Is SpaceX versus China the only space race that matters? —

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The private capital fueling the space race in the US still hasn’t produced a competitor to pressure SpaceX, whose primary rival may be China’s space program, not other businesses in the US and Europe, or Russia’s space program.

As the year closes, Elon Musk’s space company has flown 26 missions into space, only topped by the 34 sent into orbit by China’s space agencies. While this is a crude measure of activity, it puts in perspective that the US advantage in space access—40 orbital launches took place in 2020 under US jurisdiction—is due to just one firm.

Meanwhile, new and old companies that promised to match SpaceX—including Boeing, Jeff Bezos’ Blue Origin, United Launch Alliance, and the satellite operator OneWeb—spent 2020 struggling to catch up with Musk’s merry band.

SpaceX has roughly three business lines today: Launching satellites for others, launching and operating its own Starlink internet network, and flying humans into low-earth orbit. It’s leading in all of them.

Launching satellites

Musk’s company dominates the commercial satellite launch market. United Launch Alliance, the joint venture of Boeing and Lockheed, did not launch a single private mission last year, and Arianespace, Europe’s space champion, launched just seven missions, along with one failure.

When it comes to the lucrative business of flying spacecraft for the US military, SpaceX only won 40% of the next big tranche of national security launches, with ULA taking the lion’s share. Yet SpaceX will fly these missions with its existing Falcon 9 rocket, while ULA has yet to perform even a full-scale ground test of its next rocket, the Vulcan, which is expected to debut in 2021.

SpaceX’s fleet of reusable rockets—it set a new record this year by flying one booster seven times—suggests the company has higher margins on its launches, too. The only competitor aiming to rival SpaceX in this department is Blue Origin, which has been developing a large, reusable rocket called New Glenn. However, it failed to win the confidence of the US military, and is also expected to debut sometime in late 2021. Both New Glenn and ULA’s Vulcan depend on engines manufactured by Blue Origin, which were delayed in delivery by more than a year.

All that leaves SpaceX poised for another year of launch dominance, with Musk suggesting the company will aim for as many as 48, with only China’s space agencies likely to rival it in that department.

Operating satellites

One reason SpaceX’s launch rate is a crude measure is that fourteen of its launches carried satellites for the company’s Starlink network. SpaceX doesn’t get paid for those launches; instead, they are an investment in its future as an internet services provider. Starlink became the largest private satellite network in the world this year and launched a beta program that appears to be delivering on the performance Musk promised, though the economics of the business model remain difficult to pin down.

Two votes of confidence came from the US government, with the FCC tapping SpaceX to receive $885 million in subsidies to provide internet in rural areas, while the US military hired SpaceX to build demonstration satellites based on the Starlink design.

Elon Musk is hardly the only entrepreneur to think a globe-spanning, low-flying satellite network is a good idea: OneWeb, the brainchild of satellite-internet godfather Greg Wyler, plunged into bankruptcy and reemerged this year operated by the Indian conglomerate Bharti Global and the government of the UK, and it’s future prospects remain unclear. Amazon has plans to develop a similar constellation called Kuiper and recently claimed to have produced an ultra-affordable antennae for the system, though the company would not share any details.

And, yes, China also has plans for its own mega-constellation, though it’s not entirely clear when those will become a reality. And that underscores SpaceX’s advantage in the space: They are likely a year or more ahead of competitors in the race to win market access and the relatively small number of customers who will pay for this service immediately.

Flying people into space

Perhaps the biggest news in space this year was the debut of SpaceX’s crew Dragon spacecraft, which has now made two trips carrying astronauts to the International Space Station. The flights were another proof of concept for NASA’s strategy of purchasing services rather than vehicles from its contractors, and returned human spaceflight to the US for the first time since 2011. They also promise to open up a range of new opportunities for commercial activity in low-earth orbit, from pharmaceutical research to rumored Tom Cruise films.

And SpaceX stands alone in this regard, too. Boeing, the other company NASA seeks to pay to fly astronauts, suffered a test failure in Dec. 2019 that revealed significant problems in how the aerospace giant approached software design. To get its Starliner back on course, Boeing spent the year reworking its processes. Now, a new test flight is not scheduled until March of 2021, which suggests the earliest it may fly astronauts would be in the summer.

Other private firms in the US are trying to make human spaceflight a reality, at least on the suborbital level. Virgin Galactic, the first entirely space-focused company to trade its securities publicly, saw test successes earlier this year, but in a demonstration this month its spacecraft’s engines failed to ignite. Blue Origin’s reusable New Shepard launch vehicle was expected to fly its first passengers in 2019 and again in 2020, but that did not happen;  Blue has not said whether the company is waiting for specific test data or something else before it is confident that people can safely fly on the vehicle.

Once again, this leaves SpaceX as one of three entities that can fly people into space, with the other two being the Chinese and Russian space agencies.

Who will push SpaceX?

Innovation-wise, SpaceX has plenty of internal pressure from CEO Musk to push the envelope. The development of its next-generation Starship prototype at open-air facilities in Texas and Florida suggest that the company is not resting on its laurels, and even that New Glenn may not have a long run as the only fully-reusable rocket on the market whenever it debuts.

The fundamental logic of SpaceX has always been about competition, pushing the world’s largest buyer of space services, the US government, towards selecting fixed-price contracts offered by multiple bidders. That has forced established companies like ULA and Arianespace to cut costs and develop new technology. And new venture-backed firms have followed in SpaceX’s footsteps across a range of space business models, igniting an industrial renaissance.

However, as the market leader, SpaceX needs a competitor of its own. SpaceX’s first business success was flying cargo missions to the ISS for NASA, a project that proved private firms could develop low-cost space tech. But when it came time for NASA to renew that contract, SpaceX’s prices actually went up, largely because the firm could afford to demand higher prices in the absence of any challenger.

Blue Origin, with the backing of Bezos, the world’s richest man and a ruthless business leader in his own right, has long been seen as the rival that will keep SpaceX from taking over the market completely. The company has long promoted its slow-and-steady philosophy, but the emphasis lately seems to be on the former adjective. Established firms like ULA, Boeing, and Lockheed Martin have been slow to react, relying more on their government affairs departments than their engineers to compete with SpaceX. That too may change after Vulcan debuts, when Boeing rebuilds from its company-wide internal crisis, or if Lockheed integrates its latest acquisition, Aerojet Rocketdyne in a $4 billion deal, into its operations.

Only China, with an ambitious schedule of satellite launches and space exploration, is likely to match Musk. In 2021, the question isn’t whether SpaceX will lead the industry, but whether any other firm can make it a contest.

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