data from this launch because, although everything went fine, we always review the data to see if there were any near miss issues that need to be looked into and corrected. We don't know of anything yet, but we want to make sure of that. Regarding the F9R, we're going to have.. really, we're going to keep doing tests at our McGregor test site near Waco with the F9R stage. So what we have at McGregor in Texas is what we call F9R-Dev-1 which is, development unit one. There's also dev-2. So, one of those will be at McGregor and one of those will be at Spaceport America in New Mexico. Anything we can test at a relatively low altitude, below around 10,000 feet, we'll continue to do in Mcgregor, and then the high altitude stuff where it's going ex-atmospheric, and going to 300,000 feet, we'll be doing in New Mexico because we need a much better clear area. I would expect those tests to be.. we'll continue refining the technology over time because you'll recall the question that was asked earlier, reusability only matters to the degree that it's rapid and complete otherwise it's reusability but you don't get the equivalent economic benefit that has the huge potential to open up spaceflight. Alright, thanks for the question.
Hello everyone, thanks for coming on short notice. There's two things I want to talk about today. I'll start off with the landing of the boost stage. I'm happy to confirm that we were able to do a soft landing of the Falcon 9 boost stage, in the Atlantic, and all the data we've received back shows that it did the soft landing and was in a healthy condition after that. It does look like it was - that the stage was subsequently destroyed by wave action. The seas were very heavy. It was like 15 to 20 foot seas. We suspect the stage was destroyed due to the - essentially, the stormy seas, but the data is very clear that - it shows a soft landing, it shows deployment of all the legs, and the stage was in a safe state in the water. We also have a video feed, although the link was very weak. So, for the video feed, we're trying to clean the video feed up and have it be something that - where you could make sort of sense of it - and we're going to clean it up as much as we can on the SpaceX side and then we're going to post it on our website and try to crowd source - to see if people out there can make it look even better. I know there are people out there who are really good at fixing video streams.
I think that's a really huge milestone for SpaceX, and certainly for the space industry. No-one has ever soft landed a liquid rocket boost stage before, and I think this bodes very well for achieving reusability. As people have probably heard me say, I think what SpaceX has done thus far is evolutionary but not revolutionary. I think if we can make - if we can recover the stage in-tact and relaunch it, the potential is there for a truly revolutionary impact in space transport costs. The cost of propellant is actually only about 0.3% of the cost of the rocket, or of a mission. So, if the mission costs $60 million, the cost of propellant is only $200,000. There's potential there for ultimately a hundred fold improvement in the cost of access to space. I think, with the information we've learnt from this flight, we know we can soft land the rocket and we're taking some additional steps with the upcoming flight, which will be a commercial mission for Orbcomm, to have a much greater probability of getting to the stage in time and recovering it. We're securing much bigger boats this time. Unfortunately.. I think we called every boat on or around the east coast above a certain size and it turns out most of the boats that can take really heavy seas are actually in the gulf and elsewhere but apparently not in the greater Florida area. This time we're going to have much greater capability boats and I think we'll also - we kinda got unlucky that we essentially landed the stage in the middle of a big storm. Hopefully this time we'll not have to do that. It'll also be splashing down, or landing in the water, much closer to land than last time. So I think - hopefully, we'll avoid some of the deeper ocean stuff.
"With each successive launch - we have several more launches this year - we expect to get more and more precise with the landing and, if all goes well, I am optimistic that we'll be able to land the stage back at Cape Canaveral by the end of the year." So that's all great stuff and I think, assuming that happens, we should be able to refly the main boost stage in time next year. It's somewhat of a huge day because we've been trying to do this at SpaceX for a long time - it's been twelve years and we finally did it, and now we've just got to bring it back home in one piece. So, are there any questions about that?
Yeah, we've actually worked with air force range safety to identify several locations at Cape Canaveral where we can land the stage. They've actually been really helpful. At first we were concerned that range safety might be obstructionist but they've actually been more than supportive, and there's several places where we can land. It kinda depends on how tightly we can control the landing point and I think if we can demonstrate tight control there is a lot of places at the cape where we can land.
The recovery operations were challenging. We actually couldn't get a boat out there for two days. We literally couldn't find anyone willing to go out there. We even called the Coast Guard, and the Coast Guard wasn't willing to go out. The soonest we could get out there was, as I said, two days latter. We actually have been able to find pieces of the interstage. The interstage is the carbon fiber structure that joins the first and second stage. That's certainly something that you would expect to get destroyed by wave action as it's got that big open hole at the top and waves will come in and blow it apart. We've recovered most of the interstage. We recovered a portion of one leg, and there are a bunch of other little bits and pieces. We've not recovered anything of the main aluminum-lithium airframe.
Probably we need to be comfortably within less than one mile radius error. In principle, we should be able to land with the accuracy of a helicopter. Literally - if you've seen the test flights of the rocket, you can see just how precise it is. I mean, it lands to within less than a meter of its target.
We'll only be doing the water landings until we're confident that we can land with accuracy, and then we'll be transitioning to land landing.
Our pricing right now assumes no reusability. None of our prices are contingent on that. Any reusability we're able to achieve would only allow us to reduce prices from where they are today. The more often we're able to fly and the more often we're able to reuse the stages and the less work they require between flights, the lower the costs can be. The boost stage is roughly 70% of the cost of a launch. So, if we're able to reuse it and refly it with minimal work between flights, and customers are comfortable with that - and it might take a few years for customers to get comfortable with that - then obviously there's as much as - ultimately - a 70% reduction from where things are today.
Well, it's not, strictly speaking, the very first try. The first time we tried to do a soft ocean landing was Falcon 9 flight 6, that was about eight months ago, and that's where we had an issue just before - basically the rocket spun up too much to the high aerodynamic torque coming in from hypersonic velocity. Something we didn't expect is that even small asymmetries on the outer skin of the rocket would cause it to spin up because it's facing such high forces. The nitrogen thrusters on-board the rocket for that flight weren't able to overcome the aerodynamic torque. For this flight we just had, we doubled the thrust of the nitrogen thrusters, and also added a bunch more nitrogen cold-gas propellant. I gave it sort of a 40% to 50% chance of working. I was that percentage I think. I was actually positively surprised by the fact that the legs deployed, the stage landed, it practically sat there for 8 seconds before we lost data. That's a better outcome than I'd expected.
There's no question, compared to the way that rocket flight normally works, where the stages all just come back and crash and there's a bunch of rocket stages at the bottom of the ocean, reusing the stages is much better for the environment. It takes much less energy. You don't have to keep rebuilding your rockets. I think it's - there's certainly a sustainability element there.
We know with certainty that it landed vertically with the legs deployed and in an essentially nominal configuration because we've got the telemetry to show that. There's multiple sources of telemetry. We have sensors on each individual leg. We have multiple inertial sensors, and multiple GPS units on it. They all sort of agree with that conclusion. In terms of it being ready for reflight, if we recover a stage from the ocean it would probably take a couple of months to refurbish it for flight. However, for stages landing back on land near the launch site, in principle we should be able to refly it the same day. So, it's a huge difference. That's why we're really focused on trying to get it back to the launch site. That's what would make the hugest difference on reusability. Obviously, with the space shuttle we had a case where there was a partially reusable vehicle but the space shuttle was not either rapidly nor completely reusable and in-order to achieve a revolutionary improvement in the price of spaceflight, any reusability has to be both rapid and complete.
Absolutely. I think what we'll have to do is do a demonstration reflight without an operational satellite on-board. If that demonstration relight works, and some customers may want more than one, then that's the thing that would really, ultimately, convince them.
I should probably transition to the other news item, which is not as - well, the first one is more positive, this one is a bit negative.
SpaceX has decided to file suit and protest the air force EELV block buy. This is a 36 core sole-source uncompeted procurement that was signed earlier this year, that essentially blocks companies, like SpaceX, from competing for national security launches. Essentially, what we feel is that this is not right. "The national security launches should be put up for competition. They should not be awarded on a sole-source uncompeted basis." It just seems odd that if our vehicle is good enough for NASA and supporting a $100B space station and it's good enough for launching NASA science satellites, for launching complex commercial geostationary satellites, and really every satellite you can imagine, there's no reasonable basis for it not being capable of launching something quite simple like a GPS satellite. This really doesn't seem right to us and we've tried every avenue to try to figure out why is this the case. Is there anything we can do besides file protest, and it seems we're essentially left with the only option, which is to file a protest.
The ULA rockets are, basically, about four times more expensive than ours. So, this contract is costing the US tax payers billions of dollars for no reason and, to add salt to the wound, the primary engine used is a Russian main engine - made in Russia. Moreover, the person who heads up Russian space activities is Dmitry Rogozin, who's on the sanctions list. It seems pretty strange. How is it that we're sending hundreds of millions of US tax payer's money, at a time when Russia is in the process of invading the Ukraine, and it would be hard to imagine someway that Dmitry Rogozin is not benefiting personally from the dollars that are being sent there. On the surface of it, it appears there's a good probably of some sanctions violation, as well. We think this deserves to have a spotlight on it. Let the sun shine on this. As they say, sunlight is the best disinfectant. If everything's fine then I guess that's great, but that seems unlikely to me.
It's being filed in the court of federal claims and there may be others that join but currently it's just SpaceX. Something I want to be real clear about, this is not SpaceX protesting and say that these launches should be awarded to us. We're just protesting and say that these launches should be competed. If we compete and lose, that's fine, but why were they not even competed? That just doesn't make sense. We've heard statements like, well there's this certification process, like okay well, we're most of the way through that certification process, so far there's been zero changes to the rocket, this is a paperwork exercise. Since this is a large multi-year contract why not wait a few months for the certification process to complete and then do the competition. That seems very reasonable to me.
Technically we've done nine Falcon 9 flights. Of the exact configuration that the air force wants, we've done four. All four have completed their mission. They obviously worked. So, yeah.
We did inform the air force just before the press conference. First of all, I should say that it's not as though we're battling the whole air force, this is not - that's not the case at all. We're on very good terms with the vast majority of the air force. Our concern really relates to a handful of people in the procurement area of the air force.
I guess the goal posts were certainly removed with respect to SpaceX compared to when Boeing and Lockheed competed for the EELV contracts. Boeing and Lockheed, that's before they merged their launch business into United Launch Alliance, were awarded a large number of launches - I think maybe 30 or 40 launches under the EELV program - before doing a single flight of the Atlas V or the Delta IV. When SpaceX came along and said, hey, we'd like to compete we were told that we had to have three flights of the exact configuration that the air force would fly before they would allow us to compete. That seems like - it's a bit like pulling up the drawbridge. It's not quite right - but we did that, we actually did that, and after we did the three launches and completed them, a month later we were told, oh, the air force has done this huge sole-source procurement, uncompeted, to Boeing-Lockheed. We're like, but we just did the thing you asked us to do. That seems pretty wrong. I'll say this - normally when there's a huge multi-billion dollar sole-source procurement, there's a justification given. In this case, there was no justification provided for this.
No sorry, I can't answer Tesla questions.
In terms of Falcon 9 and Falcon Heavy, we think probably it's 2/3 Falcon 9, 1/3 Falcon Heavy and, in fact, in our protest we only are protesting launches that we could do. So we're not protesting launches we couldn't do. We're trying to be as fair and reasonable as possible here. In respect to, wouldn't our costs be just as like their costs, I don't know why their rockets are so expensive. They're insanely expensive. On the order of $400 million per flight, all things considered. In our case, our commercial price is $60 million and we expect roughly a $30 million increase due to air force mission assurance requirements and that seems to be bearing out. So yes, it makes our rocket 50% more expensive, but it's doesn't make it 400% more expensive. I think we have the advantage that our rocket was designed to be built in a factory that was designed in the 21st century, whereas Atlas V and Delta IV were designed in kinda the 90s and, in fact, have a lot of legacy hardware that stretches back to the 70s and 80s, even before if you count the RL10. I think the fact that we have a new rocket designed with new manufacturing techniques is very helpful for the cost. I think we have a number of design innovations in the rocket that are also helpful for cost. Some of it's just elementary things like, if you look at the Atlas V, it uses three types of propellant. It uses solid rocket motors. It uses a kerosene first stage and a hydrogen upper stage. Our rocket, Falcon 9, by comparison is a two stage rocket and both stages just use propellant grade kerosene. Right off the bat, to the first order of approximation, our operational costs of launch are a third of what an Atlas V would be.
We only learnt about the big sole-source award in March. It may have been signed in December but it only came to light, interestingly, one day after the senate hearing on EELV launch costs, which seems remarkably coincidental to me. I don't think that's an accident. We've really just had about a month of awareness and we've been somewhat reeling from that news and trying to see, is this real? Is this actually what's going to be the case? When we basically made no progress with discussions with the air force, we thought we have basically no choice but to file the protest. Oh, launch pad. Our primary location is Florida at Cape Canaveral. We've got our pad 40 on the Cape Canaveral side and then pad 39A on the NASA side and we're actually building out 39A with the ability to do the Falcon Heavy. So, probably the first Falcon Heavy launch will be out of the 39A pad which is really an amazing pad with incredible history. It's where Apollo 11 launched from. For the future we expect most launch activity to go out of the Cape Canaveral, Cape Kennedy area. We're also developing a launch pad on the south coast of Texas, near Brownsville. We're waiting on the final environmental approvals for that. We're expecting to get those soon, and we'll probably have that site active in a couple of years. Then, of course, we've got out site at Vandenberg air force base in California for polar launches. As a rough guess, I think we'll have NASA flights will tend to go out of 39A. Air force and intelligence flights out of pad 40. Commercial geosynchronous flights out of the Brownsville location. Then all polar flights, government and commercial, out of Vandenberg. That seems like the logical breakdown.
I do think it's very questionable, particularly in light of international events. It just seems like the wrong time to send hundreds of millions of dollars to the Kremlin.
Allright, thanks everyone.
I think the reasonable thing to do would be to cancel the 36 core contract, wait a few months for certification to complete, then conduct a full competition. I think that would be in the best interests of the american public, not by a small margin but by a huge one.
Well, I think they should.
Alright. Welcome everybody to the Hawthorn headquarters of Space Exploration Technologies. We're here to unveil Dragon version two. Dragon version one is right above your heads. In fact, this is the first Dragon spacecraft that came back from orbit, and you can see the scorch marks on the heat shield, the thrusters that have fired - it's a real spacecraft. I'll start off by telling you a little bit about the Dragon version one, before showing you Dragon version two.
When we first created Dragon version one, we didn't really know how to create a spacecraft. We'd never designed a spacecraft before. So, while there are a lot of interesting technologies in version one, it does have a relatively conventional landing approach - it throws out parachutes to land in the water off the coast of California, after it comes back from the space station, and it does have a life support system, but not one that can last for a long time or carry a lot of people. So, it's a great spacecraft and it was a great proof-of-concept. It showed us what it took to bring something back from orbit, which is a very difficult thing to do. Usually when something comes in from orbital velocity, it burns up in a big fireball.
Going from Dragon version one we wanted to take a big step in technology - really create something that was a step change in spacecraft technology. Some important characteristics of that are the ability to land anywhere on land, propulsively. That's one of things that Dragon version two will be able to do. You'll be able to land anywhere on Earth with the accuracy of the helicopter. Which is, I think, something that a modern spaceship should be able to do. It'll be capable of carrying seven people - seven astronauts for several days. It has an improved version of our PICA heat shield, and it's all-round, I think, really a big leap forward in technology. It really takes things to the next level.
So with that, let's see the Dragon version two. We're going to do a countdown here.
We have an animation that shows you how Dragon version two will work. So let's roll that animation.
"That is how a 21-st century spaceship should land."
A few other things. I'm going to talk about some of the hardware in Dragon, some of the technologies. We're going to roll those out. A few things I should mention that you saw in the animation but we don't have time to show you today are the docking mechanism - the Dragon version two is capable of autonomously docking - either autonomously or under pilot docking with the international space station, and potentially other things, without needing the station arm. The version one makes use of the Canada arm that's on the space station, Dragon version two is capable of docking autonomously without the use of the arm - that's a significant upgrade as well. Although it wasn't shown in the video, Dragon version two still retains the parachutes of Dragon version one, so that - what it'll do when it reaches a particular altitude just a few miles before landing, it will test the engines, verify that all the engines are working, it will then proceed to a propulsive landing. If there's any anomaly detected with the engines or the propulsion system it will then deploy the parachutes to ensure a safe landing even in the event the propulsion system is not working. Even after starting the propulsion system, it can afford to lose up to two engines and still land safely. After the engines are started it deploys the landing legs for a soft landing.
The reason that this is really important, apart from the convenience of the landing location, is that it enables rapid reusability of the spacecraft. You can just reload propellant and fly again. This is extremely important for revolutionizing access to space. "As long as we continue to throw away rockets and spacecraft, we will never have true access to space." It will always be incredibly expensive. You can imagine a scenario in aircraft where aircraft were thrown away with each flight that no-one would be able to fly, or very few, maybe a small number of government customers and the same is true of rockets and spacecraft. That's really why it's so important to be able to land propulsively, land on land, and then be able to reload propellants and take off again.
So, I'll point out some of the technologies here. This is a composite overwrapped titanium sphere and this contains the ultra high pressure helium that pressurizes the propulsion tanks that feed the SuperDraco engine. This is the Draco engine that is a maneuvering thruster, and this is essentially the same as the one that, or very similar to the one that is on Dragon version one. On Dragon version one there is eighteen of these thrusters for maneuvering in space, as well as controlling the trajectory during reentry. We have a bunch of these on version two as well. From a propulsion standpoint, the biggest single change for Dragon version two is the addition of the SuperDraco engines. This is really a super-powered version of the Draco engine. Whereas the Draco engine produces about 100 pounds of thrust, each of these engines produce 16,000 pounds of thrust. Hence the 'super'. They're in pairs, so that if one malfunctions, it's pair can takeover and increase thrust to compensate for the one that's not firing. Each one is in a protective shell, so if anything goes wrong it's contained within that protective nacelle. This will also be the first fully printed engine. This is printed inconel, a high strength alloy, and it'll be the first time that a printed rocket engine sees flight.
This is the propellant tank, a whole series of these spheres are around the perimeter of Dragon v2 and these are also carbon overwrapped titanium and they feed the SuperDraco engines which are operating at a chamber pressure of about 1000 psi, and fed from these series of propellant tanks around the perimeter.
We also have version three of the PICA heat shield. The base heat shield is the third version of our heat shield technology. The first version, obviously, flew on that version one spacecraft up there. We're now about to fly version two and version three. With each one we'll able to make the reusability of the heat shield better - it ablates less as it enters and we're able to get more flights. That's Dragon version two. "Although, it'd be nice to go inside.. but for that, we will need a comically fast set of stairs."
I'm sitting here in the pilot's seat. Pull that down. We've aimed for something with the Dragon version two, for the interfaces and for the overall aesthetic, something that's very clean, very simple. As the pilot, you're able to interaction with the screens overhead to control the spacecraft and then we've got all the critical functions that are needed in an emergency situation as manual buttons. That's what you see in this area here.
Heh, that's a little unwieldy. Alright, that's all a lot easier in zero-gee by the way. So, there you have it. Dragon version two is capable of carrying up to seven astronauts, propulsively landing almost anywhere in the world and something that's designed, as I said, to be fully reusable. So, you could fly this multiple times, allowing for potential dramatic reduction in the cost of access to space.
Thank you.
We're planning to do a Dragon v2 abort test where Dragon v2 will take off from, essentially launch vehicle height, so it simulates something going wrong on the launch pad. The astronauts are just about to take off, it's maybe a few seconds before liftoff, and there's a fire on the launchpad, you need to make sure that the spacecraft can fire the SuperDracos, get to a safe altitude, and then take the astronauts to safety. That test is due to occur later this year, then next year we expect to do what's called the high altitude abort test. That's where we launch the rocket, it's at a very high altitude, very quickly, at something called Max-Q which is the maximum dynamic air pressure, and then we want to initiate an abort. This is considered the hardest time to do an abort. Obviously, these are tests, so they could go wrong. That high altitude abort test is due to occur next year. Conceivably we could do the first flight to orbit, and we'd initially do it without people, at the end of next year, and then the first flight with people, in 2016 we think is very achievable.
I don't think we need to send any monkeys. One funny little - even with Dragon version one, we actually do have a moderate life support system in Dragon version one, and sort of a fun thing that I think is happening on the next mission to the space station is that we're going to be carrying 40 mice. The mousetronaut mission is going to be happening fairly soon. With Dragon version two, we'll actually test the life support system, so even when it's unmanned we'll simulate the output of a person. So, like the CO2 output and the water vapor and what-not, will all be simulated. We'll have crash test dummies and that kind of thing, but in terms of the first people, I think approximately two years from now.
I think we're in somewhat of an ignominious situation here. It's not really the fact that Russia is taunting the United States, for lack of manned access to space, but they're also massively overcharging. I think it's gone even above $70M, I think it's sort of $76M/seat that the Russians are charging. The quote that we've provided NASA would allow the cost per astronaut to be potentially less than $20M, and that assumes a low flight rate. In a high flight rate it could potentially get to the single digit millions.
I think it is - we are in a very questionable situation that a lot of the national security launches being done by United Launch Alliance dependent upon Russian engines and the Russian deputy prime minister is threatening to withhold those engines. Which, obviously, is not a good position to be in. I think, from a SpaceX standpoint, we stand ready to support the US air force and intelligence missions with our Falcon 9 rocket and we look forward to launching a lot of satellites for the defense department and the intelligence agencies and eliminating that Russian dependency.
I'd first like to say that I think, on balance, we have a great relationship with the air force. I think we have some strong differences of opinion with a few individuals, but with the vast majority of the air force we have very good relations.
Long term, we really want to get to the point where there can be thousands of space flights a year, and ultimately where we can have a base on the Moon and a base on Mars and become a multi-planet species and a true spacefaring civilization. That's where things need to go in the long term.
The thing that got me to start SpaceX was that I was disappointed that we'd not made progress beyond Apollo. There was this incredible dream of exploration that was ignited with Apollo and it seemed - it just felt as though the dream had died. Year over year, we did not see improvements in rocket technology and I kept expecting that we'd send people to Mars, that we'd have a base on the Moon and that the things that were projected in science fiction movies and books would come true, and they unfortunately did not. Even before starting SpaceX, I can tell you like my goal was to figure out how do we increase the NASA budget in order to make that happen. As I learnt more I discovered that unless we improve rocket technology, it's just not going to matter. We might do a small number of missions but that's not the thing that really changes Human destiny, the thing that really makes the big difference to humanity's future is, are we a spacefaring civilization? Are we a multi-planet species? That's the thing that makes all the difference in the world, because eventually, there will be something that happens on Earth - either a man-made or a natural calamity and humanity's history will fundamentally bifurcate - are we going to be the multi-planet species that is out there among the stars, or will be one of perhaps the many single planet species that never went anywhere and just eventually something terrible happened and that caused the end of that civilization.
My dream of space is that humanity becomes a multi-planet species. That we'd have a self-sustaining civilization on Mars and perhaps on the Moon and elsewhere in the solar system. Once you have that established, I think over time, that would create a forcing function for the continued improvement in spaceflight technology and eventually we'd even go beyond our solar system. To me, that's a really exciting, inspiring future and it's one to which we should aspire.
In terms of thousands of flights per year, I think probably 20 years.. for thousands of flights. I think we can probably get to the hundreds of flights level in about 12 to 15 years.
The biggest technology challenge for Dragon version two was the SuperDraco engine. That's an engine that has to produce a tremendous amount of thrust and yet be very light. It's also got to throttle over a wide range - from a very low throttle range, to a very high throttle range. It's got to be able to react very quickly. It was quite a tricky thing to develop. We are essentially - we're almost complete with that development.
It's really hard to reduce a complete rocket development program to a few soundbites.
One of the technologies that was "really critical to the development of the SuperDraco engine was the ability to do 3d metal printing", because it is quite a complex engine and was very difficult to form all the cooling channels and the injector head and the throttling mechanism, but being able to print very high strength advanced alloys, I think was crucial to being able to create the SuperDraco engine as it is.
I'm extremely confident in the SuperDraco engine. In fact, we've designed it to be super robust.
There's certainly a reduction of parts count in the SuperDraco engine because it's printed. In the normal way they have to make an engine is you have to machine a whole bunch of separate parts and then try to weld them together and so it makes it heavier, less robust and much more sensitive to make.
Who's 3d technology are we using? We're using a variety of printers. We use EOS, SLM and Concept. They're all German by the way. Germany's doing quite well on the 3d printing front.
I certainly didn't expect to be unveiling Dragon version two, ya know, looking back to 2008 and we still only had the Falcon 1 rocket and we were at really low stages of practical experience and morale after the second failure of our experimental rocket. Fortunately, things have come along since then but man, that was a super low point and I never expected to be up here on stage talking about version two of our spacecraft that can dock with the space station.
It's really difficult to comprehend. I find this a very nice fact of circumstance.
With SpaceX, fortunately, we are at positive cash flow and we have been for several years. So, we don't have to go public and unlike the case of, say Tesla and Solar City, "SpaceX has a very long term mission. We want to just keep improving our technology until there's a city on Mars. Well, that could take a long time." I think the public markets, I suspect that is beyond their normal time horizon.
How many flights can Dragon v2 fly without any refurbishment? We're aiming for ten flights without any significant refurbishment and then the thing that would have to be refurbished is the main heat shield, but that remains to be seen. The heat shield material is called PICA-X version three, which is a phenolic impregnated carbon ablator. With each version we've been able to reduce the amount of recession that occurs in the heat shield. You can think of the heat shield like it's a giant brake pad, basically. The better that material technology gets, the more uses it can go through - just like a brake pad on a car, eventually it does need to be replaced, but I think we can eventually get up to, maybe, 100 flights or something like that.
We're aiming for - what really matters in terms of the reusable elements of a vehicle, it has to be done rapidly. We want this to be able to fly the same day. So it has to be able to arrive and depart the same day.
"I'm trying to get back to my home planet, ya know."
"I think America is probably the only place where this would be possible, for a private company to get this far." We've been able to attract an incredibly talented team at SpaceX. We've got a brilliant team of engineers and technicians that really did the design and construction of this spacecraft. I think that having that critical mass of talent is really what's enabled me - if you can call it me, it's not really me, it's other people - but I think having that critical mass of technical talent is what has enabled us to get this far... and capital, certainly, I mean, in the case of SpaceX, I think something that was very helpful, coming out of PayPal I had a bunch of capital that I could spend developing rocket technology, even though I had no experience in rockets at all. If I'd tried to get funding from a venture capitalist, they would have been angry that I met with them, probably. Even in the best of circumstances, space is outside the comfort zone of most venture capitalists. Although, a few years - I think five years after starting the company was when the first venture capital came in. We raised some good partners there, and then about five or six years after the start of the company we started getting support from NASA and in the last several years NASA has really been crucial to our success. In fact, really I think this is something I should have mentioned on-stage, we really would not be where we are today without the help of NASA. That's an important acknowledgement.
If we don't win the next NASA contract, we'll do our best to continue the development and still make it happen.
I personally don't expect to leave California. Certainly, there are probably things California could do to make it easier to manufacture and do things here, but I think, overall, California has a lot to offer. I think the biggest thing about California is it's got a lot of really talented people. As long as the talented people are in California, I think California will do okay.
In terms of lessons learned from Dragon one, there's certainly a lot that we learned in every aspect of the vehicle - whether it's the heat shield technology, the Draco engine technology, orbital maneuvering, de-orbit and trying to achieve a precision reentry path through the high velocity entry, that's quite a difficult thing. Although Dragon version one lands with parachutes, before the parachutes open it actually is executing a very precise guided path with the engines firing during reentry.
Over time we expect Dragon version one to be phased out, but we're going to carry both of them in parallel for at least a few years.
Something that's worth noting is a lot of what is needed on a rocket or spacecraft is actually software. We actually hire a lot of our best software engineers out of the gaming industry. In fact, for myself, I started off when I was a kid - in terms of engineering, I wrote games, that was the thing that I did. I think, in gaming, there's a lot of smart engineering talent doing really complex things. In fact, I think a lot of the algorithms involved in a multi-player online game - compared to a lot of the math that's involved there, doing a docking sequence is actually relatively straight forward. I'd encourage people who are in the gaming industry to think about joining SpaceX and creating the next generation of spacecraft and rockets. Also, probably, in the future we'll create, like, droids on the surface of Mars and the Moon to do things like an automated propellant depot and that kind of thing. We sort of need those features to have a base on Mars.
I think I was just feeling really proud of my team for creating such an incredible piece of technology and also it just felt like here we have a shot to advance space technology and take things to the next level. To some degree, maybe this helps revive the dream of Apollo.
Well, cheaper is one way to say it, another way to say it is we're trying to make space accessible to everyone. We want it to be such that if you want to go to orbit or beyond, then you can do so. "We want to open up space for humanity, and in order to do that, space must be affordable."
I think today is not about those, but there'll be some future stuff.
Well, it's certainly tempting to go up soon. I used to do lots of things that were personally risky, but now with kids and responsibilities, I do a lot less of that. I used to have, like a fighter jet and do all sorts of crazy stunts and I was like, I want to see my kids grow up and all that. I have responsibilities. I think it'll probably be a couple of years after the first astronaut crew goes up, maybe four or five years, I suppose. If the first crew flight is in roughly two years, then I'll probably go up a couple of years after that.
As far as the soft landing of the boost phase, it was interesting, when we got the corrupted video back, because we really actually had a real difficult time getting the telemetry. In fact, I'll tell you a funny thing. We actually had to - because normally we get the bulk of the telemetry from a boat. We also have a backup, an AP3 that was going to go up, and the P3 got iced up, the boats couldn't go out, so I sent my plane up with my pilots, and... we had to design and fabricate an antenna that exactly fit in the window of the plane. We started off with a pizza dish and we were able to do a double loop antenna with a pizza dish and point it out the window to get the link. The data came through really well but the video was corrupted because unfortunately when you compress video, it's hard to uncorrupt a compressed video because you actually have to figure out the compression algorithms and all these things, so we weren't able to get very far, but we put the video up online and then we crowd sourced the cleanup of the video and people did a really great job of fixing it. "I actually tweeted out a link to the latest thing. Mostly the people on the NASA Spaceflight forum were able to fix the video."
Yes, this will land on land. In fact, much like the video you saw. We want to land this back at Cape Canaveral ideally. Initially, we may land it somewhere else, but it's a normal condition landing. Except for emergency landing, all landings will be on land.
There was a little bit of water ingress from a pressure relief valve because it got dragged a bit through the ocean, so there was a pressure relief valve that got some water in it. To my understanding, none of the cargo was damaged, so it's okay.
The heat shield material is called PICA-X and it's version three. It was initially developed at NASA, the original version of PICA, for the Stardust mission and it's called phenolic impregnated carbon ablator and it's the highest heat flux material known to man. This can take more heat than any other material that anyone has ever developed. It was specifically developed for the Stardust mission, which was coming in from interplanetary velocity and was coming in at such a high speed that normal heat shield materials would not work, so they had to develop something new. We started with that as the base line and created a very tough PICA called PICA-X version one, and then with each successive mission we've experimented with improvements on the heat shield material. So we're now up to version two and we'll be flying version three on - version three of the PICA will be on version two of Dragon. I can't talk about the details of the technology because it's protected by ITAR.
It can take essentially seven passengers, if it's in that configuration, and I think, something around - if you really cram stuff in - about a ton of pressurized cargo and two to three tons of unpressurized cargo.
The first crew version will be driven by NASA, I think. [Question about SpaceX test pilots.] It really - we will defer to NASA in terms of the first people on-board. If NASA wants us to fly SpaceX test pilots we'll do that, otherwise we'll fly NASA astronauts. It will carry trunk cargo. As I said, it can carry up to a ton of internal cargo too.
There's the temperatures that it will sustain and there's the temperatures that it could sustain. The proper way to think of a heat shield material is watts per square centimeter and there's the peak heat flux and the sustained heat flux. The PICA-X version three is capable of over a kilowatt per square centimeter, which is a crazy lot and sustaining that for a long time. It's really driven not by the recession rate but by the conduction of the heat to the back of the tile where it could potentially damage the heat shield's support structure. A top temperature, well, I could estimate that pretty well, I'd say about five or six thousand degrees Fahrenheit, something like that. Top speed, it's going to be coming in at roughly 25 times the speed of sound, as a sort of rough point. It could probably handle twice that kinetic energy, maybe more.
Most of what you see here is flight hardware.
I'll give you some precision with respect to costs. In terms of what we've bid, it is contingent upon flight rate. If you assume four flights per year...
... touch screens, there are four of them in the vehicle, actually two pairs of two, I should say, the great thing about this is you can configure the interface to have a wide range of controls and a wide range of feedback and you can really have an almost infinite amount of information that you can access and any amount of control that you'd like, with a touch screen, as anyone who has used an iPad can attest. The range of things that you can use in that device is really unlimited. In the unlikely event of all the screens being destroyed, the critical functions will be controlled with manual buttons. In terms of manual chute deploy and reserve oxygen - backup system for any kind of life support, that stuff can all be controlled with manual buttons.
We will be using Tegras to power the screens. The Tegras power the screens, but not the spacecraft. From a SpaceX standpoint, we expect to be ready to transport crew in 2016 - about a year sooner than NASA needs it. I think NASA wants to be a little bit cautious about the timing of things. They don't want to count on us being there by 2016 but we feel fairly confident that the vehicle will be ready in two years.
Well, Bob Bigelow I guess, he's here somewhere I think.
You mean the Dragon spacecraft? You mean including version one and everything? Or just version one to version two? So far, it's probably been $400M or $500M and it'll probably be that amount more to get through first flight. Something on the order of a billion dollars.
For the spacecraft itself, it's going to be probably something on the order of 70% to 80% NASA funded, but for the rocket it's not NASA funded at all. The development of Falcon 1 and Falcon 9, all of that, that's 100% private. If you say, what's the total cost of development has been, including the rocket and the spacecraft, it's probably something closer to 50/50 NASA and private.
"No, we're not replacing NASA. NASA is our most important customer." I think there's always a role for NASA. There's always going to be things where there's no obvious way to commercialize something - think of something like the Hubble space telescope or the James Webb, or some of the exploratory probes that go to Mars and elsewhere, it's always going to be important for NASA to be doing those things because there's no obvious economic model for those things. I don't think we could find investors for them - an investment means there's an expectation of return.
First of all, I think anything - if you can 3d print something with sufficiently good material properties, then that's the easiest way to do it. Certainly, in the volumes of a rocket company, it's harder to make it work for a car company. In the case of the SuperDraco engine, we didn't in the very beginning anticipate being able to 3d print it. We actually tried a whole bunch of normal methods of making the engine and actually those did not have great success. Then we said, well, let's give 3d printing a try and see if it'd work. Initially, we thought of it as somewhat of a Hail Mary on the SuperDraco and actually it turned out to work super well.
Next launch, I think we're just double checking everything on the rocket and we expect to probably launch on June 10th or thereabouts. We had a helium leak. Helium is a pernicious little molecule, I've got to say. [Question about getting past helium.] Well yeah, so here I'll give you a little bit of a tidbit on the Mars vehicle which will be methane powered. Mars vehicle will be autogenously pressurized with methane and oxygen. So instead of helium pressurization - there's no helium on Mars. So, we'll gasify the liquid oxygen and liquid methane to pressurize their respective tanks. Looking forward to that. [Fully reusable?] Yes, absolutely. Fully reusable.
I'll take a couple more questions and then I'll have to bail out.
For any kind of low Earth orbit activity you essentially protected by the Earth's magnetic field, so the radiation that is dangerous is not super great - particularly for a short flight. We have improved the micrometeorite shielding. When you see the shielding on the outside, it's actually doing a lot of things. It's helping protect against high velocity alpha particles coming from the Sun and even other high velocity particles coming in, but it's also protecting against the heat of reentry and then it also has to be a micrometeorite shield. It's got better shields.
Oh, you're talking about the electronics. Yeah, absolutely. Bit flips. In fact, even with Dragon version one, technically Dragon version one is Dragon version 1.3 right now, arguably. The avionics of Dragon version one have gone through two major revisions, and on the last flight we saw no anomalies with electronics at all. There were no bit flips that weren't automatically and instantly corrected by the system. We've certainly learnt a lot, although it's not externally visible, it still looks the same on the outside, the electronics on the Dragons flying now are much more advanced than the first one.
NASA is our customer really with Dragon version two. It'd be like someone buys a Model S and we're not going to be the one who says who drives it. If you buy the vehicle you get to say who's driving.
These will be operated on behalf of NASA.
NASA is our single largest customer, but if you look at the missions on our manifest, the NASA missions are, I think, 20% to 25% of our missions on manifest. Call it roughly a quarter of our missions are from NASA.
Yeah, I think the FAA just recently, maybe even today, gave the approval for the Texas launch site. So we're pretty excited about building that now. That's going to give us redundancy for any Eastern launches. We can reach the space station from Texas. I should say, we would only do so in emergencies, the default path for space station would be 39A, most likely. We could actually, a little harder, but we could reach it from Vandenberg too. It'd be a real coast hugger, but yeah. We'll actually be doing a lot more missions from Vandenberg, for example the new generation Iridium constellation will be launched from Vandenberg and that's, I think, at least eight missions. We expect to launch Falcon Heavy from Vandenberg as well. Although it does look like the first Heavy - we originally thought the first Heavy would go out of Vandenberg but it's now looking like the first Heavy will go out of the Cape from 39A.
Thank you everyone, and I appreciate you coming.
Yeah it was funny, friends of mine went back for a 20th reunion. I've been back. I've given a couple of talks at Penn.
It's a nice shot, it's a tall rocket. It's as skinny as I thought we could possibly make it. We stretched to it as long as .. [is that for road transport?] Yeah. It's twelve feet in diameter and when you add little bits and pieces, it gets out to almost 14 feet, and then we have to tuck the little bits and pieces in the corners because the key thing is that the total height above the road has got to be less than 14.5 feet. [Question about bigger rockets.] Need a boat. Or they've got to fly themselves. Not going to fit on the roads, that's for sure.
The hard points where the tanks and the parachutes and everything are mounted, there are these vertical blades that transfer load from the heat shield to the pressurized section. So, that's one of the factors and they don't quite line up, so we'd either have to add a lot of mass, so they'd really be symmetric or we could have it not be symmetric and not add extra mass. If the parachutes have deployed, the parachutes - like, do you see these strange lines? [Those are the shroud lines?] Yes, exactly. Behind the dragon here is where the main chute is, and then the drogues are at the top and you can see those lines basically go from where the drogues are to the mains. Where it's held, where the parachute lines attach, is just above where the hatch is, and so it actually comes in at an angle. It'll be coming in through the wind with lateral velocity, and you want the load to be taken up by the legs. You don't want it to land on one leg, because then one leg is going to take too much load. By having two legs closer together actually helps that too. It sort of takes the initial impact on those two rear legs and then onto the front.
Yeah, it'll look almost identical. We intend it to be a lot smokier, with the scorch marks and all, but it'll pretty much look like this. I'm really looking forward to that. It should be fun to see it hop around those pads.
When we created Tesla we wanted to show that you could make a really compelling electric car. That you could make an electric car that was really better than a petrol car and I think with the Model S we've been able to achieve that it. It's been rated by some of the most critical reviewers in the world as among the best and by some the best car in the world.
Over 11 years, wow, that's a lot of challenges. The biggest challenge that Tesla faced was not going bankrupt in 2008, with the global financial crisis. Ya know, General Motors and Chrysler went bankrupt and we narrowly avoided bankruptcy thanks to a dedicated group of employees and investors. That was probably our most difficult moment. In the creation of this car in particular, I suppose the most challenging thing was to create a super safe car that had great performance and yet had great range as well. The car's got a 265 mile range, despite being a luxury sedan with transmatic capability.
I think Tesla gets a lot of attention, positive and negative. I guess it's a bit of live by the sword, die by the sword. Everything we do seems to be amplified. There was the whole sorta fire thing, which, even though the Model S has an incidence of fire which is five times less than the automotive industry, in fact, I think it's maybe the least fire-prone car on the market, last year it got more press than the other 500,000 gasoline car fires combined. Even though we've never had an injury - I mean, touch wood - we've never had a serious permanent injury in any of our cars, ever. Nobody's died. Nobody's had a permanent injury in any of our cars, ever. Ya know, I think there's still some perception that our car is somehow not safe. Even though it's actually the safest car on the road.
Some of them do take swipes, yeah. I suppose that's natural for competitors. I think the truth wins out in the end, particularly these days with the Internet. People are able to search and compare, and with five minutes of research you can get to the truth very quickly.
I really care about Tesla and about the Model S and everything, so it's hard to be dispassionate about that. It's a lot of blood, sweat and tears from a lot of people and, you know, I think particularly if the criticism isn't accurate. It's sort of like, the Model S, it's like your child. Let's say your child goes into a competition and loses, but not on the merits, then you'd be pretty angry about that. Or if somebody disparages your child in a way that's false. There are honest criticisms to be had, certainly, but it's difficult to take false criticism of something you care about.
"Governments around the world certainly make a lot of noise about caring about the environment but the results are not very good." Particularly in automotive. Much less than 1% of new cars made every year are electric. This year there'll be 90-something million cars made, so round it off, say 100 million new cars made a year, there's about two billion cars in the global fleet. Even if all new cars went to electric this year, it would take 20 years to replace the global fleet. Much less than 1% of new cars made this year are electric. Clearly, we need stronger action.
I think all governments need to do more. American government, and UK government. I know they keep sort of talking about it. Really, the action needs to be ratcheted up until we see solid movement toward electric cars. How about at least 1% of cars being made are electric? That seems like a very low bar.
Well, this particular configuration - they start at 50,000 pounds, this has probably got lots of options and thing. The goal of Tesla is to create mass market electric cars but we can only get there one step at a time. We started off with the Roadster, our sports car, that was even more expensive and at very low volume. Now we're at step two, which you could argue is more of a mid-price, mid-volume car, but we need to sell this car in order to make the money for the high volume affordable car in the future. Ya know, we can't think of any other way to get there. It's about three years away we think.
People like cars, clearly. That's their chosen method of getting around. So, we have to adapt to what people want to do. That's not to the exclusion of something like the Hyperloop or mass transit, but it's complementary certainly. So, we've got to make electric cars I think.
SpaceX was about a year earlier. With SpaceX, the goal is to accelerate the development of rocket technology. If you think about the fact that humanity was able to go to the moon in 1969, and now can sort of barely get to low Earth orbit, that's a huge decline in capability. What we'd like to do with SpaceX is to try to turn that around, and rapidly improve rocket technology to the point where, maybe ultimately, we can have a city on Mars, and be a multi-planet species. I'm not saying SpaceX is going to do all that, but we're going to try to advance rocket technology as much as we can in that direction.
Right now we're launching quite a lot of satellites into orbit for various commercial customers. NASA's our single biggest customer, and they're about a quarter of our launches. We've done missions to and from the space station with cargo, including live cargo in some cases. Our next mission to the space station will include 40 mice - so, 'the mousetronauts' - and it has the ability to maintain life support systems and everything. We'll be launching astronauts in about two years and keep going on from there.
Well I think what were doing at SpaceX is certainly in collaboration with NASA. NASA's been a big supporter, and I'm not sure we could've really gotten where we are today without NASA. But in general, commercial technology companies are better at advancing technology than governments. Particularly once it gets out of the fundamental research phase. And that's sort of what SpaceX hopes to be - to really drive the technology development a lot faster than it would occur otherwise, if it was just sort of a big government endeavor.
Well, there's not many asteroids between here and Mars that are of any size. After the Moon, you're either going to go to a very small asteroid, or Mars. The big asteroids are between Mars and Jupiter. [Is there a rough date for the Mars landing?] About 11 or 12 years.
Do you mean Mars? Well, I think in order to create a self-sustaining city on Mars, you've gotta make it as affordable as possible to go there. Otherwise you won't get enough people. So I think you've got to get the cost of moving to Mars, roughly equivalent to a middle class home, and then there'll be enough people who want to sell their house and move to Mars. That's sort of the key threshold for it to become a self-sustaining.. 'colony' if you will. Kind of like the English colonies in the Americas - which started out with a lot of sort of, basically, rich people and the British government sponsoring people to go over, but eventually, you know, anyone could go over.
We're pretty different from Virgin Galactic. Virgin Galactic is sort of more oriented more towards entertainment, you know, in having a quick-fun ride. SpaceX is sort of more, Martian colonization, whereas Virgin Galactic, at least in its initial efforts is sort of trying to give you kind of five minutes of weightlessness. So it's a different thing.
Not really, no. No, I mean, I think of myself as an engineer really. Try to create new technology that's important, but fun and cool at the same time.
Yes. If you go even beyond that and say, let's say the engines fail - there's a total propulsion system failure - we actually have a redundant parachute system on-board with dual drogues and three main chutes. I mean, it's like ridiculously - I mean, from a design standpoint I'm not sure what more one could do. It's got, like, multiple engines, multiple parachutes. "I mean, space is a dangerous thing." It's not something that - you know, humans didn't evolve to be spacefaring creatures, but in as much as one can make certain design decisions to make a spacecraft safe, we've endeavored to make those decisions, and I'm at a loss to think of anything more that we could do, and if we can think of something more, we'll do it.
Well, I don't want to be complacent, or presumptuous about the contract. I think we've done everything we can to have this be a good design and I think we've shown to NASA - who's been an awesome supporter of SpaceX in the past. Frankly, we wouldn't be where we are today without NASA. I think we've shown that we can do a good job and hopefully that makes a difference for this competition.
Actually, the NASA competition, really will be independent of any Congressional influence. My experience with NASA is that they really are very objective. Frankly, if NASA wasn't so objective then we would not have won any of our earlier contracts because we would have been out-lobbied by the big aerospace companies - who have far more resources than we do. The reason I wanted to bring Dragon to Washington DC was really to show key Congressmen where US tax dollars would be going. At the end of the day, they are the ones controlling the purse strings for a competition, in general. So, they're not deciding the winners but they are deciding, is the amount of money allocated to a commercial human spaceflight program - is it going to be well spent? Does it have a chance of success? "Ya know, there's a lot of people who think that human spaceflight should not be allowed in the commercial sector. It's sort of an odd position I think, but there's still a lot of people who feel that way." So, Congress need to think, okay, well, if this taxpayer money is spent, does it seem like it would have a good outcome, and seeing it in person is just a lot more convincing than seeing it on paper.
I don't know. I don't know if we'll win. In the long term, I have faith in the American system of government and I think in the long term we've got a good shot. In the short to medium term, it's much harder to say where things are going, and of course, in order to get to the long term we've got to get through the short to medium term. I just find it odd that we have to fight so hard just for there to be competition for national security launches. It just doesn't feel right.
A picture is one thing, but seeing something in reality is much more convincing.
It's helpful for the elected legislators, who hold access to the purse strings to know what it is that they might be buying.
At the end of the day, legislators are writing checks on the behalf of the American public.
If we just had it in California then it's - well, not everyone can get there. So yeah, it's just to show people what it looks like.
"Lockheed and Boeing are used to stomping on new companies, and they've certainly tried to stomp on us."
The main thing that I think is problematic from a SpaceX standpoint, is that our toughest competitor on the international launch market is the Russians, and the US air force sends the hundreds of millions of dollars every year for Russian engines. So not only do we not have access to use our own national launch capabilities, but our own US air force is funding the Russians to compete against us. It's super messed up. I mean what the f... ya know.
Fortunately, things have changed quite dramatically through the hard work of a huge number of people at Tesla. Tesla has achieved profitability, which is a huge milestone, and something we're very proud of. Our aspiration with Tesla, and in fact the secret master plan that I wrote right at the beginning of Tesla, was that we'd start off with a high priced low volume car, then go to a mid priced mid volume, and then the third step would be a low priced high volume car. Now we're sort of at the middle of the second step, if you will. We've got the Model S out, which obviously has won car of the year and many accolades. We've got a great 4-door sedan and we've had really good sales of the car. The demand has been excellent. We sold almost 5000 cars in the first quarter and we expect to sell over 20,000 this year. In three or four years time when we have our lower cost car, which will be a bit smaller and slightly fewer features than the Model S, that's when we expect to be shipping a couple of hundred thousand cars a year.
I hope we are surrounded by electric cars from other manufacturers. The reason that I created Tesla with my partners and the reason why I put so much of my capital and time into it was to accelerate the advent of sustainable transport of electric cars. "I really look forward to the day when every car on the road is electric. That's the goal, we want to make that happen." In fact, we're helping other car makers do that. We've got a deal with Mercedes for an electric V class that is coming out, I think, early next year. Then we've got the electric RAV4 with Toyota and that's already in production, and already being sold to people. We might do some additional deals in the future, but our goal is to just get electrification happening as soon as possible. I think it's an important thing for the world and the sooner it happens, the better off the world will be.
Okay, first of all I'd say starting a business is not for everyone. Generally, starting a business, I'd say, number one is have a high pain threshold. There's a friend of mine who's got a good saying which is that starting a company is like eating glass and staring into the abyss. Okay, that's generally what happens because when you first start a company there's lots of optimism and things are great. Happiness at first is high, then you encounter all sorts of issues and happiness will steadily decline, and then you will go through a whole world of hurt, and then eventually, if you succeed - and in most cases you will not succeed - and Tesla almost did succeed. It came very close to failure. If you succeed then, after a long time, you will finally get back to happiness.
I think, two, is that you've got to make sure that whatever you're doing is a great product or service. It has to be really great. To go back to what I was saying earlier, where if you're a new company - unless it's like some new industry or new market that hasn't - if it's an untapped market, then you have more ability to - the standard is lower for your product or service, but if you're entering anything where there's an existing marketplace, against large entrenched competitors, then your product or service needs to be much better than theirs. It can't be a little bit better, because then you put yourself in the shoes of the consumer and they say why would you buy it as a consumer. You're always going to buy the trusted brand unless there's a big difference. A lot of times an entrepreneur will come up with something that is only slightly better, and it can't just be slightly better. It's got to be a lot better.
Number three, I'd say, is constantly seek criticism. A well thought-out critique of whatever you're doing is as valuable as gold, and you should seek that from everyone you can, but particularly your friends. Usually, your friends know what's wrong, but they don't want to tell you because they don't want to hurt you. Yeah, they say I want to encourage my friend so I'm not going to tell him what I think is wrong with his product. It doesn't mean your friends are right, but very often they are right, and you at least want to listen very carefully to what they say.. and to everyone. You're looking for, basically, you should take the approach that you're wrong. That you, the entrepreneur are wrong. Your goal is to be less wrong.
There also needs to be a commercial orbital spaceport, just as we have commercial air traffic. It's a very similar thing to aircraft in that sense. We looked around for - we looked all through the country, and looked at all the possibilities, and I'm very happy to say that we thought that this was the best place to put it. So that's what we're doing. This is just the initial groundbreaking, it's going to take several years to build up a spaceport. This is going to be quite a significant building endeavor. What's near term for SpaceX, which I guess is sort of in the three to four year time frame, we expect to spend on the order of about $100 million, but in the long term, if you go out say ten or twenty years, it's probably in the several hundred million dollar range, because we're going to keep expanding the facility. There will be other companies that come and also locate here to support SpaceX, and you end up creating an ecosystem of companies - once you've got the anchor tenant down, other companies move in to support the anchor tenant - in this case, the launch of commercial satellites.
The long term goal is to create the technology necessary to take humanity beyond Earth, to take humanity to Mars, and establish a base on Mars. So, it could very well be that the first person that departs for another planet could depart from this location. So yeah, I'm super excited and can't wait to start building this project.
Yeah, thanks for having me.
Well, I think it's a vital next step in SpaceX's progress. It's about taking astronauts to the space station, eliminating the dependency on Russia for transporting US astronauts, but for SpaceX it's the next step in the technology we're developing and it means we've got a key anchor tenant in NASA as a customer for human transport into orbit.
What you saw was Dragon 1, the initial version of the technology [where are we now?] Two, just two. It is a significant upgrade in technology. In particular, and I think an upgrade overall in space technology because the Dragon 2 will be capable of precise populsive landing. So, it'll be able to land anywhere in the world, on its thrusters with the accuracy of a helicopter. If you think of the earliest generation of technology being parachutes to a water landing, that was sort of Apollo, then the second generation being a winged vehicle, then the third generation, which is what we're doing with Dragon 2, is landing on thrusters with legs, in a precise location. If you imagine an alien spaceship landing, that's how it would land.
I think, no later than 2017. Our internal schedule calls for late 2016 but the nature of complex projects is they often take longer than expected, so I would imagine mid-2017 is the most likely point.
Yeah, exactly.. and then on the - our European competetor Ariane, which is several European countries banding together - their Ariane 6 rocket is specifically geared towards competing with SpaceX and they're even waiving country-by-country production rate requirements, because normally they piece out the parts of the rocket to various countries by country..
To highlight the point you made a moment ago, it is worth noting that the Nevada legislature 100% voting in favor of the deal. All members, both sides of the party, including parts of Nevada that are far away from where the Gigafactory is. So, if they had any doubts about it being good for the state, we would have at least seen some people vote against it, but we didn't. There's been some articles saying, like, oh we took advantage of Nevada, but that's absolutely not the case. If you think of it like Vegas, Nevada understands what it means to be the house, and the house always wins. This is a super-winning deal for Nevada.
Thank you for having me.
Well, we've been able to soft-land the rocket booster in the ocean twice, so far. Unfortunately, it sort of sat there for a couple of seconds and then tipped over and exploded. Yeah - like that it's quite difficult to reuse. Unfortunately - it's as tall as a 14 story building, so when a 14 story building falls over it's quite a belly flop. So, what we need to do is be able to either land on a floating platform or, ideally, boost back to launch site and land back at the launch site. But before we boost back to the launch site, and try to land there, we need to show that we can land with precision, over and over again. Ya know, otherwise something bad could happen, if it doesn't boost back to where we intended. For the upcoming launch, I think we've got a chance of landing on a floating landing platform. We actually have a huge platform that's being constructed at a shipyard in Louisiana right now. Which is - well, it's huge, huge-ish, it's about 300 feet long by 170 feet wide. That looks very tiny from space, and the leg span of the rocket is 60 feet, and this is going to be positioning itself out in the ocean with engines that will try to keep it in a particular position - but it's tricky, you've got to deal with these big rollers and GPS errors. It's not anchored, because it's out in the Atlantic. But we're going to try to land on that on the next flight and if we land on that I think we'll be able to refly that booster, but it's probably not more than a 50% chance or less of landing it on the platform for the first time, but there's a lot of launches that will occur over the next year. So there's at least a dozen launches that will occur over the next 12 months and I think it's quite likely, probably 80% to 90% likely that one of those flights will be able to land and refly. So, I think we're quite close.
There's a couple of reasons. The longterm ambition of SpaceX is to develop the technologies necessary to establish a self-sustaining city on Mars, or civilization on Mars, and wings and a runway don't really work if you're going somewhere other than Earth. Ya know, the Moon doesn't have an atmosphere, so wings and wheels are - there's no runway and there's no atmosphere. Not a good choice for the Moon. Then, on Mars, there are also no runways, and the atmosphere is very thin. So, unless you like trying to land something at supersonic velocity, it's just not a good choice for Mars either. You basically have to go with propulsive landing if you want to go someplace other than Earth, which is why you have rockets, because obviously aircraft work quite well on Earth, but even for Earth recovery, when you really look at it, even if other planets had atmospheres the penalty for propulsive landing quite low. You can just do an easy calculation of what's the terminal velocity and then how long you have to fire the engine, at what g-level, to get to zero velocity. If you then do some interesting things, like look at our landing gear, they're essentially like giant body flaps, so the drag - when we deploy the landing gear, the drag massively increases, so we have dual use of the landing gear as giant body flaps and as landing gear. That actually cuts the terminal velocity in half and therefore the fuel - the propellant we need to stop the vehicle in half, and actually it's quite an efficient method of landing precisely. You use less mass if you want to use parachutes to a water landing, but then reusability is negatively affected.
The next generation vehicles after the Falcon architecture will be designed for full reusability. I don't expect the Falcon 9 to have a reusable upper stage, just because the - with a kerosene-based system, the specific impulse isn't really high enough to do that, and a lot of the missions we do for commercial satellite deployment are geostationary missions. So, we're really going very far out. These are high delta-velocity missions, so to try to get something back from that is really difficult. But, with the next generation of vehicles, which is going to be a -
- sub-cooled methane/oxygen system where the propellants are cooled close to their freezing temperature to increase the density, we could definitely do full reusability - and that system is intended to be a fully reusable Mars transportation system. So, not merely to low Earth orbit but all the way to Mars and back, with full reusability. [Within 3 years?] Ha. I am an optimistic person, but - I think we could expect to see some test flights in the five or six year time frame. But, we're talking about a much bigger vehicle, and we're also going to be upgrading to a new generation - a harder engine cycle, which is a full-flow staged combustion. What we have right now is an open cycle engine. Right now, I'd say, engines are our weakest point at SpaceX, but they will become as strong as the structures and avionics in the next generation.
Sure, but let me just clarify a point. I think, right now our weakest point is engines with respect to specific impulse, but not with respect to thrust-to-weight. We actually have the highest thrust-to-weight of any engine, I think maybe ever, but our specific impulse, the efficiency of the engine is about 10% worse than a staged-combustion engine using the same propellant. In terms of our competitiveness, I think it mostly comes down to our pace of innovation. Our pace of innovation is much much faster than the big aerospace companies or the country-driven systems. This is generally true, if you look at innovation from large companies or smaller companies, smaller companies are generally better at innovating than the larger companies and it has to be that way from a Darwinian standpoint as smaller companies would just die if they didn't try innovating because otherwise people would just keep buying the product from the big company. So, then, why is SpaceX more innovative? I think it's probably because we've got a super-engineering driven culture. We're running sort of the Silicon Valley operating system. It's kind of hard to describe. Like, how do you describe Linux. Ya know, like Linux is more efficient than some other operating systems, but to explain exactly why, you really have to get into the weeds. But, you sort of have a very flat hierarchy, you promote rapid communication, a best-idea-wins culture - as opposed the the having the seniority of the person decide the solution, which - that should never be the case in engineering, it should always be a rational basis. I also believe that at the leadership level, I'd much rather promote someone that has strong engineering ability than so-called management ability. "We do hire some MBAs but it's usually in spite of the MBA, not because of it."
Well, it is a chicken and egg situation, the reason why there's low demand for spaceflight is because it's ridiculously expensive, and so at some point someone has to say, okay, we're going to make something that's much more affordable and then see what applications develop. That's what has to happen. The situation in rocketry is like if an aircraft - imagine if aircraft were single use, then how many people would fly? The flight rate would be really low. If you buy a 757 it's like $250M, or maybe $300M, and you need two of them for a round-trip. No-one is paying half-a-billion dollars to fly from Boston to London, and if that were the case there'd be like a very small number of flights for scientific and military purposes and people would say, wow, the market for aircraft is so tiny, people really love going by boat - it's nonsense. If we have rockets that are reusable, we could - fully-reusable and can get to a decent flight rate, the potential is there to get a two order of magnitude reduction in the cost of space transport, which is, I think, vital for establishment of a self-sustaining civilization on another planet or even on the Moon or some sort of L5 colony or whatever, but you really need to get the cost down - we need a two order of magnitude improvement, at least, in the cost of transport. In fact, relative to the estimates of what it costs to do a manned Mars mission, I think like some of the lower estimates are at the $100B to $200B level, for a four person mission, we need more like a 10,000 fold reduction. I mean, so people can afford to go.
Yeah, private spaceflight is going to be some amount of market. Yeah, I don't really know. We're just trying to advance rocket technology and - I mean, on the one hand, if we get even slightly towards the overarching goal of Mars colonization technology level, if we just get slightly there, we certainly have a viable business in launching satellites and servicing the space station, that kind of thing, because - yeah, like, even for like 5% - there's still a viable business doing Earth orbit and we're vastly more competitive than the other rocket companies. We do have a lot of people ganging up against us these days.
Yeah, things that can mitigate the radiation effects would be certainly - I think the radiation effects are way overblown because, ya know, people went to the Moon. We went like two weeks in deep space. Buzz Aldrin's still around. So obviously they're still alive and they seem okay. Ya know, people have been up in the space station for like a year or more. They're okay. I think there are things we can do to mitigate the radiation on-route, by effectively placement of the water you bring with you - put that in the direction of the Sun. But yeah, I really think we have the essential ingredients, but we do need an efficient propellant depot on Mars, but I think is really like, there's a lot of hard work and engineering that needs to be done, but it's there. Like, the pieces are there.
Yeah, yeah, I think that'd be - like, we have rovers on Mars already, so I think we'll see more robots on Mars and we'll probably want to make sure the propellant depot works - it'd be an automated propellant depot and there is some question as to, what do you do for power generation on Mars? Do you have a nuclear reactor? Then you've got to carry the nuclear fuel there, and reactors are fairly heavy. Do you do some lightweight solar power system? Like, maybe big inflatable solar arrays or something like that. So, just power generation on Mars, I think is an interesting problem, and then just figuring out how to get all the bits of efficiency right for creating, say, methane and oxygen on Mars. Ya know, Mars has got a CO2 atmosphere and there's a lot of water buried in the soil that you can get to.
I think there's plenty of people who will sign up for a one-way trip to Mars. It'd certainly be enough, but I think the question is, is it a one-way mission and then you die, or is it a one-way mission and you get resupplied, that's a big difference. I think it ends up being a moot point because you want to bring the spaceship back. These spaceships are expensive, okay, they're hard to build. You can't just leave them there. So whether or not people want to come back or not, is kind of - like, they can just jump on if they want, but we need the spaceship back. I mean, it'd be kind of weird if there's this huge collection of spaceships on Mars over time. It'd be like, maybe we should send them back - no, of course we should send them back. Particularly if we want to have a colony of some kind that's of significant size.
Yeah, well that's why I think we should really be setting the goal as the creation of a self-sustaining civilization on Mars, not simply a mission to Mars because then we risk - yeah, it'd be awesome and cool and it'd be a new high altitude record and great pictures and stuff, but it would be - it's just not the thing that fundamentally changes the future of humanity. I should sort of explain, perhaps, the rationale for, ya know, why I think it's important to establish a self-sustaining colony on Mars. Some people are aware of that, but probably most people aren't and you hear all these rebuttals, like aren't there all these problems on Earth that we need to deal with, and shouldn't we focus on that, and the answer is yes, our primary focus should be the problems on Earth but I think that there should be some small amount that's given over to the establishment of a colony on Mars and making life multi-planetary. By a small amount, I mean some number less than 1% of our resources. So, it's not as important as, say, health care, but it's more important than let's say, cosmetics. I'm in favor of cosmetics, I like them, they're great, but ya know, lipstick or colony on Mars. People may have different opinions, I know. I think we should have that, because the future of humanity will fundamentally bifurcate along the lines of either a single planet species or a multi-planet species, and a multi-planet version of humanity's future is going to last a lot longer. We'll propagate civilization in the future far longer if we're a multi-planet species than if we're a single planet species. So it's like planetary redundancy, backing up the biosphere. We've got all of our eggs in one basket here. We should try to protect that basket with everything we can but there's some risks that are just extremely difficult to mitigate and some which we will ultimately not be able to mitigate. So, it just seems like the right thing to do, and then the next question is should we do it now, or should we wait for some point in the future, and I think the wise move is to do it now because the window of technology for this is open and it's the first time that window's been open in the 4.5 billion year history of Earth. That's a long time. I certainly hope that the window will be open forever, but it may also close. If you look at the history of technology of various civilizations - if you look at, say, ancient Egypt where they were able to build these incredible giant pyramids, and then they forgot how to build the pyramids and then they couldn't read hieroglyphics, or you look at Roman civilization, they were able to build these incredible aqueducts and roads and then they forgot how to do that. They had indoor plumbing, and they forgot how to do indoor plumbing. There's clearly been a cycle with technology. Hopefully, that's an upward sloping sine wave that continues on to be really great in the future, but maybe it doesn't. Maybe there's some bad thing that happens. So, for 1% of our resources we could buy life insurance for life, collectively, and I think that would be a good thing to do.
The Gigafactory is like the least bad solution we could up with, honestly. I think it's actually pretty cool the way it's worked out, but we're just faced with a simple problem of: it we want to make electric cars we need enough batteries for the electric cars, and last year, all Lithium-Ion battery production combined was 30 GWhs, approximately. That's nothing, okay, or at least, it's nothing when you consider if you want to make half a million electric cars a year, that's how much you need. There are a hundred million new cars made every year. There are two billion gasoline or diesel cars on the road worldwide. So, just do the basic math, you don't just need one Gigafactory, you need like 200 Gigafactories, just for new car production and that means you're only going to replace the fleet at the existing rate which has it refreshed every 20 years. So yeah. Given that we want try to get to full capacity at a Fremont plant in California of a half million vehicles a year, we need a half million vehicles a year of batteries, and obviously we can't use all of the other factories in the world combined because people want cellphones and laptops and other things. Therefore we have to build this factory and we have a great partner in Panasonic. They're taking care of the cell formation part of it. There are actually many aspects to this, because you have anode, cathode, electrolyte, can, at the precursor level you've got raw materials coming in from the mines that feed into a variety of other companies like Simitar Mining and Atarchie and others, they do the precursor processing and then Panasonic takes the anode and cathode materials separately and put that into a cell and then it goes into a Tesla section which creates the module, which is all the electronics and the packaging and the conductors, the safety mechanisms and the cooling loops and then the modules go into the pack which has a lot of crash structure associated with it and then the pack goes in the car. Then, obviously, Tesla is the landlord of the whole thing as well. Anyway, short of doing that, there was no way to scale, so that's why we did it.
I've been sort of toying with the design for an electric supersonic vertical take-off and landing electric aircraft for a while, I'd love to do it, but I think my mind would explode. It'd be like, brain's worn out, ya know. I'm pretty saturated working on electric cars and rockets.
It does, absolutely. That's generally the hiring mistakes that I've made in the past, it's been, just as I said, it's been looking too much at their intellectual capability alone and not on how they affect those around them. What really matters is, for someone's contribution to a company, is how they are as an individual and how they affect others around them. You could say it's also analogous to a sports team - the best person on the team is not necessarily the one who scores the most goals. It could be the person who assists in the most goals. If there's one person on the team who just wants the ball all the time and just wants to kick it at the goal, that can actually be detrimental. So, it is important to weigh personality and just are they going to be a good person, will people like working with them, that sort of thing. It does make a difference.
Well, NASA has been really helpful to SpaceX. Not just in terms of giving us contracts but also technically in a number of areas and a lot of the things that we've done at SpaceX have been dependent on things that NASA's done in the past. I think we're certainly incredibly grateful for everything NASA's done in the past and the ongoing support that we receive from NASA. I'm a huge fan of NASA. I think NASA's actually doing the right thing given all the constraints that they have. Within the context of being this large government entity that's getting pushed in all sorts of different directions and has a lot of limitations on what it can do, I've been pretty impressed by what NASA has done given all of those constraints.
Yeah, so I think it's - if NASA continues to expand upon the support of competitive commercial space that's probably what will have the most positive effect on the future of space development.
Our goal for SpaceX and Tesla was not, initially, to do huge amounts of internal manufacturing. We actually tried to do as little manufacturing as possible at first but we found we had to insource more and more over time. So, it's not from the standpoint of we really believe in insourcing or outsourcing, it's just given - if there's a great supplier, then we'd love to use a great supplier, then if there's not then we need to do it ourselves. The need to find a way or make a way to a good solution, and it's just over time we've had to make our way more often than not. For rocketry, there's also ITAR limitations. Which is that rockets are considered advanced weapons technologies, so we can't just outsource it to some other country. But, I think for manufacturing, very often people think of manufacturing as just some rote process of making copies. Which, actually, it isn't. Manufacturing is building the machine that makes the machine. If you think the machine is important, well, building the machine that makes the machine is also extremely important, and more often than not, what I've found is the manufacturing is harder than the original product. For example, at Tesla we can make one of a car very easily, but to make thousands of a car with high reliability and quality and where the cost is affordable, is extremely hard. I'd say, maybe 10 times harder than just making one prototype - maybe more. At SpaceX also, maybe approaching an order of magnitude harder to manufacture rockets and launch a lot of them than to design one in the first place. So, I really think a lot more smart people should be getting into manufacturing and it's kinda fun, so it's like - it sort of got a bad name for a while but it's really interesting.
Actually, if power-to-weight ratio is of interest to you, rocket turbopumps really take the cake. The turbopump on the Merlin engine generates 10,000 horsepower and weighs 150 lbs. Fuel efficiency is sort of a different question.. but power-to-weight, it's at the ragged edge of pulling those molecules apart. It's kind of amazing that you can get 10,000 horsepower out of this thing that you can basically pick up. But, for electric motors, if you have a properly designed AC induction motor getting a high power-to-weight ratio and a really great response rate, low latency and all that, extremely low ripple current and what-not, it just sort of comes naturally to an AC induction motor. The bigger challenge is actually cooling it effectively and then particularly, cooling the rotor because you've got this rotor going at 18,000 RPM. So, in the Model-S we coaxially cool the rotor in order to have high steady state. For an electric motor you can have - it's easier to get peak power for a short period of time, it's hard to have sustained peak power - because you overheat, and then it's hard to get high efficiency over a complicated drive cycle. Those tend to be the problems we wrestle with more than, say, the peak power. We can get peak power pretty easily but sustained power and efficiency over the drive cycle are hard.
Actually, that's not why I started SpaceX, but - I mean, the easiest thing for me to do would have been to buy a ride on the Soyuz and for that I would have been able to go to the space station as a number of other people have done but the thing that I was trying to get at was how to get us back on the track of extending life beyond Earth. That's the reason for starting SpaceX, and I expected it to fail, and people say, oh, well why would you even start that in the first place, but if you go to before I started SpaceX, I wanted to this philanthropic mission to send a small greenhouse to the surface of Mars and try to get the public excited about sending life to Mars, because people respond to precedents and superlatives and this would be the first life on another planet, the furtherest that life's ever traveled and I thought that that would get people excited and that would result in NASA's budget getting increased and then we could resume the dream of Apollo. My initial goal was just to try to figure out how to get NASA's budget higher, but then I came to the conclusion that if we don't make rockets way better then it won't matter. We can get a budget increase but then we'd just send one mission to Mars and then maybe never go there again. The goal of SpaceX, really, was to make as much progress as possible, to advance rocket technology to the point where hopefully we can establish a colony on Mars, or at least get as far along that way as we can. We'll just try to go as far as we can.
Well.. yeah. I don't know, we're probably - we're building a ship that NASA's going to use and that other people will use. In terms of an astronaut corps, I mean, I kinda think, like, what we should be transporting are scientists and engineers. Not pilots, really. Dragon doesn't need pilots. It obviously goes there now with just cargo. We just sent up 40 mice. They were not piloting the craft. So really, it's a means of transporting people to the Earth-Moon orbit region in order to do science, basically. Potentially to the Moon to do some exploration there, but I kind of think it should be easy to go on a spacecraft. Like, you should be able to just get on with no training and go. It shouldn't be hard.
Well, a lot of things that are envisioned in sci-fi, books, it's a wide range of course, a lot of things that are envisioned do make sense and like I said, there isn't some other way to land on the Moon. You can't land on the Moon with parachutes and airbags. Due to the lack of atmosphere over there.
I don't know. I think it's - I'm hopeful there will be multiple colonies on Mars. There's certainly - from a SpaceX standpoint, we don't mean to do anything on an exclusionary basis, we're just trying to get there. We'd love to have that debate. Oh, is it too American? Okay, maybe, but we've got the base on Mars, who cares. But, I think, if there was an American base on Mars it would certainly prompt other countries to want to establish their own base on Mars too, but I do think it would be better to have competition than cooperation. Yes, I think we'd be better off with competition rather than insisting - like, in the space station we got the international space station but when governments are all forced to go in lockstep, it tends to not make things go faster. We want some sort of positive competitive element, I think. So, we don't want people going to war of anything, just some positive competitive element like the Olympics. If people compete hard and it's good sportsmanship and everything, then the net result is better than if ...
like if there was no competition. Olympics with no competition wouldn't make any sense. So, I think some positive competitive thing would be better and we should definitely not insist that all countries go at the same pace or some collection of countries go at the same pace, that would slow things down dramatically and maybe not even happen. [Encourage ESA.] Yeah, ESA, Chinese space agency, everyone, yeah.
Well, I think any natural resource extraction on Mars would be - the output would be for Mars. It definitely wouldn't make sense to transport Mars stuff 200 million miles back to Earth. Honestly, if you had like crack-cocaine on Mars, in like prepackaged pallets, it still wouldn't make sense to transport it back here. It's be good times for the Martians, but not back here. Resources would be for a colony to use.
The beamed energy thing is interesting. I think it is a worthy area of research. I think it's worth trying to make something work. Try to get something to orbit or a really high delta-velocity with beamed energy and see how well does it work in practice. I do think there's - I mean, I'll state some concerns but these concerns are not meant to say that we shouldn't work on them. I'll preface it by saying we should work on it. I think there are some scaling challenges with beamed energy. If you say, what's the actual power output you need to send, say, a Falcon 9 class vehicle to orbit, and it's a very very big number. You start needing like, woah, we need like the power of like the eastern seaboard, ya know, to sort of send something Falcon - call it Falcon Heavy class, what do you need to send something like that to orbit, it's really a huge amount of energy, or a huge amount of power, to be precise. Actually, the power level you need is enormous. You don't need, maybe not that much on an energy basis, but you can't just tell everyone to turn their lights off in Florida. So then you need like a huge power plant or a huge capacitor bank or a huge high power density battery array. So, I'd like to see how well does it scale, and then you say, what's the cost of the huge power plant and the huge laser array, and that sort of thing and how does that compare to the cost per unit mass if you just carry your own oxygen with you and have a lower ISP and don't do any of those things.
You actually have to allow expansion at the terminals. Where-ever the terminals are, you have to have that length of expansion and then in the pylons that are supporting it, you actually need to allow each pylon to stretch in x. So, it's - you can't hard constraint it at the pylons.
Yeah, I could probably do 10 or 15 more minutes.
We're not really going to try to get resources on the Moon, because that'd be useful if you're on the Moon but not for bringing it back to Earth. So, if there's a Moon base, I'd expect they'd extract resources, but for themselves. I'm going to try to get through a bunch of questions, so I'll make my answers short.
I think we should be very careful about artificial intelligence. If I were to guess at what our biggest existential threat is, it's probably that. So, we need to be very careful with artificial intelligence. I'm increasingly inclined to think that there should be some regulatory oversight maybe at the national and international level, just to make sure that we don't do something very foolish. "With artificial intelligence we are summoning the demon." You know all those stories where the guy with the pentagram and the holy water is sure that he can control the demon, didn't work out. HAL9000 would be easy, it's way more complex than - I mean, it'd put HAL9000 to shame, yeah, like a puppy dog.
Communications is certainly very important. We're going to need tera-bit level communications between Earth and Mars which necessarily means that you're going to want a tight beam, like a laser communication system or something like that, and relays - sort of satellites that relay it - because sometimes Mars is on the other side of the Sun, so you gotta bounce the photons around the Sun, not through it, and yeah, so I think communications are going to definitely be important. I also see that, on Earth, there's a lot of potential for space-based communications. I think that there's a huge amount of room for growth for having satellite communications systems that provide high bandwidth global coverage, and we'll need the same for Mars.
Haha, I say bravo. I mean, I thought it would be awesome if there was a space elevator. I wouldn't hold my breath. I mean, I don't think it's realistic but I'd love to be proven wrong. I always think of, like, Charlie and The Chocolate Factory when I hear the space elevator, ya know, because people sort of imagine it's like an elevator, you press up and now you're in space. This is extremely complicated. I don't think it's really realistic to have a space elevator. Put it this way, at the point at which we have a bridge from LA to Tokyo, which I think is a much easier problem, then - ya know, how about across the Atlantic, some sort of 2000 mile long bridge, or 3000 mile long bridge, something like that would be made of carbon nanotubes. I don't think we've got a carbon nanotube footbridge so far, let alone some enormous 60,000 mile long space elevator. Anyway, I think it's - it's not the thing that I think makes sense right now but if somebody can prove me wrong that'd be great.
Well, the illustrations that I've seen basically has them using a bunch of SpaceX rockets and Dragon spacecraft. I'm like, okay, if they want to buy a bunch of Dragons and Falcon 9 rockets, that's cool. We'll certainly sell them. I mean, I don't think they've got anywhere near the funding to buy even one, so I think therefore it's unrealistic, and I think trying to go to Mars in Dragon is less than ideal. It's at least - well, if you go real fast it's maybe a three month journey and normally it would be more like a 6 to 8 month journey. That's a long time to spend in something with the interior volume of an SUV. I'd recommend waiting for the next generation of technology.
Well, ya know, I think it would not work. It would just be an illustration on a page that doesn't have real hardware. That would be the difference. I just don't think space elevators are like a very sensible thing, ya know.
Yeah, absolutely. What we're planning to do over time is go to 100% renewable power generation for our Supercharge stations. We've sort of temporally not added solar power, because in the interests of just having national and international coverage, so you can drive anywhere in the US, Europe or Asia using Superchargers, we haven't constrained that so that every Supercharger has to have solar panels. There are a few that have solar panels, most don't. But in the long term..
. all of them will either have solar panels or otherwise get their power from renewable sources, and in the long term I expect it to be solar panels to a stationary battery pack, so that the solar panels can charge the stationary battery pack over the course of the week and then that stationary battery pack and buffer the energy and release it during peak times. What we see with Superchargers is huge differences in usage. You can imagine, when people go away for the weekend, like Friday nights and Saturday nights - Friday nights and Sunday nights, huge peak usage. People are going somewhere, like a family trip for the weekend, but say, Wednesday at 11am, low usage. So, you want to have a stationary battery pack, solar panels and then it could work even if the power grid goes down. That'd be cool I think, to have something like even post-apocalypse you can still drive around.
I think that suggests that we're trying to be helpful. If there's anything that Tesla can do that's helpful and doesn't distract us from making cars, then we're happy to do that. We've also done battery packs and power trains for Mercedes and for Toyota. Right now, the fundamental constraint is on battery production. So, we have to solve that constraint in order for there to be any scaling up of electric cars and that's why we've got the Gigafactory, and things have to be affordable. "Basically, people need a compelling and affordable electric vehicle. That is the holy grail, and we're trying to get there as fast as we can."
Yeah, it's funny you should mention that. I think that's Heinlein's best book, honestly.
Haha. Well, I don't think that - well, our behavior is just - we're just going to keep trying to make rocket technology better and better. I mean, I think the time frame for the SLS sending people to Mars is pretty far out there - and if it does that's great, but it's really - what we need is a technology system that's capable of sending large numbers of people and cargo to Mars. It's cool to send one mission, sure, but that's not the thing that changes humanity's future. The thing that really matters is being able to establish a self-sustaining civilization on Mars, and for that I don't see anything being done except SpaceX, honestly. That's not to say SpaceX will be successful but I don't see anyone even trying.
Thank you.
Yeah, I think certainly safety's really important. I think it's particularly important when there's the potential for mass destruction. Ya know, it's - I think AI is something that is risky at the civilization level, not merely at the individual risk level, and that's why it really demands a lot of safety research. "That's why I've committed to fund $10 million worth of AI safety research, and I'll probably do more." I think that's just the beginning.
Right, absolutely. Really, all we're saying at Tesla is that we want to be able to sell our cars directly to consumers in Texas. I think this is directly in line with the ethos of Texas. In fact, restricting what consumers can do, in terms of buying direct, is extremely un-Texan. It's very weird that it even exists. I mean, if you think of something like Michael Dell's company Dell Direct. Dell started his company in Texas selling direct to consumers. If the same laws had existed for computers as it does for cars then Dell wouldn't exist, or it would be in some other state. It really - I think it's something on the books that most Texans aren't even aware of, that is fundamentally un-Texan and needs to be changed. The law currently says that in order to sell a car in Texas you have to sell through a franchised dealer, but this exists only for alcohol and cars, which is weird. Probably that shouldn't exist either, but it's just weird that it's cars. What the - ya know. We can sell direct in every other country in the world, and every state in the United States except for about half a dozen. We're just asking for essentially a modification of the law to allow for us to sell direct to consumers.
Yeah, I don't think we're a huge threat to the car dealers. Yeah, we might grow from 0.1% to 1% perhaps, or 2%, but it's not something that I think is fundamentally a threat to the car dealers and the problem is that the incumbent car dealers have a conflict of interest. They make all their money from selling gasoline cars. For them to then tout the advantages of an electric car when most of their money is coming from gasoline cars - it's a conflict of interest. They're not going to do that. So, if we were to go through them, we'd fail.
"No, if they've been punching us in the face, they shouldn't expect we're going to be their friend."
A month? If we can get it down to low single digit weeks, I think that's ideal.
Yeah, sure they should. Maybe there should be, at some point, some increased tax on electric gas or something like that to match that of gasoline cars, but I can't imagine - like I said - that there's very much revenue generated from Texans on gasoline, given the low price of gasoline.
It wasn't punishment. It certainly wasn't helpful, but it wasn't punishment, no. We are actually still strongly considering the long term - and please, I hope this doesn't become some huge news article - but we are considering, in the long, future vehicle and battery plants and Texas would certainly be a strong contender for those.
Yeah, I've been doing business in Texas for 13 years - when we established the rocket development facility in McGregor, near Waco. That's worked out really well for us. It's the most advanced rocket development facility in the world at this point. It's something the people of Texas are very proud about. We're establishing the first commercial orbital launch site in the world at Boca Chica near Brownsville. So I think - I mean, I love Texas. I come here a lot. Certainly a big big fan.
I think, within the space community, certainly, it was I think well understood. The mission was completely successful in delivering cargo to the space station, which was the primary mission, and I would consider partly successful in trying to do something that's never been attempted before - which is to land a rocket stage successfully. Every other rocket in the world, the rocket stage is basically smashed into the atmosphere, explode and then further explode when they hit the ocean, or the steppes of Kazakhstan or something like that - if it's a Russian rocket. There's a whole industry collecting rocket parts out there in Kazakhstan. They have a launch site in Plesetsk as well. Basically, the Siberian steppes collectively. But all the other rockets, like the European rockets and the Boeing and Lockheed rockets, all of their stages basically just smash bits and land somewhere at the bottom of the ocean. What we were trying to do was to land our rocket stage - because it's a very difficult thing. This thing is coming in from hypersonic velocity. It's got to multiple relights of the main engine. It's got attitude control thrusters. It's got slosh baffles. It's got these hypersonic grid fins. This is extremely difficult.
I expected it to fail. Yeah yeah, I said we've got a best of 50% chance and even that I said I'm kinda making that up. Ya know, I said I don't really know.
Umm... no, I think we would not have come. "No, we wouldn't have come because it would have been quite rude to not have offered incentives." It more like - what I mean is, a state has to show that it really wants a company to be there. Ultimately, SpaceX will spend hundreds of millions of dollars on that facility. Vastly in excess of what the incentives would be. So, how much do the incentives really make a difference in the grand scheme of things? Not that big of a difference but it's sort of like, it's - you don't feel welcome. It doesn't feel like this state really cares unless it does something. There's got to be a little bit of skin in the game. There's got to be some contribution. Ya know, that's all it really is.
No, I don't think it should be a Tesla-only bill. That wouldn't be fair. It should be, perhaps, limited to new technology vehicles or limited to a certain number of stores or something like that. I don't think it should be just for Tesla, but nor should it erode the franchise that they've bought and paid for and put a lot of time into. That wouldn't be right either. It should just be that if somebody hasn't granted them a franchise, they shouldn't be forced to grant them a franchise. It'd be like if Apple came here and wanted to sell computers then with the same legislation they'd have to like, give out Apple franchised stores or something. That wouldn't make any sense.
No, basically, in more than 40 out of 50 states that we sell cars the dealers are doing fine. Nobody's in trouble or.. No terrible thing has happened to the dealers in any of the other states. We currently sell in over 30 countries and these franchise restrictions don't exist in any of those countries, and the dealers are fine there too. Yeah, absolutely, and there's plenty of examples where there are franchise restaurants and company owned restaurants or a mixture of franchise and company owned. Like McDonalds has a mixture of company owned and franchised next door. It works fine. So, I think it's a pretty reasonable thing to ask that if we want to sell direct that we have the right to do so and that consumers in Texas have the right to choose how they want to buy their car.
I know we're running short on time, but there is one announcement that I'd like to make. This is the transportation forum. We're going to create a Hyperloop test facility. I don't know if people have read about - it's kind of a new mode of transport. [You release a whitepaper in 2013.] Yeah. In order to help things along we're going to create a Hyperloop test track. Something that's maybe on the order of a five mile loop. Texas in the leading candidate. [Does the state have to not be a jerk?] There's no quid pro quo here. It certainly would be nice. It would be appreciated. [When?] We're just figuring that out. I was just discussing it with some members of my team last night, who are pretty excited about doing this. [How much will it cost?] I actually don't know, but we're not asking for any money from the state. [Entirely funded by you?] Yeah. Yeah, but if somebody wants to chip in, I won't stop them. This would be kind of a sub-scale track and the thing we were talking about last night - it's not fully formed, we're just sort of figuring it out - is to have a test facility where different teams from university or even little companies that people form, could use this test track to validate their ideas on designing the pod system for the Hyperloop. The test track is an expensive capital item, so if we can build the test track and then offer that for use by companies or the teams of students to try out their pod design. Something that we might end up doing - or, at least it sounded good last night, after a couple of drinks - [Your management style is okay with me.] Shoot from the hip. There's this really awesome competition called Formula SAE where students groups work together to design and build a race car and then they race it at the end of the season and whoever builds the best race car wins. [Like an adult soapbox derby.] Yeah, but it's pretty sophisticated. Some of our best engineers have come from that program and really learnt who to do great engineering as a result of that. So I think it could be kind of fun to have some sort of Formula SAE thing for the Hyperloop. People could compete on, say, who could make the pod go the fastest. Maybe compete on other dimensions. I think that could be pretty fun. We're going to talk to the Formula SAE organizers and see if they think this would be good. [Texas is the leading candidate.] Yeah.
Thank you.
What this represents is the official opening of SpaceX Seattle. It is intended to be a significant engineering campus. It's going to be the focus of SpaceX's satellite development activities. In LA we have the rocket development and our Dragon spacecraft, but this is going to be the center of our satellite development activities. What we want to do for satellites is revolutionize the satellite side of things, just as we've done with the rocket side of things. And I should also say it's possible for you to do both, so if you end up working at SpaceX Seattle, you can also work on rockets and manned spacecraft as well as satellites. It's not exclusively one or the other, but in terms of the center of gravity, for satellites will be here in Seattle. The reason for it is pretty straight forward. There's a huge amount of talent in the Seattle area and a lot of you guys don't seem to want to move to LA. It has its merits, by the way. So instead, we're going to establish a significant operation here.
I want to tell you a little bit about what we want to achieve with the satellites and why that's important. The satellites constitute as much, or more, of the cost of a space-based activity as the rockets do. Very often actually, the satellites are more expensive than the rocket. So, in order for us to really revolutionize space, we have to address both satellites and rockets. We're going to start off by building our own constellation of satellites but that same satellite bus and the technology we develop can be also be used for Earth science and space science, as well as other potential applications that others may have. So, we're open to both building our own as well as - we're definitely going to build our own but it's something we're going to be able to offer to others.
The focus is going to be on creating a global communications system. This is quite an ambitious effort. We're really talking about something which is, in the long term, like rebuilding the Internet in space. The goal will be to have the majority of long distance Internet traffic go over this network and about 10% of local consumer and business traffic. So that's, still probably 90% of people's local access will still come from fiber but we'll do about 10% business to consumer direct and more than half of the long distance traffic.
As you guys may know, the speed of light in vacuum is somewhere 40% to 50% faster than in fiber. So you can actually do long distance communication faster if you route it through vacuum than you can if you route it through fiber. It can also go through far fewer hops. Let's say you want to communicate from Seattle to South Africa. If you look at the actual path it takes, it's extremely convoluted. It'll follow the outline of the continents. It'll go through 200 routers and repeaters and the latency is extremely bad. Whereas, if you did it with a satellite network, you could actually do it in two or three hops. Well, maybe four hops. It depends on the altitude of the satellites and what the cross-links are. But basically, let's say, at least an order of magnitude fewer repeaters or routers and then going through space at 50% faster speed of light. So it seems from a physics standpoint inherently better to do the long distance Internet traffic through space.
And then space is also really good for sparse connectivity. If you've got a large mass of land where they're relatively low density of users, space is actually ideal for that. It would also be able to serve as, like I said, probably about 10% of people in relatively dense urban/suburban environments - cases where people have been stuck with Time Warner or Comcast or something this would provide an opportunity to do [unintelligible due to cheering]. It's something that would both provide optionality for people living in advanced countries/economies as well as people living in poorer countries that don't even have electricity or fiber or anything like that. So it's a real enabler for people in poor regions of the world and it gives optionality for people in wealthier countries. It's something that I think definitely needs to be done, and it's a really difficult technical problem to solve. So that's why we need the smartest engineering talent in the world to solve the problem.
At the same time, "we also need to make sure we don't create SkyNet." Ironically, the server room at SpaceX jokingly was called SkyNet. Fate has a great sense of irony. We really need to make sure that doesn't come true. I think, because I'm talking to a technical audience, I can say that if there's some AI apocalypse it's going to come from some collection of vast server farms terrestrially based, not via the space based communication system. I did think about that though.
Anyway, I think that this is a fundamentally good thing to do. I can't think of any major downsides. I think it's an important thing to do. It should happen and I think that it is something where, properly designed, it could give people gigabit level access, 20 to 30ms latency, everywhere on Earth. That would be pretty great. That same system we could leverage to put into a constellation on Mars, because Mars is going to need a global communications system too and there's no fiber optics or wires or anything on Mars. We're definitely going to need that. We're going to need high bandwidth communications between Earth and Mars. So I think a lot of what we do in developing an Earth-based communication system could be leveraged for Mars as well. Crazy as that may sound.
So yeah, that's the basic story and I'd encourage you to spread the word and tell people about it that you think are great. As I said, the office is going to grow slowly at first. We're not going to hire a zillion people. So, if at first SpaceX doesn't respond to you, or something, please come back again in the future. It's just really hard to add 500 people all at once and have that be good. We are going to grow and make this a very significant SpaceX Seattle campus but we want to do so very carefully by adding the right expertise at the right time. So, like I said, if for no reason you don't get a response because - I don't know, our recruiting team is deluged or something like that, please reapply in like six months and don't take any offense by that. We're just trying to grow in a careful and considered way.
Okay, I'm happy to take some questions from you guys if you want to just yell out some questions.
I wouldn't worry too much about the space junk thing. Actually, we should worry about ourselves creating the space junk, but at the altitude in question there's really not a lot out there. We're talking about something about the 1100 km level and there's just not a lot up there. The thing we need to make sure of is that we obviously.. we don't want to create any issues. So we're going to make sure that we can deal with the satellites effectively and have them burn up on reentry and have the debris kind of land in the Pacific somewhere. That's what we need to make sure of, because the number of satellites we're talking about here is ultimately around 4000. Actually, technically, the number under discussion was 4025 but there's probably false precision there. That's kind of what we're thinking right now. There's less than half that number of active satellites currently in existence. So this will be more than double the number of currently active satellites.
Timing.. yeah. In the past I've been a little optimistic on schedule. So, I'm trying to recalibrate, but I'm thinking we should be able to get version one active in about five years. That wouldn't be the full half of long distance and 10% of all Earth's connectivity, but a useful version one that has global coverage, except at the poles - we're aiming for about five years. Then there would be successive versions every two or three years after that. To get to where the system is really at full capability, I think it's probably 12 to 15 years. But yeah, major revisions certainly every five years, maybe a little sooner than that. If you figure in terms of major revisions, version one in five years, version two maybe five years after that, version three five years after that, is a rough time line.
It's going to be, I think, quite a lot of software. Like, all in software and firmware it's probably half of the office. It's probably half software, half firmware - sorry, half software/firmware, half hardware. That seems like - and then over time the software might actually exceed the hardware number because it's just - if you have something that's highly configurable then it tends to, over time, weigh towards the software.
This would be not using cubesats. Satellites we have in mind are going to be quite sophisticated. They'd be a smallish satellite but with big satellite capability. By smallish I mean, in the few hundred kilogram range.
Well, it can't be free, because then we'd go out of business. No it can't be free to the user, I don't think so. I mean, this would cost a lot to build. I mean, ultimately over time, the full version of the system, we're talking about something that would be $10 or $15 billion to create, maybe more. Then, the user terminals will be at least $100 to $300 depending on which type of terminal. "This is intended to be a significant amount of revenue and help fund a city on Mars." "Looking in the long term, and saying what's needed to create a city on Mars? Well, one thing's for sure: a lot of money." So we need things that will generate a lot of money.
Yeah, we're not going to - yeah. Spectrum that is omni-directional and wall penetrating, that spectrum is extremely rare, and limited. Spectrum that is not wall penetrating and that is very directional, is not rare. It's sort of the difference between a laser beam and a floodlight. You can have lots of laser beams, in limit that would be a real tight beam communication. Whereas there's high scarcity for cellular bandwidth, there is not high scarcity for space to earth bandwidth. As long as it's not roof penetrating. So I don't seen bandwidth as being a particularly difficult issue.
Compared to the Iridium Satellites which was a mere 70, we're talking more than an order of magnitude larger volume. This is something I don't think we're - I mean, there may be some similarities to the way the Iridium network was done but we would have - in terms of the production waste produced, it would be similar to the way a car is produced or consumer electrics. So, if we take things even a step further, if a satellite didn't work you'd just take it out of the constellation and deorbit it. As opposed to going through this super-intense acceptance procedure to make sure the satellite works. Normally the way satellites are done is they're like Battlestar Galactica - there's like one of them and it's really giant and if this thing doesn't work it's terrible, like the whole business collapses. But if you have a large constellation, you can afford to lose individual satellites and it doesn't affect the constellation very much. An analogy might be between, say, mainframes and PCs. If you want to have a big data center serving millions of people, it's way better to have an array of cheap PCs then it is to have a few mainframes. Basically that's how the Internet is served, with millions of PCs on racks instead of mainframes.
Teaming with local propulsion companies? Not really. I don't think so. We're going to build our own propulsion unit. People in the space industry have a really difficult time manufacturing things. They're pretty good at designing them in the first place but they don't actually know how to make them in volume. It's possible we could license some technology or something but the main propulsion system we have in mind for the satellite is a Hall effect thruster which, not to trivialize it too much, is basically like a loud speaker, okay. It's like a magnetic field accelerating ions, it's pretty easy to make. I mean, there's degrees of Hall thruster, like how good it is, but at the end of the day it's not that hard. So it's not clear that it would make sense to outsource something that's not that hard.
There's multiple elements to the regulatory things. There's the ITU filings and the financial qualifications you need, and we've done the filings associated with that. That says whether you can actually put the satellite network up. Then there's the - whether it's legal to have a ground link. Obviously any given country can say it's illegal to have a ground link. From our standpoint we could conceivably continue to broadcast and they'd have a choice of either shooting our satellites down.. or not. China can do that. So we probably shouldn't broadcast there. If they get upset with us, they can blow our satellites up. I mean, I'm hopeful that we can structure agreements with various countries to allow communication with their citizens but it is on a country by country basis. I don't think it's something that would affect the time line. At least, it's not going to take longer than five years to do that. Not all countries will agree at first. There will always be some countries that don't agree. That's fine.
Okay, this would be a low Earth orbit constellation, so it would actually be moving quite a bit.
The base station would have a phase array antenna with a switching time that's of the microsecond to low millisecond level. So it would only take a few milliseconds seconds to switch from one satellite to the next. So, as opposed to having a dish that has a slew rate.
How do you power satellites? With solar panels, and then batteries for low Earth orbit satellites because they go through Earth's shadow then you have to have batteries to handle when they're in shadow. Yep.
Umm, biggest concern about success, well, I think it's important to assume that terrestrial networks will get much better over time. Ya know, one of the mistakes that Teledesic made was not assuming that terrestrial networks would get much better over time. So we need to make sure that the system we design is good, even taking into account significant improvements in the terrestrial systems, but I do think there's an important difference between what we're doing and say Teledesic. In the case of Teledesic they were trying to talk to phones and that gets back to that problem of a roof penetrating situation and particularly with a signal that's coming from space. If you're in a skyscraper it's got to go through 27 floors to reach you, it's not going to happen. There's nothing that will, ya know short of like a neutrino, but you're not going to have a neutrino phone. In the case of Teledesic, I think they had some fundamental issues there.
I think we're going to have to pay a lot of attention to security. It would really be unfortunate if it got hacked and taken over. That would be bad. Whether it was by AI or by some group of whatever. I think it's going to be important to have some sort of low level ROM chip that's got a code that you can like - go into a safe mode. So, it's like listening for a code, and then that ROM chip can't be updated. So we could always trigger a safe mode situation to regain control of the system but it's going to require a lot of thought to make sure we are able to protect it from any hacking attempts. But it's much like Google or Facebook.. they handle these kinds of issues.
I'll try to answer a few questions in the back there.
I think we won't take SpaceX public for a very long time. What I've said is: when we're doing regular flights to Mars, that might be a good time to go public. But, before then, because the long term goals of SpaceX are really long term, like - it takes a long time to build a city on Mars - that doesn't match with the short term time frame of public shareholders and portfolio managers that are looking at the sort of two to four year time horizon. So I think we'll need to hold off going public for a while. Now, that said, what we do do is we do offer stock options and restricted stock and we do liquidity events every six months. So, we have the company valued by an outside firm every six months and we will do stock buybacks every six months. It sort of, I think, gets the best of both worlds where you have stock liquidity but you don't have the massive fluctuations that you have with a public company where at any given week - like, for example with Tesla, with any given week it's like dealing with a manic depressive. It's very confusing. I'll say things that I think if people understand what I'm saying the stock should go up, but it goes down, like what the hell, and vice versa. I think it's actually quite distracting to have public stock and the time to go public, ideally, is where things are fairly stable. Then we will go public, but like I said, I think we get the benefits of stock appreciation over time without the downside of going public, and then we'll go public maybe twenty years from now or something like that.
There needs to be some sort of architecture for establishing a city on Mars, which means huge numbers of people and ultimately millions of tons of cargo. How do we do that? It really comes down to an economic question. Which is - there's some economic activation energy, a cost-per-unit-mass to the surface of Mars, at which point we'd have a self-sustaining civilization there, but beyond which we would not. It's up to debate about how much that might be, but I think at a personal level there needs to be enough of an intersection of sets of people who can afford to move to Mars and people who want to move to Mars. If those two coincide then there will be a colony, otherwise there will not be a colony. I will eventually go to Mars. ...But to put that in concrete terms, it needs to be at least a half a million dollars or less to move to Mars, I think. Ideally much less, ya know, but if it's much more than that then there probably won't be a colony. So that's the basic idea. What I hope to present, hopefully towards the end of this year, is a transport architecture that I think could achieve that number. There's a big difference between thinking that I can achieve that number and actually achieving that number. There's lots of people who suggested, 'hey, wouldn't it be a good idea to go the Moon?', but much harder to actually go to the Moon. It's a hard execution problem. In fact, I think with most ideas it's the execution is really the hard part, and in order to make it happen you have to have lots of talented people working together towards a common goal to achieve that. That's what I want to put together at SpaceX.
Alright, thanks everyone.
Alright. Welcome everyone to the announcement of Tesla Energy. What I'm going to talk about tonight is a fundamental transformation of how the world works, about how energy is delivered across Earth. This is how it is today - it's pretty bad. It sucks - exactly. I just want to be clear because sometimes people are confused about it - this is real. This is actually how most power is generated, with fossil fuels and if you look at the curve - that's a famous curve, the Keeling curve that shows the growth in CO2 concentration in the atmosphere and every year it ratchets up - it gets higher and higher and if we do nothing that's where it's headed - to levels that we don't even see in the fossil record. I think we collectively should do something about this and not try to win the Darwin award. For us and a lot of other creatures too. The way the grid works today is you've got coal, natural gas, nuclear, hydro and then wind and solar, but not enough wind and solar obviously. That's the grid typically in most countries and you'll notice something - there's quite a big difference in peak to trough usage. The peak usage is typically at least twice the trough usage. Please bare that in mind as I'm going to reference that again later in the presentation. That's an important point.
What we're here to talk about is the solution. I actually think it's a fairly obvious solution but it's something that we need to do, and the solution is in two parts. Part one is the Sun. We have this handy fusion reactor in the sky, called the Sun. You don't have to do anything, it just works. It shows up every day and produces ridiculous amounts of power. A lot of people are unclear on how much surface area is needed to generate enough power to completely get the United States off fossil fuels. Most people have no idea, they think that it must be some huge amount of area - like maybe you need these satellites in space - space solar power, if anyone should be in favor of space solar power it should be me - but this is completely unnecessary, because actually very little land is needed to get rid of all fossil fuel electricity generation in the United States. That blue square there is the land area that's needed to transition the United States to a zero-carbon-emission situation. It's really not much and most of that area is going to be on rooftops. You won't need to disturb land, you won't need to find new areas, it's mostly just going to be on the roofs of existing homes and buildings. I really think that image is an important one to bare in mind when people are thinking about solar power - how much will it take? Is it going to take some enormous amount? No, it's just that blue square.
"Now, the obvious problem with solar power is that the Sun does not shine at night. I think most people are aware of this." So, this problem needs to be solved. We need to store the energy that is generated during the day so that you can use it at night, and also even during the day the energy variation varies. There's a lot more energy generated in the middle of the day than at dawn or dusk. So it's very important to smooth out that energy generation and retain enough so that you can use it at night.
Now, what you may not have noticed in that earlier slide where I showed the blue square, was that there was one red pixel. In the blue square was a red pixel. We've now zoomed in so that you can see that red pixel. That is the size of the batteries needed to transition all of the United States to being solar with batteries. Okay, it is a very tiny amount. One pixel. Just remember that. One pixel is the size of the batteries needed to bring the United States to have no fossil fuel generated electricity. This is no room at all. Not a problem for solar or batteries.
The issue with existing batteries is that they suck. They're really horrible. They look like that. They're expensive. They're unreliable. They're sort of stinky, ugly, bad in every way, very expensive - you have to combine multiple systems - there's no integrated place you can go and buy a battery that just works. Which is what people really want to buy. We have to come up with a solution. That's the mission piece. That's the thing that's needed to have a proper transition to a sustainable energy world. The missing piece is what we're going to show you tonight.
Alright.
This is a product we call the Tesla Powerwall. If you look back against that wall you'll see a lot of them, in different colors, so you can pick your favorite color, and it looks like a beautiful sculpture on the wall. It's very important - I want to point a few things that are very important about this. The fact that it's wall mounted is vital because it means you don't have to have a battery room. You don't have to have some room full of nasty batteries. It means that a normal household can mount this on their garage or on the outside wall of their house and it doesn't take up any room. It's flat against the wall, it has all of the integrated safety systems, the thermal controls, the DC to AC converter, it's designed to work very well with solar systems right out of the box and it addresses all the needs.
If you're thinking about buying a battery, what does this provide you? Well, it gives you piece of mind. If there's a cut in the utilities you're always going to have power, particularly if you're in a place that's very cold. You don't have to worry about being out of power if there's an ice storm. You actually could go, if you want, completely off-grid. You can take your solar panels, charge the battery packs and that's all you use. So it gives you safety, security, and it gives you a complete and affordable solution and the cost of this is $3500. It's designed so you can stack them on the wall. So if you look at the wall in the back, you'll see that they're some that are paired up. So you can have two or you can actually stack up to nine of the Powerwalls. If you've got a pretty big thing going on you could have 90 kWhs - it's a lot.
Very importantly, this is going to be a great solution for people in remote parts of the world where there's no electricity wires or where the electricity is extremely intermittent or extremely expensive. So you can take the Tesla Powerwall and it can scale globally. In fact, I think what we'll see is something similar to what happened with cell phones vs landlines where the cell phones actually leapfrogged the landlines and there wasn't a need to put landlines in a lot of countries or in remote locations. People in a remote village or an island somewhere can take solar panels, combine it with a Tesla Powerwall and never have to worry about having electricity lines. I think is going to be great. Electricity lines are not the most pretty thing in the world. Being have to have a solution that just works where ever you are, I think is going to be incredibly helpful to people who don't have electricity today.
You can order the Powerwall right now, on the Tesla website. In fact, go to teslaenergy.com and you can by the Tesla Powerwall right now. We're going to start shipping in approximately three or four months. Initially the ramp will be slow because these packs will be made in our Fremont factory and then next year the ramp will go much much higher as we transition to the Gigafactory in Nevada.
So, this is a good solution for homes and perhaps for some small commercial applications, but what about something that scales to much much larger levels? For that, we have something else. We have, the Powerpack. The Tesla Powerpack is designed to scale infinitely. You can literally make this into a GWh class solution. You could go gigawatt class or higher - in fact, we already have one utility that wants to do a 250 MWh installation using the Powerpack. I think it'd be a good idea - I think this would be a good time to transition the power that we're using in the building to being battery power of course. So let's go to the camera feed to - let's go check out the power meter. Oh wow, the grid it's actually zero. This entire night has been powered by batteries. Not only that, the batteries were charged by the solar panels on the roof of this building. "This entire night, everything you're experiencing is stored sunlight."
When I say scalable, I really mean scalable. We can do gigawatt class installations with the Powerpack. The whole system is literally designed for infinite scalability. We could power a small city, like Boulder with a GWh class pack and we can keep going here. What I want to do is explore what's really needed to transition the world to sustainable energy. Is this actually possible? Is it something that is within the ability of humanity to actually do or is it some insurmountable super-difficult impossible thing? It's not. With 160 million Powerpacks you could transition the United States. With 900 million you can transition the world. You can basically make all electricity generation in the world renewable and primarily solar. Then, going a little further, if you want to transition all transport and all electricity generation and all heating to renewable you need approximately two billion Powerpacks. Now that might seem like an insane number and I'm very tempted to do the billion thing that - I must restrain my hand - but in order to - like, two billion Powerpacks is that a crazy number? Is that an impossible number? It is not, in fact. The number of cars and trucks that we have on the road is approximately two billion, and every twenty years approximately that gets refreshed. There's a hundred million new cars and trucks made every year. The point I want to make is that this is actually within the power of humanity to do. We have done things like this before. It is not impossible, it is really something that we can do.
"In fact, it's something that obviously we're starting to do, with Gigafactory 1. The way we're approaching the Gigafactory is really like it's a product. We're not really thinking of it in the traditional way that people think of a factory. Like, a building with a bunch of off-the-shelf equipment in it. What we're really designing in the Gigafactory is a giant machine." It's actually - think of it like a product of Tesla. We're making this really big product that doesn't happen to move - but it's really big, and that's what we're doing - Gigafactory version 1. We're building that in Nevada right now, and there will need to be many Gigafactories in the future. I do want to emphasize that this is not something that we think Tesla is going to do alone. We think that there is going to be many other companies building Gigafactory-class operations of their own and we hope they do and the Tesla policy of open sourcing patents will continue for the Gigafactory, for the Powerpack and for all these other things.
We want to show people, most importantly that this is possible. If you look at that - that's the future we could have. Where the curve slowly rolls over and goes to zero - no incremental CO2 - that's the future we need to have. That's something that - and the path that I've talked about, the solar panels and the batteries - it's the only path that I know of that can do this, and I think it's something that we must do and that we can do and that we will do.
Thank you all for coming tonight and I hope you had a great time.
Umm.. sure. Yeah, that's about right. Obviously with Model X production ramping up quite heavily in Q4, depending on how that ramp goes, and obviously it's difficult to predict that with clarity, but our volume essentially doubles in Q4. Depending on how the ramp goes - I want to emphasize that because what people don't entirely appreciate is that there's several thousand unique parts in a car and if even one of those parts is not available - for any reason - then you can not scale production. So, ya know. Essentially the production ramp goes according to the unluckiest worst performing supplier, or part of Tesla, but that said we do expect to see a significant ramp in Q4 for the X and have something that may be as much as two times other quarters in Q4. As far as demand for that, we do not see that being a problem. Obviously there are huge advance orders for the X and we see a steady climb in demand for the S.
Yeah, in the case of the X, it ended up being a lot different than the S than we originally anticipated. So the development took a lot longer and we were distracted solving all sorts of issues with the S during that time, which made it difficult for us to allocate engineering resources to the X when there were issues to be solved with the S. I think we'll do a lot better with the X and we're paying close attention to some of the things that are different about the X to ensure that they're not an issue. Particularly the falcon wing door and the second row seats. So I'm feeling pretty good about things, but because that production ramp just scales exponentially, depending on where that exponential curve falls across a quarterly boundary can make quite a significant effect on the production deliveries in that quarter. So that's why - it's quite easy to predict if it's continuous but quite hard if it's discrete with arbitrary quarterly cut offs. I really think the X is going to be a great car. I just drove the latest prototype today and it's like, wow. This is by far the best SUV.
The Z credits thing is not like - it moves things by like 2%. Ya know, it's not super-material. I'm still not sure what the point of your question is. You realize Z credits don't sell for 100 cents on the dollar, they sell for like 50 cents or sometimes less, and there are not always customers for the Z credits. It's not a big deal. As more of our production goes overseas, obviously there are no Z credits overseas and as our sales increase outside of California, or Canada, those are not Z states. The Z stuff is an increasingly small part of the picture, over time. [There's hundreds of vehicles in the battery swap program.] Yeah. Yeah. We've steadily increased the invitation list. We've just found there's not a lot of interest in people doing pack swaps. So we make the invitations and we get a small percentage of them that actually take us up on the invitations.
Yeah, let me just talk more broadly about the response to the Powerwall and Powerpack, because I think that's really the question you should be asking. The response has been overwhelming, okay, like crazy. In the course of less than a week we've had 38,000 reservations for the Powerwall, 2500 reservations for Powerpack. The Powerpack, it should be noted, typically this is bought by utilities or large industrial companies - for heavy industrial work - so typically Powerpack is at least ten Powerpacks per installation. So if there's 2500 reservations, that's actually 25,000 Powerpacks. Powerwall, also, we suspect is probably an average of 1.5 to 2 per installation. So 38,000 reservations is more like 50 or 60,000 actual Powerwalls. So that - I mean there's no way that we could possibility satisfy this demand this year. I mean we're basically sold out until next year, in the middle of the first week, it's crazy. We had 2500 requests from companies that want to distribute and install the Powerwall and Powerpack. We can't even respond to them. This is - we have to, like, triage our response to those who what to be a distributor. So, it's like crazy off-the-hook. Yeah, and it seems to have gone super viral. For the specific case of Solar City, what they're referring to is that there's two versions of the Powerwall - there's the daily cycling version and there's the power backup version. One's energy optimized and one's daily cycling optimized. For the daily cycling optimized one, the economics - it is true in the US, with rare exception - are more expensive than utility. So, if somebody wants to do a daily cycling - basically go off-grid, it's going to be more expensive than being on-grid. This doesn't mean that people won't buy it, because there are people who want to go off-grid on principle or they just want to be independent. That's what the Solar City comment is about.
Honestly I'm amazed by the fact that there's been such an outpouring of enthusiasm and talent for the Hyperloop competition. I've just been talking backstage with Steve and some of the designs, I think, are really amazing. What we really intended to do with the Hyperloop was really to spur interest in new forms of transportation. And I'm starting to think that this is really going to happen. It's clear that the public and the world wants something new and I think you guys are going to bring it to them. So congratulations.
We're thinking about the competition that'll take place later this year, perhaps in the summer, and the goal is going to be to actually come up with something that can ultimately be used. So we want it to be something that, if you were to extend the 1 km track to hundreds of kilometers, that the system would still work. Also I think we want to introduce ideas for how the track should be built. Like how do you do a multi-hundred km track and make the thing work. Because we want to bring this to fruition and show people that something new and great can happen and it doesn't have to be the same old thing.
So the basic idea with the competition is we're going to try and get to the highest possible speed in the 1 km track and then, of course, you have to stop before the end. There will be a foam pit at the end, so you might recover some pieces of your pod. But the idea is to accelerate you will have a big screen showing the speed of the pod as it's going through the Hyperloop. There's going to be a big crowd, I think. Particularly since it's in L.A. So there's going to be a lot of people watching. So people will see the speed get up to some crazy number, and they'll be watching it brake and there'll be a lot of tension 'is it going to brake in time?!' and I think it's going to be a really exciting event. I'm looking forward to it.
Once again, thank you for all your efforts. I could do a bit of Q&A if you'd like
So I guess just fire away!
First of all I want to acknowledge the help of great people at SpaceX and Tesla who worked with me on it, but actually what inspired me was I was stuck in L.A. Traffic and I was about an hour late for a talk and I was thinking 'man there's got to be some better way to get around.' So, at first the idea that I had actually made no sense and wouldn't work, but I kind of shot my mouth off at the event and said 'yeah I've got this idea for a new form of transport that I think would be really cool.' I thought people would just not ask me about it in the future, but then they did. So it was like 'oh man, I'd better come up with something that actually DOES work ' Then we actually only came to a solution that we thought would work maybe two days before the date that I published it. I basically just put it on the website and did 30 minutes of Q&A and then it just went bananas. Like it went super-viral. I wasn't actually expecting that to happen. I just wanted to do what I said I would do, which is write the paper.
That's a good question. When you consider the system as a whole, what matters is: whatever the end thing is built that people actually use, the cost and the reliability and the utility have to be as good as possible. So the fundamental physics and economics should drive the true solution. I'm not sure we know what that is yet, and that's really what we're doing here. This is a journey of discovery to say 'what IS the right solution?' There is also the 'wheels' camp, I should mention. I think it sort of depends on if you have a lot of twists and turns in the track and you're essentially limited on G's then wheels would actually make the most sense for such a track. If you have a really straight shot and you can go a really long straightaway then you may exceed the speed wheels can really handle and overheat the wheels or have them not function very well. So I think for wind-ey tracks it would probably be wheels and then it's sort of up in the air what it would be for a longer range track where you really try to push the limit. Because ultimately you could go trans-sonic in the tube, and trans-sonic on wheels would probably be questionable
We were just trying to make it difficult! No, I think overall there may be some tweaks before the actual competition because we really want this to be something that you can see an evolutionary path to a real system. Real Hyperloops that can be deployed around the world and used by millions of people. So for the competition itself, because it's a 1 km track, there's certain things you could do to kinda game it but that really wouldn't work on a 200 mile track. We want this to be something where the ideas are extensible to practical use.
I think the tests on the 1 km track are going to be fairly interesting, and then I think that'll be pretty exciting and get a lot of attention. And then we'll try to do a longer track, like a 5km track. I'd encourage people that are interested to sort of just join the competition. Just generally sort of support the idea of new forms of transport. Even if ultimately what gets built is something that's quite different from what I wrote about in the paper, I think that would still be great. You know, if we're making people's lives better, getting them to places conveniently with more safety and faster I really like that idea that you could live in one city and work in another city and you can move fast enough that you can actually do that. It frees people up. Just gives people more freedom.
Probably, if somebody was going to build a working Hyperloop and try to make it work "I would advocate starting with the simplest useful system. So I'd probably advocate wheels. And then you can sort of say 'OK it's working ' Essentially, if you're trying to create a company it's important to limit the number of miracles in series." You want to start off with something that's the most doable and expand from there. At SpaceX we started off with what we thought was the smallest useful orbital rocket (doing roughly 1000 pounds to orbit). And it's a good thing we did that, because we really didn't know what we were doing and the first three rockets didn't work. If we had tried to do something much bigger or more complicated then we probably would have run out of money and died; we barely made it as it is. So, that in general I think is good advice for people creating a company: start with the minimally useful system - something that you think is still compelling - but then leave future technologies for future upgrades.
On the application of the Hyperloop?
Oh, sure, yeah yeah. Actually on Mars you basically just need a track. On Earth the air density is quite high but on Mars it's 1% of Earth's atmospheric density so probably you might be able to have a road honestly. You'd go pretty fast. But it would obviously have to be electric because there's no oxygen so you could have really fast electric cars or trains or things. Electric aircraft
Yeah, definitely! I have a good feeling about this. I think the work that you guys are doing is going to blow people's minds. I mean they really have no idea that there's this level of sophistication going into pod design and then, like I said, we also want to get some work on what's the most economical way to build the test track because things get complicated over long distances where the landscape and subside and rise a little bit and then you have earthquakes and things. I think, given this level of enthusiasm, there's no question we're going to have another Hyperloop competition. I think it's going to get better and better.
I actually don't know. I think wherever it gets built would be great. The thing that's really going to convince people is if they can take a ride in it. So, wherever it's built, it needs to be something that gets used a lot. Where ideally the economics prove out and people like riding it. Wherever that's done I think those are the important criteria for it to expand more broadly and be used widely throughout the world.
I came up with the name, yeah. I guess it was sort of a loop, ya know. You go back and forth in a loop I thought, in the limit as it got more and more sophisticated, you should be able go to hyper-sonic velocity. So it's sort of a hyper-sonic velocity tube.
It might be. I mean, I'm just keen on seeing it happen somewhere. It's exciting and inspiring to think about new forms of transportation or new technologies that make people's life better. Wherever they happen, I think it's great. As soon as it happens somewhere and people see it really works out I think it'll quickly spread throughout the world.
You want to do a lot of dry runs with your pod. Test it out very thoroughly in as close to the competition conditions as possible. That's the most likely thing to lead to success. Because it's amazing how much even a small thing that goes wrong can take something that would have been maybe a winning pod but ends up in the crash pit.
We don't have any specific plans to back Hyperloop companies. Right now we're just trying to, in general, support the idea and support innovative thought in transport. It's possible we would back a team but we're trying not to favorite one organization over another; we're trying to be as neutral as possible and just generally be helpful.
Well, I have been thinking about the vertical takeoff and landing electric jet a bit more. I think I have something that might close; I'm quite tempted to do something about it.
Actually that's generally what they thought. In starting SpaceX they definitely thought I was crazy. One of my best friends complied a long video of rockets crashing and made me watch the whole thing. There's some other friends of mine that had been involved in a rocket startup: they said it was a terrible idea. But I kind of thought that we had a really tiny chance of succeeding anyway. Like maybe on the order of 10% or something. So people said it would probably fail and I would agree with them. And it was very close; we just barely made it with the fourth launch succeeding of SpaceX. I think ultimately seeing is believing: seeing physical hardware moving and doing things is what convinces people.
I think as soon as it's shown to work, shown to work safely, and that the economics are good it is important to bear in mind both the physics and economics of a system like this I think it would get deployed all around the world. Certainly in high-density cities like Delhi. I did forget to mention on the ideas front I think this is really a very simple and obvious idea and I wish people would do it build more tunnels. Tunnels are great. It's just a hole in the ground. It's not that hard. But if you have tunnels in cities you would massively alleviate congestion. And you could have tunnels at all different levels. You could probably have 30 layers of tunnels and completely fix the congestion problem in high density cities. So I strongly recommend tunnels.
Well I didn't really think I would do these things. I just knew I wanted to be involved in things that had at least the potential to change the world, and that would be at the forefront of technology. I was basically going to be working on advanced energy storage technologies for electric vehicles in grad school at Stanford and then the internet came along. I was like 'well, I could try working on a new form of ultra-capacitor' which is what I was trying to develop, but then I wasn't sure success was one of the possible outcomes. So maybe it would succeed maybe it wouldn't. But then the internet was really something that was going to change the world and most people outside of Silicon Valley didn't even know it existed. So I thought 'I'm going to be involved in the internet, I can help build a few things there and get back to electric cars later' which is what happened. Then on the space thing: SpaceX didn't actually start out as a company, I was just sad that we had not sent people to Mars. So it actually started out as I wanted to try to fund a small philanthropic mission to Mars, to send a small greenhouse to the surface of Mars. So you'd have the furthest life's ever traveled, the first life as we know it on Mars, and you'd have this great money shot of green plants on a red background. So that would be something that I think would get the public excited. And then if the public got excited they would give NASA more money and we could continue the dream of Apollo. That was the intention. And then as I learned more and more it became clear that, unless there was a fundamental improvement in rocket technology, an exciting future in space was not possible. In order for us to be a space-faring civilization and out there among the stars, we need dramatic improvements in rocket technology. In particular, reusable orbital rockets. So then I tried starting SpaceX to solve that problem. But, like I said, "I thought 'it's probably not going to work.' But then for the philanthropic mission, the greenhouse to Mars, I was 100% certain of losing the money that I put in there. So being only 90% likely to lose it for SpaceX seemed like an improvement."
Yeah, it's cool. You know SpaceX has got a big test facility / rocket-development facility depending on what you consider 'far' or 'near'- it's not THAT far from here. We've got a big development facility in McGregor so I'm there quite a lot. Always have a good time.
The world economy will move in cycles and we'll have recession and boom and bust times. I think, generally, working on something new and exciting gets people fired up to take action. It could help a little bit. I think generally one should always expect there's going to be a boom and a bust period in economies and in recession times everything seems gloomy and in boom-y times everything seems amazing, but really it's kind of a sine wave.
Uh yeah, we would certainly
SpaceX and Tesla are always looking for great engineering talent. I would definitely encourage people to apply if they were interested in working on rockets or electric cars or batteries.
Ok how many of these are there? You know what, anyone who wants those signed bring them back and I'll sign it.
Yeah uh, we're building the interior to look nice and feel futuristic. It needs to feel like a real spaceship.
Hopefully there's more than one company that builds Hyperloops. As long as there's competition, competition is good for innovation. Ideally you'd want an industry where there's at least three or four entities competing. That, I think, tends to lead to the best level of innovation because any company that sort of stays stationary with their technology will be exceeded by their competitors.
Falcon 9 Heavy is supposed to launch towards the end of this year. I'd say maybe late summer.
Yeah, absolutely. Even Falcon 9 can send something to Mars. So if Falcon 9 could send maybe 3-4 tons to mars, Falcon Heavy could send maybe 12-13 tons to Mars.
Hopefully.
Well I think we'll send men and women, but Venus would be I wouldn't recommend Venus. Venus would be a hot, high-pressure acid bath. But Mars is very doable. The moon is doable. You could do some of the moons of Saturn and Jupiter, potentially asteroids. But I think the most important thing is to create a self-sustaining city on Mars. That's, I think, the critical thing for maximizing the life of humanity; how long will our civilization last. If we are a multi-planet species it's likely to last a lot longer. And if we have a self-sustaining city on Mars that's going to create a huge forcing function for the improvement of space transport technology. And then that could ultimately lead us to go beyond the solar system.
I'll have to take that as my last question. Thank you for coming, I think you've done an amazing job.
Thank you very much for having me, look forward to talking about the SpaceX Mars architecture.
And what I really want to try to achieve here is to make Mars seem possible, make it seem as though it's something that we can do in our lifetimes and that you can go, and is there really a way that anyone can go if they wanted to? I think that's really the important thing.
So first of all, why go anywhere, right? The... I think there are really two fundamental paths. History is going to bifurcate along two directions: One path is we stay on Earth forever, and then there will be some eventual extinction event I don't have an immediate doomsday prophecy but there's... it's eventually, history just that there will be some doomsday event.
The alternative is to become a space-faring civilization and a multi-planet species, which I hope you agree that is the right way to go.
Yes?
That's what we want.
So how do we figure out how to take you to Mars and create a self-sustaining city? A city that it is not merely an outpost, but could become planet and its own right, and thus we could become a truly multi-planet species.
There are... Sometimes people wonder, what about other places in the solar system, why Mars?
Well, just to sort of put things in perspective, this is what, this is an actual scale of what the solar system looks like. So we're currently in the third little rock from the left.
That's Earth.
Yeah, exactly.
And our goal is to go to the fourth rock on the left that's Mars. But you can get a sense for the real scale of the solar system, how big the Sun is, Jupiter, Neptune, Saturn, Uranus, and then the little guys and on the right are Pluto and friends.
This sort of helps see it, not quite to scale, but it gives you a better sense for where things are. So our options for going to... For becoming a multi-planet species within our solar system, are limited.
We have, in terms of nearby options, we've got Venus. But Venus is a high pressure... A super-high-pressure hot acid bath. So that would be a tricky one. Venus is not at all like that the goddess. This is not, in no way similar to, to the actual goddess. So it'd be really difficult to make things work on Venus. Mercury is also way too close to the Sun. We could go potentially onto... One of the moons of Jupiter, or Saturn, but those are quite far out much further from the Sun. A lot harder to get to.
It really leaves us with one option if we want to become a multi-planet civilization, and that's Mars.
We could conceivably go to the moon, and I have nothing against going to the moon, but I think it's challenging to create a... Become multiplanetary on the moon because it's much smaller than been a planet. It doesn't have any atmosphere, it's not as resource-rich as Mars, it's got a 28-day day whereas the Mars day is 24-and-a-half hours. And in general Mars is far better suited to ultimately scale up to be a self-sustaining civilization.
Just to give some comparison between the two planets... They're actually remarkably close in a lot of ways. And in fact we now believe that early Mars was a lot like Earth. And in fact if we could warm Mars up, we would once again have a thick atmosphere and liquid oceans.
So where things are right now, Mars is about half again as far from the sun as Earth. So still decent sunlight. It's a little cold, but we can warm it up. And it has a very helpful atmosphere which, in the case of Mars, being primarily CO2 with some nitrogen, and argon, and few other trace elements, means that we can grow plants on Mars just by compressing the atmosphere. And so it's... And it has nitrogen, too, which is very important for growing plants.
It would be quite fun because you have gravity, which is about 37% that of Earth, so you'd be able to lift heavy things and bound around and have a lot of fun. And the day is remarkably close to that of Earth, and so we just need to change that bottom row, because currently we have 7 billion people on earth and zero on Mars.
So there's been a lot of great work by NASA and other organizations in early exploration of Mars and understanding... what Mars is like, where could we land, what's the composition of the atmosphere, where is there water water ice, I should say and so we need to go from these early exploration missions to actually building a city.
The issue that we have today is that if you look at a Venn diagram, there's no intersection of sets of people who want to go and can afford to go. In fact right now, you cannot go to Mars for infinite money.
Using traditional methods, you know if you've taken a sort of Apollo-style approach, an optimistic class number would be about $10 billion a person. So for example, in the Apollo program, the cost estimates are somewhere between $100 to $200 billion in current-year dollars. And we sent 12 people to the surface of moon. Which was an incredible thing and probably the greatest achievements of humanity.
But that's a steep price to pay for a ticket. That's why these circles only just barely touch. So you can't create a self-sustaining civilization if the ticket price is $10 billion per person.
What we need is a closer, is to move those circles together.
If we can get the cost of moving to Mars to be roughly equivalent to a median house price in the US, which is around $200,000, then I think the probability of establishing a self-sustaining civilization is very high. I think it would almost certainly occur. Not everyone wants to go in fact, I think a relatively small number of people from Earth want to go but enough would want to go, and who could afford the trip, that would happen.
You keep looking at sponsorship and I think it gets the point where we're almost anyone if they saved up, and this was their goal, they could ultimately save enough money to buy a ticket and move to Mars. And Mars would have a labor shortage for a long time, so jobs would not be in short supply.
So it is a bit tricky. We have to figure out how to improve the cost of trips to Mars by 5,000,000%. So this is just not easy and... I mean, it sounds like virtually impossible, but I think there are ways through it.
This translates to an improvement of approximately four-and-a-half orders of magnitude.
These are the key elements that are needed in order to achieve a four-and-a-half order of magnitude improvement. Most of the improvement would come from full reusability, somewhere between two and two-and-a-half orders of magnitude. And then the other two orders of magnitude would come from refilling in orbit, propellant production on Mars, and choosing the right propellant.
So I'm gunna go into detail on all those.
Full reusability is really the super-hard one.
It's very difficult to achieve reusability on even an orbital system. And that challenge becomes even you substantially greater for a system that has to go to another planet.
But as an example of the difference between reusability and expandability in aircraft and you could actually use any form of transport, you could say a car, bicycle, horse if they were single-use, almost no one would use them. They'd be too expensive.
But with frequent flights you can take something like an aircraft that costs $90 million, and if it were single-use, you'd have to pay half a million dollars per flight. But you can actually buy a ticket on Southwest, right now, from LA to Vegas, for $43 including taxes. So that's, I mean, that's a massive improvement right there. It's showing a four-order-of-magnitude improvement.
Now this is harder. The reusability doesn't apply quite as much to Mars, because the number of times that you could reuse the spaceship the spaceship part of the system is left less often because the Earth-Mars rendezvous only occurs every 26 months.
So you get to use the spaceship part roughly every 2 years. Now you get to use the booster and the tanker as frequently as you'd like, and so it makes that's why it really makes a lot of sense to load the spaceship into orbit, with essentially tanks dry, have it have really quite big tanks that you then use the booster and tanker to refill while it's in orbit, and maximize the payload of the spaceships, so that when it goes to Mars you really have a very large payload capability.
So refilling in orbit is one of the essential elements of this.
Without refilling in orbit, you would have a half-order of magnitude impact, roughly, on the cost. By half of magnitude I think audience mostly knows but what that means is, each order of magnitude is a factor of 10. So not refilling in orbit would mean a 500%, roughly, increase in the cost per ticket.
It also allows us to build a smaller vehicle and lower the development costs, although this is quite big, but it would be much harder to build something that's five to 10 times the size. And it also reduces the sensitivity of performance characteristics of the booster rocket and tanker.
So if there's a shortfall in the performance of any of the elements, you can actually make up for it by having one or two extra refilling trips to the spaceship. So this, it's very important for reducing the susceptibility of the system to a performance shortfall.
And then producing propellant on Mars is very obviously important.
Again if, if we didn't do this, it would have at least a half-order of magnitude increase in the in the cost of the trip, so a 500% increase in the cost the trip.
It'd be pretty absurd to try to build the city on Mars if your spaceship just kept staying on Mars not going back to Earth. You'd have this like massive graveyard of ships. You'd have to like do something with them. So it really wouldn't make sense to leave your spaceships on Mars.
You really want to build a propellant plant on Mars and send the ships back. And Mars happens to work out well for that, because it has a CO2 atmosphere, it's got water ice in the soil, and with H2O and CO2 you can do CH4 methane and oxygen, O2.
Picking the right propellant is also important.
Think of this as maybe there's three main choices, and they have their merits. But kerosene or rocket-propellant grade kerosene, which is also what jets use rockets use a very expensive form, a highly refined form of jet fuel, essentially, which is a form of kerosene. It helps keep the vehicle size small, but because it's a very specialized form of jet fuel, it's quite expensive. The reusability potential is lower. Very difficult to make this on Mars, because there's no oil. So really quite difficult to make propellants on Mars, and then propellant transfer is pretty good but not great.
Hydrogen, although it has a high specific impulse, is very expensive. Incredibly difficult to keep from boiling off, because liquid hydrogen is very close to absolute zero as a liquid. So the insulation required is tremendous, and the energy cost on Mars of producing and storing hydrogen is very high. So we look at the overall system optimization, it was clear to us that methane actually was the clear winner. So it would require maybe anywhere from your 50% to 60% of the energy on Mars to refill the propellants, using a propellant depot, and just the technical challenges are a lot easier.
So we think we think methane is actually better, on, really, almost across the board. And we started off initially thinking that hydrogen would make sense, but we came to the conclusion that the best way to optimize the cost-per-unit mass to Mars and back is to use an all-methane system, technically a deep-cryo methalox.
So those are the four elements that need to be achieved. So whatever architecture, whatever system is designed, whether by SpaceX or anyone, we think these are the four features that need to be addressed in order for the system to really achieve a low cost per trip to the surface of Mars.
And this is a simulation of the overall system.
So what you saw there is really quite close to what we will actually build. It will look almost exactly what you saw, so this is not an artist's impression. These... The simulation was actually made from the space engineering CAD models.
So this is not, you know, it's not just 'this is what it might look like,' this is what we plan to try and make it look like.
So in the video you got a sense for what the system architecture looks.
The rocket booster and the spaceship take off, load the spaceship into orbit. The rocket booster then comes back it comes back quite quickly, within about 20 minutes and so it can actually launch the tanker version of the spacecraft, which is essentially the same as the spaceship, but filling up the unpressurized and pressurized cargo areas with propellant tanks.
So they look almost identical, this also helps lower the development costs, which absolutely will not be small. And then that the propellant tanker goes up and it will actually go up multiple times, anywhere from three to five times to fill the tanks of the spaceship in orbit. And then once the spaceship tanks are full, the cargo has been transferred, and we reach the Mars rendezvous timing, which as I mentioned is roughly every 26 months, that's when the ship would depart.
Now over time there would be many spaceships. Ultimately, I think, upwards of 1,000 or more spaceships waiting in orbit. And so the Mars colonial fleet would depart en masse, kind of 'Battlestar Galactica' if you've seen that thing, it's a good show so a bit like that. But it actually makes sense to load the spaceships into orbit, because you've got 2 years to do so, and then make frequent use of the booster and the tanker to get really heavy reuse out of those.
And then with the spaceship you get less reuse because you have say, 'well, how long is it gunna last?' Well, maybe 30 years. So that might be 12, maybe 15 flights of the spaceship, at most. So you really want to maximize the cargo of the spaceship and reuse the booster and the tanker a lot. So the ship goes to Mars, gets replenished, and then returns to Earth.
So I'll go into some of the details of the vehicle design and performance, and Im gunna gloss over I'll only talk a little bit about that the technical details in the actual presentation, and then Ill leave the detailed technical questions to the Q&A that follows.
This is to give us a sense of size.
It's quite big, yeah.
And the funny thing is I think in the long term, the ships will be even bigger than this. I think that this will represent, this will be relatively small compared to the Mars interplanetary ships of the future.
But it kind of needs to be about this size, because if, in order to fit 100 people there around in the pressurized section, plus carry the luggage and all of the unpressurized cargo to build propellant plants and build everything from iron foundries, to pizza joints, to you name it we need to carry a lot of cargo. So it really needs to be roughly on this order magnitude. Because if we say, like, the same amount of threshold for self-sustaining studio Mars or civilization would be a million people, well, and you can only go every 2 years if you have 100 people per ship, that's 10,000 trips.
So I think at least 100 people per trip is the right order of magnitude, and I think we may actually made up expanding the crew section and ultimately taking more like 200 more people per flight in order to reduce the cost per person. So, 10,000 flights is a lot of flights, so you really want to ultimately think on the order of 1,000 ships.
It will take awhile to build up to 1,000 ships. And so I think if you say, when would we reach that million-person threshold, from the point at which the first ship goes to Mars, it's probably somewhere between 20 to 50 total Mars rendezvous. So it's probably somewhere between maybe 40 to 100 years to achieve a fully self-sustaining civilization on Mars.
So that's the sort of cross-section of the ship, and in some ways it's not that complicated, really.
It's made primarily of an advanced carbon-fiber. The carbon-fiber part is tricky when dealing with deep cryogens, and trying to achieve both liquid and gas impermeability, and not have gaps occur due to cracking or pressurization that would make the carbon fiber leaky. So this is a fairly significant technical challenge to make deeply cryogenic tanks out of carbon fiber, and it's only recently that we think the carbon fiber technology has gotten to the point where we can actually do this without having to create a liner some sort of metal liner, or other liner, on the inside of the tanks, which would add mass and complexity.
It's particularly tricky for the hot, gaseous oxygen pressurization. So this is designed to be autogenously pressurized, which means that the fuel and the oxygen, we gassify them through heat exchangers in the engine, and use that to pressurize the tanks. So we'll gassify the methane, and use that to pressurize the fuel tank. Gassify the oxygen, use that to pressurize the oxygen tank.
And this compares this is a much simpler system than what we have with Falcon 9, where we use helium for pressurization, and we use nitrogen for gas thrusters. In this case we're autogenously pressurized, and then use gaseous methane and oxygen for the control thrusters.
So really you only need two ingredients for this, as opposed to four, in the case of Falcon 9. And actually five, if you consider the ignition liquid. It's sort of a complicated liquid to ignite the engines that isn't very reusable. In this case we would use spark-ignition.
So this gives you a sense of vehicles by performance, sort of current and historic. I don't know if you can actually read that, but: In expendable mode of the vehicle parts that were proposing, we'd do about 550 tons, and about 300 tons in reusable mode. That compares to Saturn V's max capability of 135 tons.
But I think this really gives a better sense of things.
The white bars show the performance of the vehicle. Like, in other words, the payload-to-orbit of the vehicle. So you can see, essentially, what it represents is: What is the size efficiency of the vehicle? And most rockets, including ours ours that are currently flying the performance bar is only a small percentage of the actual size of the rocket.
But with the interplanetary system, which will initially be used for Mars, we've been able to we believe massively improve the design performance. So it's the first time a rocket's sort of 'performance bar' will actually exceed the physical size of the rocket.
This gives you a more direct sort of comparison.
This is, the trust is quite enormous. We're talking about a liftoff thrust of 13,000 tons. So it will be quite tectonic when it takes off. But it does fit on a pad 39A, which NASA has been kind enough to allow us to use, where they somewhat oversized the pad in doing Saturn V. And, as a result, we can actually do a much larger vehicle on that same launchpad. And in the future we expect to add additional launch locations, probably adding one on the south coast of Texas.
But this gives you a sense of the relative capabilities, if you can read those. But these vehicles have very different purposes. This is really intended to carry huge numbers of people, ultimately millions of tons of cargo to Mars. So you really need something quite large in order to do that.
To talk about some of the key elements of the interplanetary spaceship and rocket booster, we decided to start off the development with what we think are probably the two most difficult elements of the design.
One is the Raptor engine, and this is going to be the highest chamber pressure engine of any kind ever built, and probably the highest thrust-to-weight.
It's a full-flow, stage-combustion engine, which maximizes the theoretical momentum that you can get out of a given source of fuel and oxidizer. We sub-cool the oxygen and methane to densify it. So compared to when propellants are normally used, they're used close to their boiling points in in most rockets.
In our case we actually load the propellants close to their freezing point, and that can result in a density improvement of up to around 10% to 12%, which makes an enormous difference in the actual results of the rocket.
It also makes the it gets rid of any cavitation risk for the turbo pumps, and it makes it easier to feed a high-pressure turbo pump if you have very cold propellant.
Really one of the keys here, though, is the vacuum version of Raptor having a 382-second ISP [specific impulse]. This is really quite critical to the whole Mars mission, and we're confident we can get to that number, or at least within a few seconds of that number, ultimately maybe exceeding it slightly.
The rocket booster, in many ways, is really a scaled-up version of the Falcon 9 booster.
You'll see a lot of similarities, such as the grid fins, obviously clustering a lot of engines at the base, and the big difference really being that the primary structure is an advanced form a carbon-fiber, as opposed to aluminum-lithium. And that we use autogenous pressurization, and we get rid of the helium and the nitrogen.
So, this uses 42 Raptor engines. It's a lot of engines, but we use nine on a Falcon 9, and with Falcon Heavy, which should launch early next year, there's 27 engines on the base. So we've got pretty good experience with having a large number of engines. It also gives us redundancy, so there if some of the engines fail, you can still continue the mission and be fine.
But the main job of the booster is to accelerate the spaceship to around 8,500 kilometers an hour. For those that aren't as familiar with orbital dynamics, really it's all about velocity and not about height. So really that's the job of the boosters. The booster's like the javelin thrower so it's gotta toss that javelin, which is the spaceship. In the case of other planets, though, which have a gravity well that is not as deep. So Mars, the moons of Jupiter, see if we went to maybe even Venus Venus will be a little trickier but for most of the solar system, you only need the spaceship.
So you don't you don't need the booster if you have a lower gravity wells. So no booster is needed on the moon or Mars or any other moons of Jupiter or Pluto. You just need the spaceship. The booster is just there for heavy gravity wells.
And then we've also been able to optimize the propellant needed for boost-back and landing, to get it down to about 7%, of the liftoff propellant load, and we think with some optimization we can get down to about 6%.
And we're also getting quite comfortable with the accuracy of the landing. If you've been watching the Falcon 9 landings, you'll see that they're getting increasingly closer to the bulls-eye. And we think, particularly with the addition of some thrusters, maneuvering thrusters, we can actually put the rooster right back on the launch stand. And then those pins at the base are essentially centering features to take out any minor position mismatch at the launch site.
So that's looks like at the base so we think we only need to gimbal or steer the center cluster of engines.
So there's seven engines in the center cluster, those would be the ones that that move, for steering the rocket, and the other ones would be fixed in position, which gives us the best concentration of we can max out the number of engines because we don't have to leave any room for gimbaling or moving the engine.
And this is all designed so that you could actually lose multiple engines, even at liftoff or anywhere flight, and continue the mission safely.
So for the spaceship itself, in the top we have the pressurized compartment and Ill show you a fly-through of that in a moment and beneath that is where we would have the unpressurized cargo, which will be really flat-packed, in a very dense format. And below that is the liquid oxygen tank.
The liquid oxygen tank is probably the hardest piece of this whole vehicle because it's gotta handle propellant at the coldest level, and the tanks themselves actually form the airframe. So that the air frame structure and the tank structure are combined, as it is in in all modern rockets, and in an aircraft. For example, the wing is really a fuel tank in wing shape. So it has to take the thrust loads of ascent, the loads of re-entry, and then it has to be impermeable to gaseous oxygen, which is tricky, and non-reactive to gaseous oxygen.
So that's the hardest piece of the spaceship itself, which is actually why we started on that element. I will show you some pictures of that later.
And then below the oxygen tank is the fuel tank, and then the engines are mounted directly to the thrust cone on the base. And then there are six of the of the vacuum, the high-efficiency vacuum engines around the perimeter, and those of those don't gimbal. And then three of the sea-level versions of the engine, which do gimbal and provide the steering. Although we can do some amount of steering, if you're in space, with differential thrust on the outside engines.
The net effect is a cargo-to-Mars of up to 450 tons, depending upon how many refills you do with the tanker. The goal is at least 100 passengers per ship, although I think ... we'll probably see that number go to 200 or more.
This chart's a little difficult to interpret at first, but I kind of decided to put it there for people who wanted to watch the video afterwards and sort of take a closer look, analyze some of the numbers.
The column on the left is probably what's most relevant, and that gives you the trip time.
So depending upon which Earth-Mars rendezvous you're aiming for, the trip time at six kilometers per second, departure velocity, can be as low as 80 days. And then, over time, I think we'd obviously improve that, and ultimately I suspect that you'd see Mars transit times of as little as 30 days in the more distant future.
So it's fairly manageable, considering the trips that people used to in the old days. They'd routinely take sailing voyages that would be 6 months or more.
So on arrival the heat shield technology is extremely important.
We've been refining the heat-shield technology using our Dragon spacecraft, and we're now on version three of PICA, which is 'phenolic impregnated carbon ablator, ' and it's getting more robust with each new version, with less ablation, more resistance, less need for refurbishment.
The heat shield's basically a giant brake pad. So it's like, how good can you make that brake pad against extreme reentry conditions, and minimize the cost of refurbishment. And make it so that you could have many flights with no refurbishment at all.
This is a fly-through of the crew compartment. Just want to give you a sense of what it would feel like to actually be in the spaceship.
I mean, in order to make it appealing, and an increase that portion of the Venn diagram of people actually want to go, it's gotta be really fun and exciting and it can't feel cramped or boring.
So the crew compartment or the occupant department, is set up so that you can do zero-g games, you can float around, there'll be like movies, lecture halls, you know, cabins, a restaurant it will be, like, really fun to go. You're gunna have a great time.
So that propellant plant on Mars.
Again, this is one of the slides I won't go into detail here, but people can think about offline.
The key point being that the ingredients are there on Mars to create a propellant plant with relative ease, because the atmosphere is primarily CO2, and there's water ice almost everywhere. You've got the CO2 plus H2O to make methane, CH4, and oxygen O2, using the Sebatier reaction.
The trickiest thing, really, is the energy source, which we think we can do with a large field of solar panels.
So then to give you a sense of the cost, really the key is making this affordable to almost anyone who wants to go. And we think, based on this architecture, assuming optimization over time, like, the very first flights would be fairly expensive but the architecture allows for a cost-per-ticket of less than $200,000, maybe as little as $100,000 over time, depending upon how much mass a person takes.
So we're, right now, estimating about $140,000 per ton to the surface of Mars. So if a person plus their luggage is less than that, taking into account food consumption and life-support, then we think that the cost of moving to Mars could drop below $100,000.
So, funding. We've thought about funding sources.
And so it's steal underpants, launch satellites, send cargo to space station, Kickstarter of course followed by profit. So obviously it's going to be a challenge to fund this whole endeavor.
We do expect to generate pretty decent net cash flow from launching lots of satellites and servicing the space station for NASA, transferring cargo to and from the space station, and then I know that there's a lot of people in the private sector who are interested in helping fund a base on Mars. And then perhaps they'll be interest on the government sector side to also do that.
Ultimately this is going to be a huge public-private partnership, and I think that's how the United States established, and many other countries around the world is a public-private partnership. So I think that's probably what occurs, and right now we're just trying to make as much progress as we can with the resources that we have available, and just sort of keep moving both forward, and hopefully I think, as we show that this is possible, that this dream is real, not just a dream it's something that can be made real I think the support will snowball over time.
And I should say also that the main reason Im personally accumulating assets is in order to fund this. So I really don't have any other motivation for personally accumulating assets, except to be able to make the biggest contribution I can to making life multiplanetary.
Timelines.
I'm not the best of this sort of thing.
But just to show you where we started off, in 2002 SpaceX basically consisted of carpet and a mariachi band. That was it. That's all of SpaceX in 2002. As you can see I'm a dancing machine, and yeah I believe in kicking off celebratory events with mariachi bands. I really like mariachi bands.
But that was what we started off with in 2002, and really, I thought maybe we had a 10% percent chance of doing anything of even getting a rocket to orbit, let alone getting beyond that and taking Mars seriously.
But I came to the conclusion that if there wasn't some new entrance into the space arena with a strong ideological motivation, then it didn't seem like we were on a trajectory to ever be a space-faring civilization and be out there among the stars. Because in '69 we were able to go to the moon, and the space shuttle could get to low-earth orbit, and then obviously the space shuttle got retired, but that trend line is down to zero.
So I think what a lot of people don't appreciate is that technology does not automatically improve. It only improves if a lot of really strong engineering talent is applied to the problem that it improves. And there are many examples in history where civilizations have reached a certain technology level, and then have fallen well below that and then recovered only millennia later.
So we go from 2002, where we're basically clueless, and then with Falcon 1 the smallest useful orbital rocket that we could think of, which would deliver half a ton to orbit. And then 4 years later we developed, we built the first vehicle.
So we dropped the main engine, the upper-stage engine, the airframes, the fairing, and the launch system, and had our first attempt at launch in 2006, which failed. So, that lasted about 60 seconds, unfortunately.
But it was 2006, 4 years after starting, which is also when we actually got our first NASA contract. And I just want to say that I'm incredibly grateful to NASA for supporting SpaceX, despite the fact that our rocket crashed. It was awesome, I'm NASA's biggest fan so you think thank you very much to the people that had the faith to do that.
So then 2006, followed by a lot of grief, and then finally the fourth launch of Falcon 1 worked in 2008. And we were really down to our last pennies. In fact, I only thought I had enough money for three launches, and the first three bloody failed, and we were able to scrape together enough to just barely make it into a fourth launch, and that thank goodness that fourth launch succeeded in 2008.
That was a lot of pain.
And then also at the end of 2008 is when, where NASA awarded us for the first major operational contract, which was for resupplying cargo to the space station and bringing cargo back. Then a couple of years later we did the first launch of Falcon 9, version 1, and that had about a 10-ton-to-orbit capability, so it was about 20 times the capability of Falcon 1, and also assigned to carry our Dragon spacecraft.
Then 2010 is our first mission to the space station, so we were able to finish development of Dragon and dock with the space station in 2010. Sorry 2010 is expendable Dragon, 2012 is when we delivered and returned cargo from the space station.
2013 is when we first started doing vertical takeoff and landing tests.
And 2014 is when we were able to have the first orbital booster do a soft landing in the ocean. The landing was soft, then it fell over and exploded, but the landing for 7 seconds it was good. And we also improved the capability of the vehicle from 10 tons to about 13 tons to LEO [low-Earth orbit].
And then 2015, last year in December, that was definitely one of the best moments of my life: when the rocket booster came back and landed at Cape Canaveral. That was really... yeah.
So I think that really showed we could bring an orbit-class booster back from a very high velocity, all the way to the launch site, and land it safely, and with almost no refurbishment required for re-flight. And if things go well, we are hoping to re-fly one of the landed boosters and in a few months.
So, yeah, and then 2016 we also demonstrated landing on a ship. The landing on the ship is very important for very high-velocity geosynchronous missions, and that's important for reusability of Falcon 9 because about, roughly a quarter of our missions are sort of servicing the space station, and then there's a few other low-Earth orbit mission. But most of our missions probably 60% of our missions are commercial geo [geosynchronous] missions. So we've got to do these high-velocity missions that really need to land on the ship out to sea. They don't have enough propellant on board to boost back to the launch site.
So looking at the future, next steps.
We were kind of intentionally a bit fuzzy about this timeline. But the... We're going to try to make as much progress as we can, obviously it's a very constrained budget, but we're going to try to make as much progress as we can on the elements of the interplanetary transport booster and spaceship. And hopefully we'll be able to do, to complete the first development spaceship in maybe about 4 years, and start doing suborbital flights with that.
In fact, it actually has enough capability that you could maybe even go to orbit if you limit the amount of cargo with the spaceship. But you have to really, just have to really strip it down. But in tanker form it can definitely get to orbit. It can't get back, but we can get to orbit.
Actually, I was sort of thinking, like, maybe there is some sort of market for really fast transport of stuff around the world, provided we can land somewhere where noise is not a super-big deal rockets are very noisy but we could transport cargo to anywhere on earth in 45 minutes, at the longest. So most places on Earth would be maybe 20, 25 minutes. So maybe if we had a floating platform out off the coast of the USA, off the coast of New York, say 20 or 30 miles out, you could go from, you know, from New York to Tokyo in I don't know 25 minutes. Cross the Atlantic in 10 minutes. Really, most of your time would be getting to the ship. And then it'd be real quick after that.
So there's some intriguing possibilities there, although we're not counting on that.
And then development of the booster. And actually the booster part is relatively straightforward, because it amounts to a scaling-up of the Falcon 9 booster. So there's, we don't see a lot of show stoppers there. So yeah.
But then trying to put it all together and make this actually work for Mars. If things go super-well, it might be kind of in the 10-year time frame. But I don't wanna say that's when it will occur, there's a huge amount of risk, it's going to cost a lot, good chance we won't succeed, but we're going to do our best, and we're going try to make as much progress as possible.
Oh and we're gunna try to send something to Mars on every Mars rendezvous from here on out. So Dragon 2, which is a propulsive lander, we plan to send to Mars in a couple years. And then do probably another Dragon mission in 2020.
In fact, we want to establish a steady cadence that there's always a flight leaving, like a train leaving the station. With every Mars rendezvous we will be sending a Dragon at least a Dragon to Mars, and ultimately the big spaceship so if there are people that are interested in putting payloads on Dragon, you know you can count on a ship that's going to transport something on the order of at least 2 or 3 tons of useful payload to the surface of Mars.
Yes, that's part of the reason why we designed Dragon 2 to be a propulsive lander.
As a propulsive lander, you can go anywhere in the solar system. So you could go to the moon, you could go to... Well, anywhere, really. Whereas if something relies on parachutes or wings, then you can pretty much only well if it's wings, you can pretty much only land on Earth, because you need a runway, and most places don't have a runway. And then any place that doesn't have a dense atmosphere, you can't use parachutes.
But propulsive works anywhere. So Dragon should be capable of landing on any solid or liquid surface in the inner solar system.
And then I was real excited to see that the team managed to do the, all of our Raptor engine firing, in advance of this conference. I just want to say thanks to the Raptor team for really working 7 days a week to try to get this done of in advance of the presentation, because I really want to show that we've made some hardware progress in this direction, and the Raptors are really tricky engines.
It's a lot trickier than the Merlin, because it's a full-flow stage combustion much higher pressure. I'm kind of amazed it didn't blow up on the first firing, but fortunately it was good.
Yeah. It's kind of interesting to the Mach diamonds forming.
So the... Part of the reason for making engines small... Raptor, although it has three times the thrust of a Merlin, is actually only about the same size as well an engine, because it has three times the operating pressure. And that means we can use a lot of the production techniques that we've honed with Merlin.
We're currently producing Merlin engines at almost 300 per year. So we understand how to make rocket engines in volume, so even though the mars vehicle uses 42 on the base and nine on the upper stage so we have 51 engines to make that's well within our production capabilities for Merlin, and this is a similarly sized engine to Merlin, except for the expansion ratio, so we feel really comfortable about being able to make this engine in volume at a price that doesn't break our budget.
And then we also wanted to make progress on the primary structure, so as I mentioned this is really... a very difficult thing to make. Is to make something out of carbon fiber.
Even though carbon fiber has incredible strength-to-weight, when you want one of them put super-cold liquid oxygen and liquid methane particularly liquid oxygen in the tank, it's subject to cracking and leaking and it's a very difficult thing to make.
Just the sheer scale of it is also challenging, because you've gotta lay out the carbon fiber in exactly the right way on a huge mold, and you've gotta cure that mold at temperature, and then it's... just really hard to make large carbon-fiber structures that can do all of those things and carry incredible loads.
So that's the other thing we wanted to focus on, was the Raptor, and then building the first development tank for the Mars spaceship.
So this is really the hardest part of the spaceship. The other pieces are, we have a pretty good handle on, but this was the trickiest one. So we wanted to tackle it first. You get a size for how big the tank is. It's really quite big.
Also, big congratulations to the team that worked on that they were also working seven days a week to try to get this done in advance of the IAC.
And so we managed to build the first tank and initial tests with the cryogenic propellant actually look quite positive. We have not seen any leaks or major issues.
This is what the tank looks like on the inside.
So you can get a real sense for how much, just how big this tank is. It's actually completely smooth on the inside, but the way that the carbon-fiber plys reflect the light makes it look faceted.
So what about beyond Mars?
So as we thought about this system, and the reason we call it a system because generally I don't like calling things systems, because everything's a system, including your dog is that it's actually more than a vehicle. There's this rocket booster, the spaceship, the tanker, and the propellant plant, the in situ propellant production.
If you have all of those four elements, you can actually go anywhere in the solar system by planet-hopping or by moon-hopping.
So by establishing a propellant depot in the Asteroid Belt, or on one of the moons of Jupiter, you can go, you can make flights from Mars to Jupiter no problem.
In fact, even from, even without a propellant depot at Mars, you could do a flyby of Jupiter without a propellant depot.
But by establishing a propellant depot, let's say, you know, Enceladus or Europa, or any there's a few options and then doing another one on Titan, Saturn's moon, and then perhaps another one further out on Pluto, or elsewhere in the solar system...
This system really gives you freedom to go anywhere you want in the greater solar system. So you could actually travel out to the Kuiper Belt, the Oort Cloud.
I wouldn't recommend this for interstellar journeys, but this basic system provided we have filling stations along the way is, means full access to the entire greater solar system.
It'd be really great to do a mission to Europa, particularly.
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