Starship’s path to reusability looks murky after SpaceX’s S-1
Source: TechCrunch
The Big Picture
- Starlink is currently the only major revenue driver for SpaceX.
- In 2023 the satellite‑communications arm generated $11.4 B in revenue – the bulk of the company’s earnings.
- However, the business sits on a capital‑expenditure treadmill: roughly 20 % of the constellation must be replaced each year just to keep service levels stable.
Where the Money Goes
| Category | Spend (2023‑present) |
|---|---|
| Starlink satellite build‑and‑replace | $11.4 B |
| Starship development & launch infrastructure | $8.4 B |
SpaceX’s S‑1 filing with the SEC projects continued cost growth, but assumes technology improvements will lower cost as a share of revenue.
Musk’s Promise vs. the Numbers
- Musk’s claim: Full‑reusability of Starship is essential to keep Starlink’s launch costs low enough to avoid bankruptcy.
- New S‑1 note: Full reusability is not required to launch the next‑gen Starlink satellites.
- Implication: Without full reusability, launch costs could stay near Falcon 9 levels, eroding the expected economics.
Tim Farrar (satellite‑market analyst) – “If this reusability is not achieved then the cost of launch on Starship may not be much lower than Falcon 9… The cost per launch may be as much as $100 M (i.e. $1 000 per kg) while tempo remains constrained by the rate at which second stages can be manufactured and first stages can be refurbished.”
The Latest Starship Test Flight
- Third‑generation Starship performed its maiden flight.
- Key failure: Inability to re‑light Raptor engines on both the booster and the Starship, a critical step for a controlled, reusable return.
- Successes:
- Deployed dummy satellites.
- Launched two test vehicles into orbit.
What This Means for Starlink’s Future
- Higher‑throughput satellites – SpaceX plans to launch 60 new Starlink satellites per Starship (≈20× the capacity of a Falcon 9 launch).
- Potential expendable first flights – If the initial Starship missions are expended, the anticipated “free satellite cash” from reusability disappears.
- Impact on ancillary projects – Plans such as space‑based data centers become financially untenable until Starship achieves true reusability.
Bottom Line
- An expendable Starship could keep SpaceX afloat, but it won’t deliver the cost reductions or the frontier business models (e.g., space data centers) that Musk envisions.
- The next few launch cycles will be decisive: either Starship proves reusable and unlocks the economics needed for Starlink’s long‑term growth, or SpaceX must continue to fund its satellite constellation with ever‑higher launch expenses.
Starlink Growth Slows
SpaceX’s S‑1 shows that Starlink’s growth is slowing.
- Starlink has just over 10 million subscribers, more than any other satellite communications network.
- Farrar notes the rate of user growth fell over the course of the first quarter of 2026.
- Quilty Space, a space‑consulting firm, projected earlier this year that SpaceX would end the year with 16.8 million subscribers. That would require the company’s quarterly growth rate to roughly double from where it is now, which may be difficult after recent price increases.
Growth matters for SpaceX because its new Starlink users are paying less than previous ones. Starlink’s average revenue per user has fallen from $99 in 2023 to $66 in Q1 2026—a change propelled by its expansion into new international markets where it can’t charge as much as it does in developed economies. Without a fast‑growing user base, each new satellite launched is making less money.
Increased competition also threatens Starlink. Amazon’s Leo network is approaching the scale required to put pressure on SpaceX, although it is waiting for the Federal Communications Commission to extend a deadline that requires it to launch 1,600 internet satellites by July.
Data in the SpaceX filing presents a gloomy growth forecast for the company as well as rivals like Blue Origin. Farrar says that if SpaceX—much further ahead than any other company—is seeing slowing demand, that may signal the market for space broadband is smaller than the players anticipated.
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Tim Fernholz is a journalist who writes about technology, finance, and public policy. He has closely covered the rise of the private‑space industry and is the author of Rocket Billionaires: Elon Musk, Jeff Bezos and the New Space Race. Formerly, he was a senior reporter at Quartz, the global business news site, for more than a decade, and began his career as a political reporter in Washington, D.C.
You can contact or verify outreach from Tim by emailing tim.fernholz@techcrunch.com or via an encrypted message to tim_fernholz.21 on Signal.