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SpaceX Is Moving Fast. It Needs to Be Careful Not to Break Things

By Lou Whiteman - Feb 11, 2021 at 8:00AM

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There are advantages, and risks, to being the first mover into space.

There's a new space race, and Elon Musk's SpaceX seems to be out in front of the pack. The company is moving at Musk's typical frantic pace, which carries with it some advantages and some risks.

In this video from Motley Fool Liverecorded on Feb. 4, Industry Focus host Nick Sciple and Motley Fool contributor Lou Whiteman discuss some of the recent news stories surrounding SpaceX and highlight what is going right, and what could go wrong, for the space start-up.

Nick Sciple: First off, we've got SpaceX in the news this week for lots of reasons, some of them good, some of them bad. I want to go with the good news first. SpaceX says they're going to send their first all-civilian crew to orbit this year.

Lou Whiteman: The funny thing about this is how quickly this suddenly looks routine. I mean, it was less than a year ago, it was May 2020, that we were celebrating the Crew Dragon doing its first launch to the space station. It almost feels routine. There is going to be one of those Dragon capsules parked at the space station almost indefinitely from now on. It's a next step from there, but it's really amazing to see how much this story has shifted in a very short amount of time from concept to actual, no, we're doing this, it's on.

Sciple: Lou, hot-seat, Virgin Galactic (SPCE 0.91%), what do you think?

Whiteman: The real question is, how much demand is there at these price points? I would much rather be SpaceX with a diversified business right now than Virgin Galactic. They're planning other things, but right now, they are so reliant on this. I certainly think that they'd be watching this carefully and would be nervous about it. Sure.

Sciple: It is interesting, we go from nobody has ever done this before to now, there's competition, as you said. We'll see what happens. I mentioned there was some good news and bad news. On the bad news side, on Feb. 2, we had another test failure for SpaceX. What's going on there?

Whiteman: Right. It's important to note that this is a separate program than the one that is putting people in the space. This is the Starship. This is Elon Musk's grand dream. This is what's going to take us to Mars. It's a very big, complicated new spaceship, they are testing it right now. Just this week, they did a test. It hit its target, it went about 10 kilometers in space which is maybe one-tenth of what you need to get into space, but they had a fireball crash upon landing. It's very similar to December, [laughs] the last version of this also crashed in December. Very similar, it went up. They claim they get a lot of data from this. The issue is still on the landing. This was Musk's thing to reuse these things and to figure out how. That's where they're having trouble. There are a lot of positives, but it also points to the fact that this is early stages for that.

Sciple: Right. I think I asked you about it last time when we talked about the previous incident, we talked about how these flights are becoming more routine. These types of accidents, are these something we should just expect in the rocket business?

Whiteman: Definitely at this level, because again, this is a craft that is far from bringing people or even payloads into space. This is a crash of beta software. If you think about it [laughs] to use that analogy. If this was the Falcon 9 or some of their more just in-use, then it would be more of a worry. This is bleeding-edge and bleeding-edge sometimes fails spectacularly.

Sciple: Move fast and break things, I guess. [laughs] It's still in the testing stage. We're in the testing stage.

Whiteman: They need to take a deep breath.

Sciple: We want to do that in the testing stage.

Whiteman: Right.

Sciple: One other thing is a couple of potential issues from a federal perspective, both from a hiring and a permitting point of view. Thoughts on that, SpaceX is a government contractor so that is a significant business for them.

Whiteman: Both of these are just interesting side notes, but maybe it's something more if you put them all together. The DOJ is investigating a complaint claiming SpaceX discriminated against a non-U.S. citizen for hiring. It's not real clear what happened. As you say, this is a contractor, it could even be something caught up in that in a bigger issue than we know, but that's one investigation. There's also this flight that crashed this week was delayed because the FAA temporarily suspended their license for "violating the terms of their public safety agreement." SpaceX didn't comment but Musk went on Twitter and complained the FAA is fundamentally broken and will prevent humanity from going to Mars, all this stuff. Again, whatever it was, it was worked out, they were allowed a few days later to do the test. If there is a takeaway here, we've seen this with Tesla, too, Musk has a very cavalier attitude toward regulators, the SEC, whoever it is. That's great when it works but just be careful because we are talking about whether it's autopilot, people on the roads, or eventually, some of these. The FAA sounds like it was concerned that people living in the vicinity could have been affected by the test. There is a need with these things to show some caution and cavalier will allow you to do great things, it can also get you in a lot of trouble.

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