How Does SpaceX Make Money? Business Model of SpaceX

How Does SpaceX Make Money

SpaceX is a US-based aerospace company focused on manufacturing rockets and spacecraft, launching satellites for communications purposes, and space exploration.

SpaceX primarily makes money from government and commercial contracts for the uses or purchase of its rockets. They also make money via StarLink, the company’s global satellite internet provider, and space tourism.

Founded in 2002, SpaceX is focused on improving space exploration and travel by lowering the cost of rockets, rocket launches, and space vehicles. The company was founded by Elon Musk.

SpaceX is a private company. While headquartered just outside Los Angeles, its main production facility is in McGregor, Texas, and its launch facilities are located in Florida.

What is SpaceX & How Does It Work?

SpaceX is one of a handful of privately owned aerospace companies focused on creating low-cost reusable rockets and space vehicles to help reduce the cost of space travel. Its goal is also to help get cargo and other payloads like satellites into space. Newer competitors include Blue Origin and RocketLab. Legacy competitors include traditional aerospace companies like Boeing.

SpaceX has a number of different products: launch vehicles, rocket engines, spacecraft, autonomous spaceport drone ships, and starships. It also owns the Starlink satellite system, which provides satellite internet access.

SpaceX has two launch vehicles that are currently operational. The Falcon 9 is for medium lift payloads, and the Falcon Heavy is for heavy-life payloads. The Falcon 9 can deliver cargo to space and is one of the few commercial spacecrafts to dock at the International Space Station. The Falcon Heavy is able to deliver much larger workloads to low earth orbit or geosynchronous transfer orbit.

SpaceX currently has four kinds of rocket engines: Merlin, Raptor, Draco, and SuperDraco. These are used in the company’s rockets and the spacecraft. Merlin uses liquid oxygen as propellants. Raptor uses both liquid oxygen and liquid methane as a propellant. SuperDraco and Draco, meanwhile, are hypergolic liquid-propellant engines.

The company’s Dragon spacecraft was originally created to transport crew and cargo to the International Space Station. While used initially just to transport cargo, the spacecraft successfully transported a crew for the first time in 2020.[1] The company has had three versions of the Dragon spaceship named Dragon, Dragon 2, and Dragon XL.

SpaceX’s rockets are reusable, something that’s critical to reducing the cost of space travel. When they come back to earth, the rockets land on what’s known as an autonomous spaceport drone ship. Essentially, these are landing platforms. Once the rocket has landed, it can be returned to land and reused.

One of SpaceX’s most ambitious projects to date is their Starship. It is a fully reusable super-heavy launch system and space vehicle. It is intended to eventually replace its existing launch vehicles. It will be able to access near earth-orbit and earth orbit. There is also hope that it will be sufficient for interplanetary missions and intercontinental passenger transport back on earth.

The Starship will be available for private lunar travel starting in 2023.[2] Elon Musk also hopes that it will be suitable for travel to and the colonization of Mars.[3]

SpaceX’s Starlink project is a departure from the rest of the company’s offerings. It is not a rocket ship. However, it is in space. SpaceX built and launched a series of communications satellites that allow it to offer satellite internet services to people around the world.

This side business was created with the goal of generating revenue that would help fund the company’s spacecraft development work. It is also expected to help the company finance its Mars colony.[4]


Business Model of SpaceX

SpaceX has a multi-faceted business model with a number of different target customers and revenue streams.

First, they sell aerospace products directly to governments. For example, NASA and the Department of Defense are SpaceX customers. To get these contracts, SpaceX competes with other aerospace companies.

Government contracts are often very competitive, and SpaceX’s strategy is to win on price and safety. By creating reusable rockets, SpaceX was able to reduce the price of their rockets and spacecraft to underbid legacy aerospace firms like Boeing.

However, more companies are offering reusable rockets these days, including Blue Origin and RocketLab. SpaceX often wins bids because it has the best technology solution and a long track record of delivering results for NASA and the Pentagon.

SpaceX also provides space travel and cargo services. For example, they have a contract to resupply the International Space Station and to run crewed missions to the station. They get paid for these services and own the space vehicles.

Next, SpaceX has a commercial portion of their business model. They provide launch services for commercial purposes such as launching satellites into orbit on behalf of for-profit companies.

The company also offers space tourism experiences to people who have significant means. They run flights that take tourists to near space orbit or into space.

Finally, the company has leveraged its capacity to launch satellites into space to create a satellite network of its own. The company’s Starlink satellite internet system is a subscription service that helps people access high speed internet in regions where it is currently not available. It’s often used in rural areas or at sea.

The company has explicitly said that Starlink’s goal is to generate revenue that will help fuel the cost intensive work of developing space vehicles and rockets capable of undertaking a Mars mission.[5]

SpaceX’s business model is ultimately focused on bringing down the costs and simplifying space travel and flight. By doing so, SpaceX can underprice their competitors and gain market share in the launch and space vehicle market.

By reducing costs, they can also offer private space tourism. Currently, this is incredibly costly. Until recently, it was limited to just trips to the earth’s orbit. But, in 2022, three businessmen traveled via SpaceX to the International Space Station for an individual cost of $55 million each.[6] SpaceX is also planning lunar space missions and plans to eventually develop a moon base where people can have moon holidays.[7]

Their goal is to eventually reduce costs on space flights to make commercial space travel more accessible. While it will still likely be beyond the reach of anyone but the super-rich, reducing the costs and proving it is safe would open space tourism up to more wealthy travelers.

SpaceX’s website suggests they are planning for future space tourism adventures that might even include commercial travel to Mars. Given the focus on traveling to Mars, it’s unclear what SpaceX’s ultimate business goal is.

CEO Elon Musk has been forthright about the fact that he believes the future of the human race is as an interplanetary species.[8] But is this a personal mission or part of a business strategy? And does it have a hope of being profitable? As a private company, SpaceX isn’t required to answer that question publicly.

SpaceX has faced criticism around its Starlink network. Some have expressed concerns that the large number of satellites SpaceX had to launch to create the network will add to the dangers of space debris.[9] Others have suggested that the satellites interfere with scientific equipment and readings.[10]

Regarding the company’s Mars exploration plans, many have expressed concern about some of the plans that the company’s CEO Elon Musk has shared. These include the ability to potentially go to Mars for free and work off the trip via some kind of work contract.

As any Mars colony would need people to be part of its workforce, the idea of an employer charging employees for travel to their work location has been seen by some as unethical. This has been compared by some to forms of indentured servitude.[11]

SpaceX has significant research and development, staffing, and material expenses. However, the contracts they bid for are extremely large. For example, in 2021, SpaceX won a $2.9 billion NASA contract to build a moon lander.[12]

Still, the fact that the company launched their Starlink service to try to generate more revenue to cover their research and development costs suggests that SpaceX could be struggling to cover its ambitious future plans.

Indeed, SpaceX has almost gone bankrupt more than once. The company nearly went under after failing on its first three launches of its Falcon 1.[13] The company also risked bankruptcy in 2021 when the production of its Raptor engines fell behind schedule.[14]

As they are a private company, it is not clear how profitable SpaceX is.


How Does SpaceX Make Money?

SpaceX makes money in more than four different ways. These include selling rockets and space vehicles, charging for the use of rocket and space vehicles, offering space tourism experiences, and through their Starlink satellite internet service.

As SpaceX is a private company, how much they make via each of these revenue streams is not public.


Selling Rockets and Space Vehicles

SpaceX bids for contracts to provide governments with rockets and space vehicles. Some of these contracts are sales of the company’s existing suite of rockets and space vehicles. However, other contracts are for designing custom vehicles or rockets to fit into NASA space missions.

SpaceX also contracts with the Department of Defense on military projects. These contracts are typically worth a significant amount of money. For example, a 2020 contract with the Pentagon gave SpaceX $149 million to build a missile-tracking satellite.[15] They also received a $2.6 billion NASA contract for the development of crewed launch capabilities.[16]


Charging for the Use of Rockets and Space Vehicles

SpaceX charges for space and launch services using vehicles that they own. They generate the majority of this revenue via commercial satellite launches. However, SpaceX also takes on servicing contracts for various non-commercial entitles like its contract to supply the International Space Station.

In these situations, the company makes money by charging for the costs of the launch or service. For example, SpaceX was paid $3.04 billion for 20 supply missions to the International Space Station.[17]


Space Tourism

SpaceX makes money by selling space tourism experiences. They currently offer the ability to travel to the earth’s orbit and to visit the International Space Station. They have plans for offering trips to the lunar orbit as well.

The company has longer-term plans to build a base on the moon and allow people to stay there on lunar vacations. They also plan in the much longer term to offer commercial trips to Mars.

SpaceX charges a significant amount of money for these opportunities. Its multi-day orbital voyage, where tourists orbit around the Earth for three days, has a price tag of an estimated $55 million. [18]



SpaceX makes money via Starlink, their satellite internet service. The company launched a network of satellites into space and now offers low latency broadband internet to people around the globe. The service is advertised to people who live in rural areas, RV users, and boaters.

SpaceX makes money on the one-time hardware costs of getting a Starlink receiver and monthly fees. Starlink charges just under $600 for hardware and $110 per month for internet service. Launched in 2019, the company is still launching satellites with a goal of expanding its services around the globe.

While not currently profitable, it is expected Starlink will eventually generate significant revenue for SpaceX.[19]


SpaceX Funding, Valuation & Revenue

SpaceX is currently a private company, so little about its finances is public. What is known is that the company has almost faced bankruptcy more than once. This includes in 2021, when the aerospace company was behind on the production of a new rocket, and CEO Elon Musk warned that could lead to bankruptcy.[20]

SpaceX has gone through 29 successful funding rounds and raised a total of $9.9 billion. Well-known SpaceX investors include Mirae Asset Venture Investment and Kinetic Partners.[21] It has also received grants from NASA and the United States Space Force. SpaceX is continuing to actively raise money, including raising a significant amount of capital in just three months in 2022.

DateTotal RaisedFunder
August 5, 2022$250 million1 unnamed funder
June 15, 2022$150 millionMirae Asset Venture Investment
June 14, 2022$1.7 billion3 unnamed funders

While SpaceX’s valuation is not public, Crunchbase suggests that the company was worth over $10 billion as of 2021.[22]


Is SpaceX Profitable?

SpaceX is not profitable. While the company’s financials are not public, the fact that SpaceX is continuing to raise venture capital every year suggests that the company is not currently generating enough revenue to cover its expenses.

That said, SpaceX has landed a significant number of high-value contracts. The company also plans to leverage StarLink to generate more consistent revenue. There is, therefore, reason to believe that SpaceX could be profitable in the future.

However, the high cost of research, development, manufacturing, and operations in this sector makes SpaceX vulnerable to cash flow issues. The fact that the company has already raised over $9.9 billion in venture capital also could make it challenging to raise more money in the future.



SpaceX is one of the most innovative companies in the world, and they’ve used their unique business model to create some truly amazing products and services. They’ve also made a name for themselves as a company that’s passionate about making space travel more accessible to everyone.

The company has come a long way since it was founded in 2002, and they have accomplished many things that were once thought impossible. They are on the verge of sending astronauts to the moon for the first time since 1972, and they have plans to colonize Mars by 2024. They have also saved millions of dollars for their customers by reusing rockets, which is something that no one thought would be possible when SpaceX first started operations.

The business model of SpaceX has several key benefits: it allows SpaceX to reduce its reliance on government contracts; it gives them a stable cash flow even in difficult economic times; and it makes space travel more affordable for the average person.

Finally, as we saw in our analysis, supporting technology innovation is critical to success. By investing in cutting-edge research and development (R&D), SpaceX can help make space exploration more accessible and affordable for everyone who desires to experience the marvels of the universe firsthand!

The plans of SpaceX and Elon Musk would be something interesting to watch in the coming years.

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  1. New York Times
  2. Wikipedia
  3. SpaceX
  4. SpaceNews
  5. SpaceNews
  6. NPR
  7. NY Post
  8. National Geographic
  10. DPReview
  11. Gizmodo
  12. New York Times
  13. CNBC
  14. CNBC
  15. Reuters
  16. Tech Crunch
  17. Tech Crunch
  18. Observer
  19. Barrons
  20. CNBC
  21. Crunchbase
  22. Crunchbase

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