Elon Musk’s SpaceX Is About To Go Bankrupt

By Faith McKay | 2 months ago

elon musk spacex

SpaceX wants to see humans living on Mars. There are a lot of steps along the way to getting there. The plan requires SpaceX to be financially successful and overcome massive engineering obstacles. Despite how intimidating those ambitions are, Elon Musk continues to publicly appear very optimistic about the plan, and the company’s success widely backs that up. SpaceX has contracts with NASA. The company has hit a $100 billion valuation. However, an email Elon Musk sent to the company over the holiday weekend has leaked, and it paints a very different picture.

“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,” wrote Elon Musk. The billionaire repeatedly mentioned the “Raptor production crisis”. Recently, two vice presidents left the company. One of them was instrumental in the production of the Raptor engine used in SpaceX’s Starship. After their departure from the company, Elon Musk spent Thanksgiving weekend looking into the situation they left behind. “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.”

Elon Musk then claimed that he had previously intended to take Thanksgiving weekend off of work. He said that it was his first weekend off in a long time. However, when he sent the email on the Friday after Thanksgiving, he asked his SpaceX employees to return immediately. He said that unless they couldn’t physically get there due to travel issues, or critical family issues, they needed to be by his side working on the Raptor production crisis. He made it sound as though the situation would be tense doing into 2022, since they would need to be launching Starships every two weeks, using the Raptor engines.

elon musk starship

In the email, Elon Musk outlined that Raptor engines are needed for getting into deep space. The more immediate issue that he stressed was that they need Starships to be launching to bring Starlink satellites into orbit. Starlink is a venture tightly linked to the financial success of SpaceX. It’s considered to be one of the key ways that Elon Musk plans to fund his vision for Mars. If SpaceX can’t fix their Raptor production crisis, they can’t send ships up with satellites for Starlink, which means they can’t grow Starlink at the rate they want to see happening, which, according to Musk, could lead to bankruptcy in the near future. Some experts have put Starlink at a figure of $50 billion a year in earnings for SpaceX, so this isn’t a small issue by any means.

It looks like SpaceX is in serious trouble. It isn’t known how Elon Musk’s employees took to being called in on Thanksgiving weekend, or how they reacted to being told their employer may fold during their holiday weekend. It seems like company morale may be low, which doesn’t seem like the best way to get everyone to work harder throughout the 2022 year, but his employees may be used to it. SpaceX has big ambitions. Perhaps dramatic emails are one more step on the path to Mars.

Meanwhile, Elon Musk is still one of the richest people in the world. Even if SpaceX does go bankrupt, it’s unlikely it’ll really hurt his wallet. Expect Elon Musk to keep right on being Elon Musk. For now though, all his hopes of getting humanity to Mars seem to rest on what SpaceX does in the next few months.