Launch costs to drop by 60% in a decade and 93% by 2040: The tectonic shift in the space economy has begun
The cost of transporting goods into space is continuing to fall at a pace faster than imagined. According to the latest research published by economist Alessio Terzi and colleagues at the Bennett Institute for Public Policy at the University of Cambridge, launch costs to Low Earth Orbit (LEO) are projected to drop from approximately $3,800/kg today to $1,600 by the end of 2030, and down to $300 by 2040. Japanese media reports have also indicated the possibility that costs, which were $3,868 per kg in 2025, could fall to $1,569 by 2030 and $273 by 2040.
To be honest, when I first saw these figures, I doubted whether they could really fall that far. However, knowing the scale of the data backing this research changed my impression.
An 'experience curve' derived from 4,400 launches
The hallmark of this study is, above all, the size of its dataset. It uses one of the largest global datasets to date, covering over 4,400 launches from 1960 to 2025, to forecast future trends. The study spans 16 major space-faring regions and countries and over 330 types of rocket configurations, including launch records from the United States, Russia, China, India, Europe, and Japan.
The analysis is centered on an empirical rule known as 'Wright's Law.' This law states that costs decrease by a certain percentage every time cumulative production doubles. In this study, the result was that for every doubling of cumulative payload, the average cost per kg decreases by 21.2%.
The study cites the 19th-century steamship maritime transport revolution as a point of comparison. The cost of reaching space is falling at a faster pace than the decline in steamship freight in the 19th century, and is even progressing faster than solar power panels, which are considered a representative example of 'rapidly cheapening innovative technology.' In fact, since the transatlantic crossing by the SS Savannah in 1819, the transport cost of wheat and cotton is said to have fallen by 15.5% for every doubling, meaning the 21.2% for space is a faster pace.
Why did it accelerate after the Cold War?
The cost reduction did not proceed in a straight line. Launch costs, which exceeded $87,000 per kg in 1960, fell to about $20,000 by the early 1970s due to the space race, but stagnated at that level for a long time after the end of the Apollo program and the retirement of the Saturn V rocket.
The tide turned after the end of the Cold War. Analysis shows that since the fall of the Berlin Wall in 1989, the rate of cost decline has accelerated by more than 2.5 times compared to the era of government-led space development that preceded it. This means that an era of international cooperation and private sector participation was more effective for cost efficiency than state-led competition. Nicoli, one of the researchers on the team, also points out that state-led competition during the Cold War did not generate as much cost efficiency as the subsequent era of international cooperation and private sector entry.
This structure overlaps with the process by which SpaceX's reusable rockets have changed the premises of the space business. Previously, in an article covering SpaceX's 2025 launch performance, I touched on how reuse and mass production are creating a virtuous cycle of cost reduction.
The risk of 'monopoly by a single company' still looms
However, there is a major caveat to this forecast. The researchers warn that a combination of monopolistic conditions by profit-maximizing companies and geopolitical tensions could drive up prices and delay the transition to the next space age. It is noted that the space launch market is already dominated by SpaceX, which accounts for approximately 80% of the world's annual launch payload.
Terzi likens this situation to another monopoly in history. A co-authored paper has even been published stating that this market dominance by SpaceX is comparable to the East India Company's control of maritime trade in the 1820s. International reports also point to concerns unique to a 'dominant supplier' where SpaceX accounts for about 75% of the total payload, and while there is a range in the estimated percentages, the high degree of dependence on a single company is a point consistently emphasized in various reports.
Conversely, it has been pointed out that the reason costs continued to fall in the steamship era was that multiple shipping companies were competing fiercely on Atlantic routes. Whether multiple players can continue to compete in space as well will likely be the deciding factor in whether this forecast becomes reality.
What 'things we can do in orbit' changes with the numbers
Many people may not grasp the impact of the absolute level of costs. One estimate introduces the analogy that the current level of $3,868/kg is close to the price of a high-end laptop, and at the 2040 target of $273/kg, it would be cheaper than an airline's excess baggage fee. This change in price range will fundamentally alter which businesses are profitable in orbit.
In fact, the article also states that the decline in launch costs could lead to the birth of new industries, from research in microgravity environments and orbital tourism to factories that export fiber optic cables and 3D-bioprinted organs back to Earth. Seeing the term 'bioprinting' might remind some of the organ bioprinting initiatives on the ISS that I covered previously.
The growth in demand cannot be overlooked either. Since 2020, the amount of payload placed into orbit has shown 31% annual growth, which is striking compared to the average annual growth rate of 4% from 2000 to 2019. In 2025, approximately 4,900 tons will be launched into orbit, and the space economy will exceed $600 billion as of 2024, which is comparable to Sweden's GDP. Terzi and Nicoli predict that this volume will nearly double by 2030, with annual transport capacity to low Earth orbit reaching 9,100 tons.
Conclusion
Looking only at the angle of declining launch costs, it may seem like a dull discussion of numbers, but behind it lies a major change: 'space is shifting from a special industry to a place for ordinary economic activity.' Terzi's words, 'Space is no longer a science fiction fantasy or a subject of pure scientific exploration, but is becoming a market,' succinctly express the conclusion of this entire study.
On the other hand, whether the pace of cost reduction continues depends on the structural risk of relying on a single company. Moving forward, the full-scale operation of Starship and the trends of new market entrants will be critical variables that determine whether this forecast scenario holds true.
○ Space cargo costs could fall more than 90% by 2040, study suggests (July 14, 2026)
https://phys.org/news/2026-07-space-cargo-fall.html
○ From Sputnik to Starship: Estimating the experience curve of space launch technology (July 2026)
https://academic.oup.com/pnasnexus/article/5/7/pgag217/8732400
○ Space launch costs could fall 93% by 2040, opening orbit to new industries (July 2026)
○ Space launch costs to fall 90% by 2040, Cambridge study (July 2026)
○ In July 2026, Cambridge economist Alessio Terzi and colleagues published the largest launch-cost dataset ever assembled (July 2026)
○ A new era of space business as shown by SpaceX's record-breaking performance (January 2026)
