How can the cost of rocket launches be recalculated using first principles?

Okay, let's talk about this topic.

Imagine you want to cook a luxurious seafood feast at home, instead of dining at a five-star hotel.

A dish on the hotel menu might cost 2000 yuan. But you wouldn't just accept that price; you'd think: "What exactly is this meal made of?" This is first principles thinking – breaking things down into their most fundamental, core components.

You'd realize that this meal = one Boston lobster + half a dozen scallops + a few groupers + seasonings like ginger, garlic, butter, etc. + your own labor. Then you'd go to the seafood market and supermarket to check the prices of these raw ingredients.

• Lobster: 300 yuan
• Scallops: 50 yuan
• Fish: 80 yuan
• Seasonings: 20 yuan
• Total: 450 yuan

You suddenly discover that the raw material cost is only 450 yuan! So where did the hotel's extra 1550 yuan go? Oh, that's for the chef's salary, restaurant rent, decor, brand premium, waitstaff expenses, and profit...

Now, let's apply this logic to rockets.

Before Elon Musk, the quoted price for launching a rocket could be hundreds of millions of dollars. Everyone had grown accustomed to this price, believing space travel was simply that expensive. But Musk used first principles to recalculate the costs:

Step One: Deconstruct the Rocket's 'Raw Materials'

What exactly is a rocket made of?

1. Structural Materials for the Rocket Body: Primarily industrial materials like aluminum alloys, titanium alloys, and carbon fiber. These materials have publicly available metal prices on the international market. Musk's team investigated and found that the cost of purchasing all the metal raw materials needed to build a rocket accounted for only about 2% of the total launch quotation. This was a startling discovery! Just like you finding out the raw ingredients for a seafood feast only cost 450 yuan.

2. Fuel: Rocket fuel sounds sophisticated, but what is it actually? Take SpaceX's 'Falcon 9' for example; it uses kerosene (a refined aviation kerosene) and liquid oxygen. Both are mass-produced chemical products, and their prices are not exorbitant. Calculated, the fuel cost for a single launch is roughly a few hundred thousand US dollars. For a business worth tens or even hundreds of millions of US dollars, the fuel cost is almost negligible.

Step Two: Analyze 'Processing Fees' and 'Other Costs'

Since raw materials and fuel are so cheap, why are rockets so expensive? The bulk of the cost lies here:

1. Manufacturing and Assembly: Transforming a pile of aluminum alloy into a precise engine capable of withstanding high temperatures and pressures requires top engineers, complex machinery, rigorous testing, and a large number of skilled technicians. This portion of 'labor costs' and 'equipment depreciation' is extremely expensive.

2. Single-Use (This is the most crucial point!): This was the biggest cost black hole in the aerospace industry previously. Imagine buying a Boeing 747, flying it from Beijing to New York, landing, and then directly scrapping the plane by pushing it into the Atlantic Ocean. The next time you want to fly, you'd have to build a new one. Absurd, right? But that's exactly how space travel operated for decades. Every rocket was a single-use consumable. This led to the expensive 'manufacturing and assembly' costs mentioned above, which had to be paid anew for each launch.

Step Three: Based on the Analysis, Identify the Core for Cost Reduction

Through the breakdown above, the conclusion becomes very clear:

• Reduce material costs? Not much room, as they aren't expensive to begin with.
• Reduce fuel costs? Even less meaningful, as they constitute a tiny proportion.
• Reduce 'manufacturing and assembly' costs? There are two paths:
  • Build in-house, reduce middlemen: Many traditional aerospace companies would subcontract engines, navigation systems, and other components to different suppliers, each of whom would add their profit, leading to layered price increases. SpaceX produces as much as possible in-house (this is called 'vertical integration'), saving all these profits.
  • Reuse, amortize costs: This is the most revolutionary step. Since the cost of manufacturing a rocket is astronomical, if it can fly back, be refurbished, and reused, wouldn't the cost come down? Just like airlines don't discard a plane after one flight. If it can be reused 10 times, the manufacturing cost is amortized to one-tenth of its original value.

Therefore, through recalculation using first principles, the conclusion is: Achieving rocket recovery and reuse is the only true path to reducing launch costs.

To summarize, this process is like:

1. Ask: What exactly is a rocket made of?
2. Calculate: Add up the market prices of its basic materials and fuel.
3. Compare: Discover that material costs are extremely low, while the manufacturing cost of 'throwing it away after one use' is astronomical.
4. Solve: Therefore, the core of solving the problem is 'don't throw it away'; find a way to make it fly back.

This is why SpaceX goes to such lengths to land its rockets. They aren't doing it for showmanship, but rather as the most rational business decision derived from fundamental cost accounting.