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Will Elon Musk's SpaceX Knock Boeing and Lockheed Out of Space? - The Motley Fool

By Rich Smith

SpaceX has won lucrative contracts from NASA to keep the International Space Station well-supplied with Tang and toilet paper. Soon, it could be launching rockets for the U.S. Air Force as well. Photo: Wikimedia Commons

In an interview with Auto Express magazine this week, Musk announced that Tesla is definitely going to have its latest electric car model, the Model 3, out for sale by 2017, and at a $35,000 price tag that should make it a viable competitor to BMW's 3-series among entry-level luxury-car buyers. But the even bigger news for Musk is this: SpaceX may very soon be going to work for the United States Air Force.

They like you, Elon! They really like you!
In a brief, to-the-point announcement on its website last week, SpaceX confirmed that the U.S. Air Force has just "certified" that SpaceX's Falcon 9 rocket has completed three successful flights. (SpaceX has actually completed quite a few more than just "three" missions -- but not all of them bore the U.S. Air Force seal of approval). With this trophy finally in hand, SpaceX should soon be eligible to receive USAF contracts awarded under the Evolved Expendable Launch Vehicle (EELV) Program.

A few other I's remain to be dotted, and T's crossed, before the certification process is completed. But SpaceX says it's now likely to complete certification before the end of this year.

The SpaceX Falcon 9 rocket: Ready for liftoff. Photo: SpaceX

What it means to taxpayers
Launching U.S. government satellites is big business -- and it costs U.S. taxpayers big bucks. In testimony before Congress earlier this year, Musk pointed out that right now, the Air Force is paying the United Launch Alliance joint venture between Boeing (NYSE: BA  ) andLockheed Martin (NYSE: LMT  ) a $1 billion-a-year retainer just to stand ready to loft satellites into space for it.

That's $1 billion -- whether ULA actually launches any satellites or not. And if it does happen to launch a satellite, ULA gets another $380 million per launch.

SpaceX thinks it can do the same work for as little as $100 million per launch -- a 74% discount to ULA's price....more

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