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Elon Musk Warns SpaceX is at Risk of Bankruptcy

Business, Featured

SpaceX rocket launching. | Image from Fortune

Elon Musk warned employees at SpaceX of a potential bankruptcy situation recently.

The day after Thanksgiving, he wrote a companywide email relaying his frustration with the lack of progress in developing the Raptor engines.

These engines power SpaceX’s Starship, the massive, next-generation rocket the company is developing to launch cargo and people on missions to Mars and the moon. SpaceX is currently testing rocket prototypes in southern Texas and has flown short test flights.

Thirty-nine Raptor engines are needed to move orbital launches, which has created a steep decline in engine production as demand outweighs the supply. Eventually, SpaceX would need “1,000 Starships” to colonize Mars, one of Musk’s goals for the future.

Musk’s email to SpaceX employees expressed concern for the departure of former Vice President of Propulsion Will Heltsley earlier in November. Heltsley had been removed from Raptor development before he left, and Musk stated that since then, the company’s leadership has been digging into the program’s problems.

Musk said he discovered the circumstances far more severe than he previously thought.

“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,” Musk said in the email.

He elucidated by saying that Starship is needed to launch version 2 of SpaceX’s Starlink satellites. More than 1,600 V1 Starlink craft and an estimated 100 of the V1.5 line have been launched with the Falcon 9 rocket.

Unfortunately, the Falcon 9 cannot accommodate the bigger V2 satellites, which Musk explains are essential for financial solvency.

“Satellite V1, by itself, is financially weak, while V2 is strong,” he said in the email. “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.”

Starship remains in the test flight phase, but that could change soon. SpaceX is getting ready to launch its first orbital test flight, which could occur as quickly as January or February.

To have full power and capability, SpaceX needs to expedite the production process of the Raptor engine. Musk stated earlier this month that he’s “confident” that the rocket will get into space in 2022.

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