Elon Musk confirms he’s worried SpaceX could go bankrupt

Elon Musk said Tuesday via Twitter that his spacecraft company, SpaceX, needs to produce a lot more of its next-generation Starship engines, and soon, to keep growing its Starlink broadband constellation and stay in business. 

“If a severe global recession were to dry up capital availability / liquidity while SpaceX was losing billions on Starlink (and) Starship, then bankruptcy, while still unlikely, is not impossible,” he tweeted.

The statement came in response to a leaked email that Musk reportedly sent to employees over the long Thanksgiving holiday in the US asking for “all hands on deck.” 

The email alluded to a “production crisis” within the company centered on the Raptor engines that power Starship. SpaceX is planning to fly a Starship prototype to space for the first time in 2022, and the vehicle is the centerpiece of the company’s future plans to send humans to the moon and Mars.

But more important for the SpaceX business model is that Starship is key to continuing to launch version two Starlink satellites, which will provide a vital revenue stream for the company in the future. 

“The consequences for SpaceX if we can not get enough reliable Raptors made is that we then can’t fly Starship, which means we then can’t fly Starlink Satellite V2. Satellite V1, by itself, is financially weak, while V2 is strong,” reads the email, which was first obtained by SpaceExplored. 

SpaceX and Musk didn’t directly confirm the veracity of the leaked email to CNET, but when asked by a Twitter user on Tuesday morning “(how is) the Raptor thing going?” Musk responded briefly “It’s getting fixed.”

In the email, Musk concludes by warning that SpaceX could face “genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year.”

Musk seems to be upping the ante here. Less than two weeks ago, he said during a livestream he was hoping for “up to a dozen” test flights of Starship in 2022 before launching “real payloads” in 2023. 

Now playing:
Watch this:

SpaceX Starship is preparing for its first orbital flight

6:30

If the company does end up on the brink of bankruptcy, it wouldn’t be the first time. Musk famously stared down financial ruin before SpaceX managed its first successful launch of a Falcon 1 rocket.

Raptor production isn’t even Starship’s most immediate hurdle. The vehicle’s first orbital test flight is still awaiting the conclusion of an environmental review and the official green light from the FAA, which isn’t expected before the end of the year.