John Strickland explains how SpaceX can drive launch costs to less than one tenth that of competing rocket systems:
“When people see this cost comparison, they ask all over again ‘How can he (Musk) do that?’ How can the Falcon outperform the Delta by such a wide margin? The three main reasons seem to be (1) low manufacturing cost (2) low operational cost (time efficient operations design and low man-hours needed per launch) and (3) high efficiency performance in flight. The first two have already been demonstrated by the Falcon 9, and they continue to be improved, such as a recently announced two-thirds reduction of fuel loading time. The SpaceX paradigm is one of continuous improvement.
The first reason (low manufacturing cost) is exercised again in the “Heavy” by using three nearly identical rocket stages (instead of two solids and a core stage), which means more production of the same units, thus reducing their unit cost. The SpaceX plant in Hawthorne, California, is building towards the capability of producing a Falcon 9 first stage or Falcon Heavy side booster every week and an upper stage every two weeks. Within five years, SpaceX expects to be producing more large rocket engines per year (several hundred) than all other rocket companies on the planet combined. Engine production costs will thus decline still more. (Dragon production, depending on demand, is planned for a rate of one every six to eight weeks.)
The third reason (high efficiency in flight) is partly achieved by the standard methods of making the engines fuel efficient, with high thrust and low mass, and making the overall structural mass of each stage as low as possible. Musk has apparently done this better than anyone else. For example, the two side boosters have a fully fueled to empty mass ratio of 30. Additional flight efficiency is achieved by propellant cross-feeding (see below).”
Elon Musk talks more about the SpaceX cost advantage here. SpaceX is breaking from industry norms by being up front about their launch prices and publishing them on the web. Click here and scroll down to see the price for a Falcon Heavy launch ($83 million) and that the payload it will be able to carry to LEO is 117,000 pounds. That works out to $709 per pound, less than the $1000 per pound BTE goal for the Heavy Lifter to be used for launching the Enterprise components into space. And the ‘Falcon Super Heavy’ which is not yet shown on the SpaceX site should have an even lower launch price per pound. SpaceX is certainly blazing a whole new trail.