(BN) Musk Says SpaceX Reusable Capsule Could Ferry Astronauts by 2016

(Bloomberg )  Musk's Space Exploration Technologies Corp., the first private rocket maker to deliver cargo to the International Space Station, said its reusable capsule will be ready to take astronauts there within two years.

The closely held company's Dragon V2 spaceship can carry as many as seven people and as much as four tons of cargo, Musk said late yesterday at the SpaceX factory and headquarters in Hawthorne, California. It's also being designed with legs and re-entry rockets to let it land anywhere back on Earth, he said.

"We actually expect to be able to transport crew by 2016, a year before NASA needs it," said Musk, a 42-year-old billionaire who also leads electric-car maker Tesla Motors Inc. (TSLA) "We feel fairly confident we'll be ready."

The event comes as Musk fights to expand SpaceX's business with the U.S. beyond NASA missions and get a piece of the $67.6 billion Defense Department budget for satellite launches. SpaceX sued the Air Force last month, accusing the service of creating an illegal monopoly for that business.

United Launch Alliance, a joint venture of Bethesda, Maryland-based Lockheed Martin Corp. (LMT) and Chicago-based Boeing Co. (BA), has a lock on that work.

Since the retirement of the National Aeronautics and Space Administration's space shuttle fleet, Russia's Soyuz rockets are the sole method of getting astronauts into space. While Russia is currently charging as much as $76 million per mission, SpaceX intends to be able to deliver passengers for less than $20 million, Musk said.

"It's not only that the Russians are taunting us. They are massively overcharging," he said.

NASA Funding

SpaceX is one of four companies receiving NASA funding to develop rockets and capsules to take astronauts to and from the International Space Station. The others are Boeing, Jeff Bezos's Blue Origin LLC and Sierra Nevada Corp.

SpaceX has received more than $2.5 billion in NASA funding since 2008 for commercial crew and other ventures, including cargo supply flights to the space station, according to agency figures.

SpaceX won $440 million from NASA in August 2012 to develop a version of the Dragon capsule to carry passengers. Development costs for the company's first capsule and the futuristic V2 version displayed yesterday will run to as much as $1 billion to get NASA certification, Musk said.

Tests by the U.S. space agency to certify the V2 for astronaut missions begin this year, SpaceX said.

The California company sent its first Dragon craft to the International Space Station in May 2012 and its latest cargo mission was completed May 18 when a Dragon capsule returned to Earth carrying 3,500 pounds of cargo and scientific samples.