SpaceX seems to be in troubled waters. An email sent by the company head, Elon Musk to his employees, caught the public eye. The email laid bare the immediate crisis being faced by the space exploration company. So much so, there was talk of liquidation. If SpaceX does not manage to achieve the set goals it may be heading towards bankruptcy. Also Read - Panasonic plans to mass produce next-gen batteries for Tesla in 2023, suggests report
SpaceX is working on a Raptor engine and Elon Musk believes the production of the engine is a disaster. The business tycoon expressed his concern for the company via an email to his employees, which was spotted by SpaceExplored and CNBC. Also Read - Indian states invite Elon Musk to set up Tesla factory, but is it feasible?
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The Raptor is an engine that runs on methane and it has the onus of taking the company’s next generation launch system, called Starship, to outer space.
Elon Musk later tweeted and acknowledged the reality of the situation. He tweeted, “If a severe global recession were to dry up capital availability / liquidity while SpaceX was losing billions on Starlink & Starship, then bankruptcy, while still unlikely, is not impossible.”
NASA has awarded SpaceX a contract of $2.9 billion to develop Starship by the year 2025. The space agency plans to transport astronauts to the Moon’s surface using the Starship. The Starship is completely dependent on the Raptor engine to propel it. Elon Musk even explained why the Falcon won’t be able to do Raptor’s job. Musk claimed that Falcon has neither the volume *nor* the mass to orbit needed for satellite V2.
In order to make things work, Musk has requested his employees to take an ‘all hands on deck’ approach to get out of the ‘disaster’. The company aims to achieve a Starship flight rate of at least once every two weeks next year.
Here’s the letter sent by Musk to his employees
Unfortunately, the Raptor production crisis is much worse than it seemed a few weeks ago. As we have dug into the issues following exiting 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 need all hands on deck to recover from what is, quite frankly, a disaster.
The consequences for SpaceX if we can’t 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, whereas 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.
What it comes down to is that we face genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year.