Elon Musk reportedly told employees of SpaceX, the satellite company founded by the Tesla (TSLA) - Get Free Report CEO, is facing "a genuine risk of bankruptcy" due to the lack of progress in developing the Raptor engines that will power its Starship rocket.
Musk told employees in an email the day after Thanksgiving that "the Raptor production crisis is much worse than it seemed a few weeks ago," CNBC reported.
“We face genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year,” Musk added later.
He told the employees that "we have dug into the issues following the exiting of prior senior management, they have unfortunately turned out to be far more severe than was reported. There is no way to sugarcoat this."
The mention of "exiting senior management" is an apparent reference to Will Heltsley, former SpaceX senior vice president of propulsion, who was reportedly taken off Raptor production due to a lack of progress.
In addition to Heltsley, former SpaceX vice president of mission and launch operation Lee Rosen and senior director of mission and launch operations Rick Lim have left the company. Raptor engine production is now being led by Jacob Mackenzie.
"The consequences for SpaceX if we can not get enough reliable Raptors made is that we then can’t fly Starship, which means we then can’t fly Starlink Satellite V2," Musk wrote.
In March, the SpaceX prototype of its Starship SN11, which is being designed for an eventual trip to Mars, crashed during a landing attempt.
In August, SpaceX said in filings with the Federal Communications Commission that it intends to use its Starship rocket as the primary vehicle to deliver spacecraft into orbit.
The filing detailed the company's plans for operation as well as details for its low-cost internet project, Starlink, project featuring thousands of interconnected mini-satellites in low-earth orbit that deliver high-speed internet.
The company recently rolled out a beta program for select customers at a cost of $99 per month.
Last month, SpaceX reportedly reached a valuation of at least $100 billion following a share sale by current investors.