Elon Musk warns rocket trouble risks bankrupting SpaceX

SpaceX's super heavy-lift Starship explodes during a return landing attempt in December 2020

Credit: REUTERS/Gene Blevins

Elon Musk has warned staff at SpaceX that the company faces a “genuine risk of bankruptcy” if it cannot fix its rocket engines by next year.

Mr Musk’s space venture, which is developing the superheavy Starship rocket that the billionaire hopes will one day transport people to Mars, is said to be in crisis as it struggles to solve a problem with the craft’s engines.

In an email to staff, the Tesla chief executive said issues with the engine were “far more severe than was reported” and that the company’s solvency was at risk if it could not achieve at least one launch every two weeks in 2022.

The email, which was sent ahead of the Thanksgiving weekend in the US, came as Mr Musk demanded staff cancel holidays to get “all hands on deck” at its Hawthorne headquarters.

Mr Musk said that following the departure of senior executives, the company had discovered problems with its rocket engine production were “worse than it had seemed a few weeks ago”, according to the email leaked to Spaceexplored.com.

Mr Musk, who is the world’s richest man, told staff: “I was going to take this weekend off, as my first weekend off in a long time, but instead I will be on the Raptor line all night and through the weekend.

“Unless you have critical family matters or cannot physically return to Hawthorne, we will need all hands on deck to recover from what is, quite frankly, a disaster.”

He added: “What it comes down to, is that we face a genuine risk of bankruptcy if we can’t achieve a Starship flight rate of at least once every two weeks next year.” SpaceX did not respond to a request for comment.

SpaceX’s Starship rocket has drawn headlines with its repeated explosive test attempts, and has yet to reach orbit. Earlier this year its rocket body did complete a successful landing, which is crucial to developing a reusable rocket that can bring down costs for the company.

Mr Musk’s comments are despite a lofty valuation of $100bn for SpaceX from bankers at Morgan Stanley. The space company has raised more than $7bn in funding and is thought to have billions of dollars in revenues from government contracts such as through Nasa.

However, Pierre Lionnet, managing director of research at Eurospace, said: “It [SpaceX] is burning a lot of cash year after year, it is ramping up investment constantly, this has consequences and the cash availability.”

Mr Musk’s Starship rocket, its planned 400 ft high launcher, is expected to cost $8bn to develop, according to Morgan Stanley. Mr Musk has also said the company is prepared to spend $30bn on Starlink, its global satellite network.

Mr Lionnet said this meant any delay to his rocket’s timeline could leave SpaceX burning through cash without incoming revenues.

He said: “To me, Starship is a single point of failure. Without it, satellites cannot be deployed fast enough to generate revenues and pay its costs.”

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