Over the Thanksgiving weekend, Elon Musk sent a letter to SpaceX employees warning them that there is a risk that the company could go bankrupt next year.
SpaceX, the reasons for the risk of bankruptcy
The problem is the slowdown in the production of the Raptor engines for the Starship rocket. In fact, Musk wrote that the production crisis is much worse than it seemed even just a few weeks ago.
In light of this deterioration, Musk explicitly warns in the letter that the company could face a real risk of bankruptcy if they fail to carry out at least one test flight of the spacecraft once every fortnight in the coming year.
Starship is the spacecraft that is supposed to take goods and people to Mars in the future. It is a unique and unprecedented spacecraft that has never been built before, and there are doubts about its effectiveness.
SpaceX is currently testing some prototypes in Texas with a few short test flights, but in order to proceed further, real short space journeys will have to be made with a prototype very similar to the final version.
The slowdown in engine production seems to be putting this roadmap in crisis, so much so that according to Musk there is a real, though not imminent, risk of failure of the entire project.
The delay of the first flight
It is worth adding that Musk later tried to play down this risk on Twitter, claiming that it is in fact an unlikely risk, and that his paranoia is necessary to ensure the survival of the project.
If a severe global recession were to dry up capital availability / liquidity while SpaceX was losing billions on Starlink & Starship, then bankruptcy, while still unlikely, is not impossible.
GM & Chrysler went BK last recession.
“Only the paranoid survive.” – Grove
— Elon Musk (@elonmusk) November 30, 2021
In his letter, Musk had described the current production process of the Raptor engine as “a disaster”, which he considered being the most difficult thing in the creation of the giant rocket.
The goal would be to make the first Starship orbital flight in January or February 2022, but at this point, there is a risk that this deadline will not be met.
Nevertheless, SpaceX‘s CEO is confident that the flight will take place by the end of 2022.
SpaceX is not currently listed on the stock exchange, while Musk’s other listed company, Tesla, has not been affected by this news.