SpaceX CEO Elon Musk warned that while a potential bankruptcy for the aerospace company is unlikely, it is not impossible to do so in the event of a severe global recession. If a severe global recession were to dry up capital availability liquidity while SpaceX was losing billions on Starlink Starship, bankruptcy would not be impossible, Musk tweeted Tuesday.
The company could face a real risk of bankruptcy if its Raptor engine production is not enough for a Starship flight rate of at least once every two weeks, according to a leak by Musk. The Raptor production crisis is much worse than it had appeared a few weeks ago. We have looked into issues after the exit of prior management, but they have turned out to be far more severe than reported. Musk wrote in the email sent over Thanksgiving weekend that 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'm going to be on the Raptor line all night and through the weekend. Musk said that if SpaceX can't get enough reliable Raptor engines made, Starship and Starlink's second-generation satellites won't fly, so all hands are on deck to recover from what is, quite frankly, a disaster.
SpaceX plans to ramp up Starlink terminal production to several million units per year, assuming that Starlink V 2 will be in orbit to handle bandwidth demand, according to the email. Musk stressed that Starlink V 1 is financially weak on its own and stressed that terminals would be useless if they were not used properly. Musk said that they don't have the mass or volume needed to deploy the second-generation satellites, as over 1,000 Starlink V 1 satellites sent to orbit to date were transported on SpaceX's Falcon 9 rockets.
Musk said in a separate tweet that the magnitude of the Starship program is not widely appreciated. He said that it was designed to extend life to Mars and the moon, which requires 1000 times more payload to orbit than all current Earth rockets combined.
Musk told the National Academies last month that SpaceX hopes to launch Starship's first orbital flight in January, subject to the Federal Aviation Administration's environmental review of spacecraft's orbital launch site in Boca Chica, Texas, by the end of the year. The spaceship is designed to carry humans to the moon, Mars and beyond.
The Starship vehicle currently uses six Raptor engines, while its Super Heavy booster uses 29 Raptor engines. Musk said Super Heavy will eventually use 33 Raptor engines, but did not reveal when that change would be made.
He said that there is a lot of risk associated with this first launch, so I wouldn't say that it will be successful, but I think we'll make a lot of progress.
Musk previously revealed that Tesla nearly faced bankruptcy twice, once around Christmas Eve in 2008 and once during Model 3 production from 2017 to 2019.