"In addition to building its own engines, rocket bodies, and capsules, SpaceX designs its own motherboards and circuits, sensors to detect vibrations, flight computers, and solar panels," Vance wrote. "The cost savings for a homemade radio are dramatic, dropping from between $50,000 to $100,000 for the industrial-grade equipment used by aerospace companies to $5,000 for SpaceX's unit."
We've discussed before what the vision is, short term: A reusable rocket that can fly over and over and over again, one that could quite literally make it impossible for anyone--including massive government contractors with deep pockets--to compete with Musk until they follow suit.
But, in the meantime, SpaceX has been going to crazy-seeming lengths to cut the costs of its Falcon 9 rocket, reusable or not.
"There are dozens if not hundreds of places where SpaceX has secured such savings," Vance wrote, referring to the $5,000 radio, which, like many SpaceX parts, was made out of consumer electronics-level equipment, not "space grade" stuff.
But how do you know if a $5,000 radio designed in-house is going to work against the tried-and-true legacy parts? How do you build the entire rocket's avionics computer system for just over $10,000, when standard rocket companies use systems that cost in the neighborhood of $10 million?
Well, you test both of them on the same flight. While we've been watching SpaceX try to land a rocket on a boat, Vance notes that the company has been performing dozens of experiments in secret. It'll load a rocket with both the legacy part and the one it's designed in house, and test them both without making a big deal out of it.
"Engineers then compare the performance characteristics of the devices. Once a SpaceX design equals or outperforms the commercial products, it becomes the de facto hardware," Vance wrote.
Musk did this type of thing with Tesla too, of course, but with SpaceX, he not only trusted people who had no hardware designing experience to make things that would fly on a real-life rocket, he demanded that they make something best-in-class for absurdly low prices on absurdly short deadlines.
Vance relays a story from 2004, in which Musk asked Steve Davis, now SpaceX's director of advanced projects, to source an actuator that would help the second stage of the Falcon 1 rocket steer itself.
"Naturally, [Davis] went out to find some suppliers who could make an electro-mechanical actuator for him. He got a quote back for $120,000," Vance wrote. "'Elon laughed,' Davis said. 'He said, 'That part is no more complicated than a garage door opener. Your budget is $5,000. Go make it work.''"
Davis spent nine months designing and building the thing for a grand total of $3,900.
Repeat that process hundreds of times, and you've got a rocket that's cheaper and, seemingly, just as reliable as anything that's ever been made.