SpaceX’s Expensive Starship Explosions Are Starting to Add Up

A plume of exhaust after the SpaceX Starship rocket launched from Starbase, Texas.

(Bloomberg) — When one of SpaceX’s Starship vehicles burst into flames during a routine fueling test in June, the Elon Musk-led company decided it was time to bring in reinforcements.

Most Read from Bloomberg

Shortly after the incident, roughly 20% of the engineering group working on the company’s flagship Falcon 9 program were reassigned for six months to Starship, a reusable rocket Musk hopes will someday carry humans back to the moon and to Mars, according to people familiar with the company’s planning.

SpaceX and Musk have a history of tackling engineering problems by throwing additional staff at them: Last year, Boring Co. staff were flown to Las Vegas to get its Prufock machine back online following water damage, according to people familiar with the matter. In 2018, employees of Tesla Inc., Musk’s car company, were flown in from across the country to California to help ramp up production of the Model 3.

SpaceX Starship rocket explodes during test in Texas on June 19.

The added muscle for Starship is intended to help improve the craft’s reliability and individual component testing, as well as the rate at which the company can produce more of the rockets, one of the people said. SpaceX revealed in August that a pressurized bottle holding gaseous nitrogen had been damaged, causing it to fail and lead to an explosion during fueling.

The test-stand incident was the latest in a series of recent setbacks for Starship. In three test launches this year from the company’s south Texas facility, two exploded prematurely, and a third failed to deploy its test satellites and spun out of control as it returned to Earth.

Those failures have led to increasing questions about whether Starship will be able to fulfill Musk’s aims. A New York Magazine story asked: “Is Elon Musk’s Starship Doomed?”

SpaceX’s impressive track record, including the construction of the Starlink satellite-internet network and its innovation on reusable rocket technology, has had a deep impact on the space industry and US space policy. It has also made SpaceX among the most highly valued private companies in the world.

Since its inception, SpaceX has made highly visible test flights that sometimes fail in spectacular ways something of a calling card, with cinematic broadcasts on X, Musk’s social-media platform.

Its process is designed to learn from failures fast. Yet Starship’s recent struggles are revealing how rapidly updating rockets that cost hundreds of millions to make can lead to a cascade of expensive issues.

“When you’re changing lots of things in the design at once, all of those ripple effects start adding up,” said Todd Harrison, a senior fellow at the American Enterprise Institute who focuses on space policy. “And it becomes more and more likely that you’re not going to catch things and you will have a catastrophic failure during a test flight.”

Musk has made bold predictions about Starship. In his telling, it will not only be the first fully reusable orbital rocket, but orders of magnitude cheaper than any rival. Starship would also help meet his loftiest goal: bringing humans to Mars.

So far, however, Musk’s early projections that it would be safe to carry humans to space by 2023 and land people on the moon as early as this year haven’t panned out.

“It’s really one of the hardest engineering challenges that exists,” Musk said at an event for Tesla owners in July. “When we first started talking about Starship, people thought this was impossible. In fact, even within the company, we sort of thought it was impossible.”

Elon Musk continues to have high hopes for SpaceX’s Starship pursuits. Photographer: Saul Martinez/Getty Images

The misfires haven’t deterred investors. The 23-year-old company has continued to raise new capital at rates more befitting a keenly watched startup than a mature, capital-hungry business. Most recently, SpaceX has been planning a sale of stock that would value the company at about $400 billion.

Yet there are also signs that for SpaceX to achieve a substantially greater valuation, investors may need to see more progress on Starship. During its latest fundraising effort, in which new investors don’t participate, the company had discussed a $500 billion valuation, before lowering it after consultation with backers, people familiar with the matter said.

Much will hinge on what happens next. The company is aiming to launch its tenth test flight of Starship as early as Aug. 24.  It’s possible that SpaceX will be able to continue to absorb more testing failures, but the perception that the company is moving forward in Starship development will be key to their long-term investment success and fulfilling contractual agreements with NASA.

Starship Scramble

Starship is one large piece of a growing web of programs that make up the SpaceX business plan. The company began with its Falcon rocket program and added the Dragon capsule to deliver cargo and people to space. Now, the majority of its revenue comes from Starlink, which relies on a massive system of satellites in low-Earth orbit that beam broadband internet to Earth.

To make Starship work, SpaceX is betting that it can draw resources away from its core rocket program at a time when the company faces weak competition. Some planned launches of SpaceX’s Starlink satellites on Falcon 9 rockets would potentially be pushed from the end of this year to early 2026 because of the surge of Falcon engineers working on Starship, the people familiar with the company’s planning said.

SpaceX currently has about 8,000 Starlink satellites aloft, and removing a few launches from the manifest this year wasn’t seen as a show-stopping problem, the people said.

Maintaining Starlink’s robust financial health is important for SpaceX to absorb Starship’s costs. Building one of the rockets — comprised of the Starship spacecraft and Super Heavy booster — costs hundreds of millions of dollars, the people said.

When one flight fails, the full cost of the lost vehicle falls on SpaceX, they added. The company is on the hook for other costs, too, including any environmental damage caused when failed rockets tumble back to Earth.

Getting Starship right is critical to SpaceX’s future. Eventually, Starship would be used to launch larger, more powerful Starlink satellites into space. Over time, the company plans to phase out the Falcon 9, making Starship its workhorse rocket, company executives have said. And above all, Starship is meant to be the primary vehicle to start a base on Mars — the reason that Musk has said he created SpaceX in the first place.

A SpaceX representative didn’t respond to a request for comment.

Employees survey SpaceX Starship ahead of its launch at Boca Chica beach in March, 2025. Photographer: Brandon Bell/Getty Images

Moon Landing

SpaceX maintains that Starship will be landing people on the moon within the next few years. NASA has awarded SpaceX contracts worth roughly $4 billion to use Starship to shuttle astronauts to the lunar surface.

To live up to that bargain, SpaceX will need to demonstrate the ability to refuel Starship more than a dozen times in orbit with back-to-back flights. That maneuver has never been performed anywhere near the scale SpaceX needs — and Starship has not yet completed a full orbit of the Earth.

The pressure to move quickly has affected decisions about the design of the rocket, according to a person familiar with the process who wasn’t authorized to speak publicly about SpaceX’s decision-making. For recent tests, SpaceX has used a Starship prototype known as Version 2, or V2. A few of the design decisions for this version have been made in an attempt to save time and money, the person said.

It’s a type of risk that SpaceX and Musk like to take, but the consequences of these choices can have cascading explosive effects, which in turn have an impact on public perception.

“I don’t think anything that’s happened with Starship invalidates SpaceX’s approach,” Carissa Christensen, founder and CEO of BryceTech, a space analytics and consulting firm, said. “That said, the persistent failures over multiple tests are happening in a context of One: high visibility. Two: a company that typically moves very fast and very successfully on innovation and Three: in a world where programmatic objectives depend on this vehicle,” notably NASA’s moon mission.

The frenetic pace of Starship’s development may also be a contributing factor to its missteps, with quickly implemented changes sometimes having unforeseen effects on other parts of the vehicle. For instance, a seal on the vehicle’s Raptor engines began to fail after SpaceX started adding more propellant on later flights, according to a person briefed on the matter who was not authorized to discuss the program’s inner workings publicly.

Many engineers at SpaceX continue to operate under the philosophy that every launch is a learning opportunity and that it’s better to fail prematurely and often than wait years to execute a perfect flight. That thinking has been nurtured by the company’s large resources and continuing access to vast sums of capital.

SpaceX is known to be “hardware rich,” meaning that it is consistently producing multiple rocket prototypes that are available to test and tweak. It is committed to testing its remaining inventory of V2 Starships despite a consensus  at the company that the design is subpar, according to people familiar with the matter. Engineers think there are lessons to learn from launching the rest of the V2s, the people said.

Above all, engineers need to get better data from Starship’s heat shield tiles to help perfect the vehicle’s reusability.The tiles haven’t returned intact during any flights this year.

This year, the White House proposed phasing out the Space Launch System, a massive rocket built by Boeing Co., after is third flight. The White House argued that SLS was overbudget and inefficient, and that it should be eventually replaced with commercial alternatives, with SpaceX’s Starship an implied option. Ultimately, Senator Ted Cruz included more money for Space Launch System’s fourth and fifth flights after Starship’s setbacks sowed doubt that it would be ready to replace the Boeing-made vehicle in the near future.

SpaceX has repeatedly proven to its naysayers that it can master what was once considered near-impossible engineering. Now, it needs to regain the confidence of doubters who fear that the company might be stuck in the mud.

“The number one thing is visible, demonstrable progress,” Christensen said. “I think that’s going to go a long way toward not creating negative perceptions. And the optimal outcome from that standpoint would be that they successfully reach space with a Starship return.”

Most Read from Bloomberg Businessweek

©2025 Bloomberg L.P.