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Consider the idea that he's not actually running the rockets and electric cars any better...
Damn that's actually a scary point. Not just for the rocket/car users themselves but also for the rest of humanity considering that he's 100% the best in those areas at the moment.
Consider that, this too, is not the case.
Look, I appreciate the ethos Musk represents, but that's also the main reason I'm so critical of him. If this guy crashes and burns, which I find likely, the ideas he represents are going to get discredited.
As long as the rockets continue to fly, and land, and the competitors continue to largely not do that, or do that plainly worse, at some point you're asking me to disbelieve the evidence of my own eyes.
I don't believe in ideas, I believe in dollars per kg to orbit.
All I'm asking for is some skepticism of his accounting, surely that's not too much of a stretch?
It is a bigger and bigger stretch as time goes on. If SpaceX were losing money on each commercial flight, you would expect them to minimize the number of those flights and attempt to maximize the number of government flights. Instead, they are turning down almost no commercial partners and have increased launch cadence every year, to the point that they are putting more commercial tons into orbit than everyone else in the world combined, and growing. This would not make sense if it were not profitable for them. You believe they are burning investor capital to do this...why, exactly?
The government overcharge theory doesn't make sense either, because even if they are inflating their bids, they are still beating all competitors and managing to deliver. They could only do this if their costs are unusually low by industry standards. But if that is true, then it is also true that their commercial costs world be lower, so the lower price for those would also be profitable.
The more parsimonious explanation is just that their costs actually are lower, which makes them more profitable at market clearing prices and enables then to discount the market price without losing money.
The same reason Ponzi or Madoff did?
Is that actually true? I think I heard about a case recently where the government didn't even consider alternatives to SpaceX.
Also, I'm pretty sure their overcharging is documented in some cases. I think the Starlinks for Ukraine carried 3x their market price.
I don't follow. Ponzi and Madoff had a clear plan: take a bunch of peoples' money, then don't deliver what you promised, and keep the money. SpaceX is taking investment money, but they are also delivering what they promised, and more. It's hard to see how you stand to gain by actually spending the money you planned to pilfer on providing goods and services to others.
A more plausible theory might be trying to do what Uber or other companies have attempted: burn investment capital long enough to become the near-monopolist in a particular market, then raise prices to achieve massive profits. In some senses, Tesla followed that model to a degree. In the case of SpaceX however, it seems less likely because (a) they haven't actually raised their prices despite capturing the lion's share of the commercial market and (b) most of their competitors are government agencies or government-guaranteed providers who can't be driven out of business this way in any case.
Yes. Except in specific circumstances, all government service must be put for bid, so the government is in principle considering any alternative that meets requirements. You might be recalling this story: https://arstechnica.com/science/2022/10/for-most-science-missions-nasa-is-down-to-a-single-launch-provider/ but the news there is not that the government refused to consider alternatives to SpaceX, it's that every other launch provider except for SpaceX decided not to put themselves up for consideration. If there were companies willing and able to beat SpaceX on price, they could have bid on the job. None did.
It's a market, so "overcharging" is charging more than agreed upon, or using unfair leverage to charge higher than the market clearing price. So, the question is, what satellite internet service provider was offering a better price than SpaceX? If the answer is "none" then it's probably not overcharging. You might argue that SpaceX used unfair leverage because of the dire need of the U.S. government to provide Internet service to Ukraine, but I think if you were to conduct a survey, 3*retail is actually a very reasonable price for any defense contractors, because servicing the military comes along with a lot of additional work and responsibilities. It's also why government launch services cost more - the government demands a lot more from the provider than commercial customers usually do.
Well, why didn't they take it, and fly to a country with no extradition treaty then?
You can take Elizabeth Holmes as another example, though I don't think the comparison is fair, since Musk delivers something tangible, but this would be my guess to what's happening with investor money. Generate hype, get money, use it to make something to generate more hype, repeat.
Nah, it was something else. I'll have to look for it.
Ok, hold up. I don't care whether formally that fits the definition of overcharging, I'm saying that if he's getting the governments to pay him 3x the price tag that he's advertising to everyone else, then that cheaper price tag is arguably fake, and governments are subsidizing it.
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