Why SpaceX is running away with the commercial space race

SpaceX, the company founded by Elon Musk, is beating the competition hands down for NASA contracts.

Recently, Eric Berger at Ars Technica sounded the alarm about a peculiar and vexing problem in the commercial space sector. 

SpaceX, the company founded by Elon Musk, is beating the competition hands down for NASA contracts. That includes the old-line aerospace companies such as Boeing and Lockheed Martin and its fellow new space startups.

SpaceX has achieved an unprecedented degree of reliability and low cost with its Falcon 9 and Falcon Heavy launch vehicles. Company engineers recently found and resolved a glitch in the Falcon 9 second stage and returned to flight in two weeks. The ability to reuse the first stage multiple times has left SpaceX’s competition in the dust.

During the second Bush administration, NASA turned to the private sector for launch services for two reasons.

First, commercial companies can deliver goods and services more cheaply and reliably, using fixed-priced contracts, than the government using traditional cost-plus arrangements.

Second, private companies will eventually create a commercial space sector, servicing customers besides the government. The same arrangement worked when the government contracted air mail delivery to private companies, sparking the growth of commercial airlines.

How was it, then, that 20 years after President George W. Bush started the shift to commercial services for space launches, which has since expanded to lunar landers and spacesuits, the private space sector seems to consist of SpaceX and the also-rans? Will Elon Musk’s launch firm forever be the one rocket company to rule them all?

The Ars Technica article offers little in the way of public policy changes to expand the commercial space sector, mainly involving fewer requirements and more financial support. NASA and the Space Force could also expand the market by doing more missions, though that would take Congress appropriating more money.

The problem may sort itself out, eventually. For instance, when the International Space Station (ISS) is replaced by commercial space stations, the number of cargo and crew missions will increase, allowing for the entry of more launch companies besides SpaceX, though it is likely to remain dominant.

Rocket Lab, the New Zealand/American launch company, featured in the recent documentary “Wild, Wild Space,” has picked up its share of the launch market with its Electron rocket, The company is working to make its launch vehicle reusable, which will decrease its costs and increase its competitiveness.

The debut of the Rocket Lab Neutron rocket, which is designed for deployment of satellite constellations, interplanetary probes and human space flight, and is reusable from the start, has been delayed to 2025. While SpaceX has executed more than 76 launches so far in 2024, Rocket Lab has accomplished about half a dozen launches. Rocket Lab has a ways to go before it can challenge SpaceX.

Blue Origin, founded by Jeff Bezos, is the other potential competitor to SpaceX. Thus far, the company has contented itself with providing joy rides to the well-heeled and adventurous on its suborbital New Shepard rocket. It has also waged ineffective lawfare against SpaceX to attempt to slow it down.

All of that is scheduled to change with the advent of New Glenn, Blue Origin’s answer to the SpaceX Falcon 9 and Falcon Heavy. New Glenn, like the Falcon family of rockets, will have a reusable first stage. 

New Glenn is scheduled for its maiden launch no earlier than Sept. 29, when it will loft the Escape and Plasma Acceleration and Dynamics Explorers (ESCAPADE), ironically built by Rocket Lab, to Mars orbit, where it will measure the interaction between the Martian atmosphere and its magnetosphere.

If Blue Origin can compete with SpaceX on price and reliability, it can at last help to build the vibrant commercial space sector needed to open the high frontier to human activity,

However, SpaceX has an ace in the hole that might just cement its dominant position for the foreseeable future. The company is currently testing the Starship, a massive rocket that promises to be able to throw 150 metric tons into space and, with refueling, take that payload anywhere in the Solar System.

Anyone proposing to compete with SpaceX in the long term, Blue Origin or any other company, will have to take Starship into account in their long-term planning. How anyone could replicate the capabilities of Elon Musk’s super rocket is a question whose answer will determine the long-term development of the commercial launch industry.

Mark R. Whittington is the author of “Why is It So Hard to Go Back to the Moon?” “The Moon, Mars and Beyond,” and “Why is America Going Back to the Moon?” He blogs at Curmudgeons Corner.