DARIAN WOODS, HOST:

This is THE INDICATOR FROM PLANET MONEY. I'm Darian Woods, and I'm joined by NPR science correspondent Geoff Brumfiel. Welcome to the show.

GEOFF BRUMFIEL, BYLINE: Hi, Darian.

WOODS: So good to have you. You're here to talk about Elon Musk's giant rocket.

BRUMFIEL: That's right. As I'm sure you saw, this spring, Elon's company, SpaceX, launched the biggest rocket the world has ever seen.

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UNIDENTIFIED PEOPLE: Five, four, three, two, one.

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BRUMFIEL: It's called Starship. It's enormous - taller than the Statue of Liberty. And from the moment those engines fired, it was excitement. It was so powerful - it blasted a giant hole in the bottom of its concrete launch pad.

WOODS: Wow.

BRUMFIEL: It sort of lumbered into the air and then started spinning out of control. They had to punch the old self-destruct button there, and the whole thing blew up over the Gulf of Mexico.

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UNIDENTIFIED PEOPLE: Aw.

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WOODS: All right. So mixed results, but people were kind of celebrating a bit as well.

BRUMFIEL: Yeah. Yeah, I mean, SpaceX treated this thing like a big success. And it was actually. Even though this giant, super expensive rocket exploded, you know, just getting something like this off the pad, getting it this far into its flight on the first try is really impressive. But they still have a long way to go.

WOODS: So today on the show, the business of going to the moon, the literal moon, and then onto Mars. We will look at Elon's giant rocket, and we'll ask whether his numbers stack up.

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WOODS: SpaceX was founded in 2002, and its main thing is launching stuff into space - like weather and communications satellites.

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UNIDENTIFIED PERSON #1: Falcon 9 is in startup. LD is go for launch.

BRUMFIEL: Yeah, it's got these rockets where the bottom part of the rocket can land vertically...

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UNIDENTIFIED PERSON #2: Stage one landing leg, deploy.

BRUMFIEL: ...And be reused really easily.

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UNIDENTIFIED PERSON #2: Stage one landing is confirmed.

BRUMFIEL: And that's made its launch costs far cheaper than most other space companies. I spoke to this analyst named Chris Quilty. He's the president of a company called Quilty Space. He says SpaceX is getting a lot of business.

CHRIS QUILTY: SpaceX, when it comes to the launch industry, is sitting high on the hog. Like, they are in such a good position competitively.

WOODS: So I understand that SpaceX has big contracts to launch supplies to the International Space Station and even astronauts, too. And so you'd think with these big deals that SpaceX would be making a lot of money.

BRUMFIEL: You'd think so. I mean, it really is dominating a lot of different parts of the business of launching things into space. But here's the thing, Darian, the space launch business isn't all that big.

WOODS: Right. I mean, I read that the entire global revenue from satellite launches is only about $6 billion.

BRUMFIEL: And that's revenue. That's not even profit. That's the pie that all the big space companies split up. SpaceX is a private company, so we don't really know the financials, but from what Quilty can tell, it probably isn't making money. Starship just this year alone is costing 2 billion, according to Elon.

WOODS: So it sounds like a ton of money going into research and development and expenses to pay for this new rocket.

BRUMFIEL: Yeah. And I mean, we should maybe take a minute to explain why it's so expensive. So Starship is a radically different design from the rockets SpaceX currently uses. Those ones are as lightweight as possible because every pound you need to launch into space costs money. But Starship isn't like that. It's made of stainless steel. Steel is cheap. It's strong. It can withstand reentry into the atmosphere better than things like aluminum, but it's heavy. And that brings us to the second feature of Starship. It is enormous. It has these huge engines called Raptors, and the first stage uses 33 of them. Now, why do all this? The point is reusability. The steel, the big engines - all of this is designed to make Starship cheap and tough and capable of flying again and again, kind of like an airplane flies over and over and over.

WOODS: And so this is all kind of in service of traveling to Mars? Like, Elon Musk wants to get civilization to build a city on Mars, right?

BRUMFIEL: Yeah, exactly.

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ELON MUSK: I mean, to be frank, civilization is feeling a little fragile these days.

BRUMFIEL: Elon estimates that it's going to take around a million tons of supplies to get the city started. And SpaceX's current rockets can't move a million tons to Mars, but Starship can.

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MUSK: Starship is capable of doing that. It's capable of getting a million tons to the surface of Mars and creating a self-sustaining city.

WOODS: OK, so it's good to have a dream.

BRUMFIEL: Interplanetary life goals.

WOODS: Yeah. And Elon has built this company, SpaceX. It is winning loads of contracts.

BRUMFIEL: Right. I mean, it would actually almost certainly be making money if it weren't for the fact that it was trying to build this giant rocket to Mars.

WOODS: OK, so is there any economic case for Starship, that big rocket?

BRUMFIEL: Yeah. I mean, Elon thinks so. So leaving the dreams of Mars settlement aside, he thinks a big, tough rocket like this could make it very cheap to launch other stuff into space, and that could allow humans to start all kinds of businesses that feel like they're completely impossible right now - you know, maybe recreational space stations or space factories that might make things in zero-G or even, like, going off and mining asteroids. And, you know, if all that stuff happens, all that commerce would be getting rides on Starship, which would make SpaceX a lot of money. So it's a big vision from a business perspective, too. But I should say it also comes across as quite a gamble. I mean, I spoke to another analyst, Carissa Christensen. She's CEO of a company called BryceTech. She says the problem is right now, no one in the satellite business really needs a Starship.

CARISSA CHRISTENSEN: Payloads today are designed for vehicles that are available today, and Starship is much bigger. So there's not an immediate, obvious commercial fit for Starship in terms of commercial launches.

WOODS: So it sounds like she's saying, we don't know if anyone will actually buy flights on Starship.

BRUMFIEL: Exactly. Now, there is one other sort of economic case for Starship. SpaceX is also building a satellite internet service called Starlink. And Starlink needs thousands of satellites in orbit to work. Now, because Starship is so huge, it could allow them to radically expand the Starlink network, and that could generate a lot of cash. But that's all in the future. For now, Chris Quilty says SpaceX is going to struggle to be profitable.

QUILTY: Until Starship is flying and the development costs are down, and it's generating revenue instead of consuming cash, and until, you know, they start getting new Starlink satellites on orbit, I think it's - it'll be a challenge for them.

WOODS: OK, so it sounds like the profits for SpaceX really depend on whether they can kind of get over this research-and-development hump for Starship. Do we know whether they have the cash to be able to pull this off?

BRUMFIEL: The short answer is no, and that's because we really don't know how many tries it'll take to get Starship to fly. The company does have some extra help. NASA has awarded it around $4 billion in contracts so that SpaceX can develop starship into a lunar landing vehicle.

WOODS: A literal moonshot?

BRUMFIEL: Yeah, a literal moonshot. And Chris Quilty told me, you know, that that is the sort of thing that investors seem to love about Elon, these big visions. And they're willing to pay up for it.

QUILTY: The sense I get from when I talk to investors is there is still a belief that, you know, SpaceX is going to change the world.

BRUMFIEL: And that may be the company's sort of final ace up the sleeve - is just this faith that SpaceX really can change the world. In a recent sort of round of fundraising, the valuation that was sort of bandied about for SpaceX was close to $140 billion. Now, do you remember the total revenue from launch is only around $6 billion annually.

WOODS: Wow.

BRUMFIEL: I mean, it really shows that investors are ready to believe that Starship will work and that it'll pay off. I mean, I guess the question is - how many rockets are they willing to see blow up?