How do SpaceX and NASA compete?
They don’t. SpaceX is a for-profit company, whereas NASA is a taxpayer-funded entity free to pursue scientific discoveries that are not directly linked to financial gain.
Perceptions that SpaceX and NASA are competing with one another usually relates to NASA’s Artemis program. In 2004, President George W. Bush announced a plan to retire the Space Shuttles and return humans to the surface of the Moon. This led to the creation of a crew capsule called Orion and a rocket that ultimately evolved into the Space Launch System, or SLS. Orion and SLS are built by aerospace companies Lockheed Martin and Boeing, which in turn use their own private suppliers and subcontractors. The vehicles are assembled at NASA centers under NASA guidance, and the final product is owned by NASA. The programs generate tens of thousands of well-paying jobs in locations where they are built, and therefore enjoy strong political support from their local Congressional representatives.
SLS and Orion are both behind schedule and over budget. Meanwhile, SpaceX has grown from a small startup into a legitimate competitor of traditional aerospace companies. Though SpaceX also frequently misses timelines, its supporters argue SLS and Orion are too expensive and based on legacy technologies that are outmatched by vehicles like Starship.
Advocates for SLS and Orion point out that the vehicles guarantee the U.S. will be able to launch large payloads and humans into space. An analogy for this is aircraft carriers, which the U.S. still builds and owns even though private companies can build comparably large cruise ships.
NASA’s official position is that SLS and Orion are currently the best vehicles to get humans back to the Moon. Furthermore, the agency cannot change course without the requisite political support. SpaceX, meanwhile, doesn’t have to answer to anyone but Elon Musk, and can push ahead with Starship development to satisfy its Musk’s goal of sending humans to Mars.
How does SpaceX rely on NASA?
Without the investment of NASA, private spaceflight today would look very different. In 2006, NASA began investing in private space companies with the hope that they could one day provide cargo and crew transportation to the International Space Station. SpaceX was one of the first companies to receive money from NASA; the company was just 4 years old at the time. NASA paid for roughly half the cost to develop SpaceX’s workhorse Falcon 9 rocket.
In 2008, SpaceX received a multi-billion dollar contract to fly cargo to the ISS. The company was on the verge of bankruptcy and would likely have run out of money without NASA. Today, SpaceX generates revenue from a variety of customers, but a significant portion of its funding comes from flying crew and cargo to the ISS as well as launching NASA science spacecraft. SpaceX also flies payloads for the U.S. Department of Defense, another taxpayer-funded entity.
How does NASA rely on SpaceX?
NASA did not have a replacement ready when the Space Shuttle program ended in 2011. Despite having 7 years to prepare, the agency never received the funding necessary to finish construction of the ISS and develop a new human-capable spacecraft and rocket system, all while continuing to fly the Shuttle—which by the end of its lifetime cost $3.5 billion per year.
Anticipating the need for an alternative to send cargo and crews to the ISS, NASA turned to the aerospace industry with a novel proposal: rather than paying companies to build NASA-owned vehicles at NASA-owned facilities, what if NASA paid companies to build their own vehicles, and then bought flights on those vehicles?
In 2008, the agency signed contracts with SpaceX and Orbital Sciences Corporation—now Northrop Grumman—to build and fly their own cargo vehicles to the ISS. The plan worked: not even a year after the Shuttle program ended, SpaceX’s Dragon spacecraft made the first commercial berthing with the ISS. In 2020, SpaceX became the first private company to send NASA astronauts to the ISS.
Without SpaceX, the only U.S. company currently capable of carrying cargo to the ISS would currently be Northrop Grumman, and NASA would still be reliant on the Russian Soyuz for crew transportation.