Is The Leaked Elon Musk Bankruptcy Email A Hoax?
Space Exploration Technologies Corporation's (SpaceX) chief executive officer Mr. Elon Musk has apparently shared concerns about his company's engine production in an email sent out to employees last week. SpaceX is currently developing its Starship next generation launch vehicle system in Boca Chica. This rocket uses different engines than the company's in-service Falcon lineup, and these are the heart of the company's plans for interplanetary exploration as well as its Starlink satellite internet constellation. In the email, Musk concludes by highlighting that his company faces the risk of bankruptcy should it be unable to establish a rapid Starship launch cadence next year.
Elon Musk Wants To Conduct 26 Starship Flights Next Year Suggests Alleged Leaked Email
The email was first reported on by Spaceexplored, and it talks about the difficulties SpaceX is facing with its new Raptor engine. This engine is vastly more complicated than the company's Merlin engines for its Falcon rockets since it reuses all of its pre-burner by-products in the main combustion chamber. In a rocket engine, the pre-burner is the component in which both of the engine's fuel and oxidizer, or one of them, are initially ignited for powering the pumps to drive fuel into the chamber where combustion takes place to generate thrust.
In the Merlin, gases from the pre-burner are exhausted out, while the Raptor reuses them for combustion, a fact which increases its fuel efficiency but makes design, engineering and production difficult. Musk has previously talked about conducting high volume Starship flights by 2022, but he and his company are now waiting for the Federal Aviation Agency (FAA) to finish an environmental review of the Texas facilities, in order to allow SpaceX to apply for a license to conduct orbital Starship flights.
In an October 2020 interview, the executive outlined that:
". . .I think we’ll probably be doing high volume flights I think probably in 2022. So a couple of years from now. I’m trying to make sure that our rate of innovation increases, doesn’t decrease. This is really essential. In fact, if we don’t see something close to an exponential improvement in our rate of innovation, we will not reach Mars. Pure linear doesn’t get there. Well, I’ll be dead anyway if it’s pure linear. If it’s exponential we could get to Mars, we could probably send an uncrewed mission there in maybe four years. There’s a Mars conjunction every 26 months, there was one this year so this means in a couple of years there’s another one. Four years from now there’s another one. I think we got a fighting chance of making that second Mars transfer window.”
Contradictions In Leaked Email Cast Doubt
This rate of innovation seems to have stalled if we're to believe the email shared by Spaceexplored. In it, Musk describes a "severe" Raptor "production crisis" which SpaceX has recently discovered. He also seems set on using Starship to deploy the second generation satellites of his company's Starlink internet constellation.
The (apparently) full text of the email reads as follows:
Unfortunately, the Raptor production crisis is much worse than it had seemed a few weeks ago. As we have dug into the issues following the exiting of prior senior management, they have unfortunately turned out to be far more severe than was reported. There is no way to sugarcoat this.
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.
The consequences for SpaceX if we can not get enough reliable Raptors made is that we then can’t fly Starship, which means we then can’t fly Starlink Satellite V2 (Falcon has neither the volume nor the mass to orbit needed for satellite V2). Satellite V1, by itself, is financially weak, while V2 is strong.
In addition, we are spooling up terminal production to several million units per year, which will consume massive capital, assuming that satellite V2 will be on orbit to handle the bandwidth demand. These terminals will be useless otherwise. [EMPHASIS OURS]
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.
Curiously, it appears as if Spaceexplored is not the only source of the alleged email. Another version was shared by the Twitter account Tesla Tunnel, which is known for its ardent criticism of Musk and his companies. In this version, that we've shared above, while Musk still laments about engine production problems, the bit about his internet constellation is absent. We've highlighted the addition to the Spaceexplored email in the quotation above to mark it.
The reason for this omission is unclear, and it's unlikely that Tesla Tunnel deliberately removed it to protect Starlink. After all, the portion in bold only validates the account's position that Musk overhypes his companies to benefit from government funding, as here for instance. Starlink has won close to a billion dollars in funding from the Federal Communications Commission (FCC) for instance, and this is hotly contested by its rivals.
In the email, Musk claims that SpaceX is "spooling up terminal production to several million units per year", which does fall in line with a job posting on its website that we covered in March this year. However, the company's chief financial officer, Mr. Bret Johnsen, outlined in September that SpaceX was manufacturing 5,000 user dishes per week and that this would increase to "multiples of that" by the end of this year. For SpaceX to churn out one million terminals, it would have to quadruple its weekly production. Currently, it has roughly 750,000 terminal pre-orders, and hopes to scale service to serve 30 million Americans.
Engine production problems are also SpaceX's biggest problem, as Musk outlined earlier this month, commenting that:
We're actually building the factory to make lots of Starships and make lots of engines in parallel. So there will be many, many vehicles. The engine build rate is currently the biggest constraint on how many vehicles we can make.
Engines have also contributed to a Starship prototype exploding earlier this year, and a new factory in Texas should enable SpaceX to manufacture 20 Starships annually by aiming to push out at least 800 Raptors in a year.
Starlink's rivals have also used Musk's tweets to point out that the internet service has a high chance of bankruptcy. Musk has also speculated that Starlink might need as much as $30 billion to sustainably compete with other satellite internet providers.