Read More
Felix Wintle
Fund Manager
The launch of the Starship rocket on 13 October was a defining moment for Elon Musk and his team at Space X. This fifth launch of the Starship rocket was not just another jolly into space for the enigmatic billionaire, this mission was important because it demonstrated that the booster could be reusable and this in turn showed how the cost of space flight could come down significantly over time. And it’s the cost of space flight that has been the impediment to broad adoption so far.
So how did he do this? First of all, if you haven’t seen the video of the landing, I would urge you to do so. It can be found on YouTube or the SpaceX website. The landing is unique because the rocket lands perfectly adjacent to the tall landing mechanism, which has arms that guide it home. These mechanical arms have become known as ‘chopsticks’, because it is as if the rocket gets caught in mid-air and rehoused.
This landing design is important because it allows a quick turnaround. A refuel and reload can be achieved in about an hour. The reusable booster plus the quick turnaround helps bring the cost down dramatically. As any airline will tell you, the more flights that can be made, the more costs can be leveraged.
One of the things that makes this landing so impressive is its pinpoint accuracy given the size of the rocket. Starship is 121m long, the size of a 23-storey building, and 9m in diameter, with a payload of up to 150 tonnes of material.
The idea behind it all is to be able to take enough material to Mars; so that mankind can colonise Mars. This will not be possible until we can take what we need affordably and relatively easily and this is Musk’s mission. However ‘out there’ it may seem, this recent successful launch and landing is a big step on the way to that goal. The economics are now beginning to look achievable as can be seen in the chart below.
The key metric in the space business is cost per kilogram. The goal is to transport as much material as you can as cheaply as possible. And Space X has already been successful in this endeavour. As the purple line shows, as recently as the 2010s the launch costs were about $10,000 per kg, and this has now been reduced to $1,000 per kg, a 10x reduction in about a decade. Musk is targeting $10 per kg, another step change in the cost paradigm and one of the reasons SpaceX dominates this industry. At this cost, it has been estimated, that you could send half a million tonnes of material and people to space over time, which would be enough to start a colony on Mars.
Whilst colonising Mars may still be a few years away, it’s incredible to think that this is honing into view as a possibility. America and its entrepreneurs continue to show the way in terms of innovation and with this new rocket design and a focus on cost, Space X has brought space travel forward by leaps and bounds.
It’s this relentless innovation which sets US companies apart from their competitors and capitalising on innovation is a core theme of the VT Tyndall North American Fund.
WARNING: All information about the VT Tyndall North American Fund(‘The Fund’) is available in The Fund’s prospectus and Key Investor Information Document which are available free of charge (in English) from Valu-Trac Investment Management Limited (www.valu-trac.com). Any investment in the fund should be made on the basis of the terms governing the fund and not