The Falcon 9 consists of a single first stage with nine liquid oxygen/kerosene Merlin 1-C engines (hence its name) and an upper stage with a single engine of the same type. It can deliver a 23,000-pound payload to low Earth orbit at a price of $50 million, or about $2000 a pound (most launchers cost much more than this). The new rocket, the Falcon Heavy, is more powerful in three specific ways. First, it adds two more first-stage engines cores—each made of nine Merlin engines—alongside the original one (bringing the grand total for the first firing stage to 27 Merlin engines). That gives the Heavy enough thrust to lift its upper stage and larger payload into orbit. Second, it uses an upgraded version of the Merlin, with the thrust of each increased from 125,000 pounds to 140,000. The third and most innovative improvement is that the Falcon Heavy is a "two-and-a-half-stage" vehicle—or perhaps, more accurately, a two-and-three-quarters-stage vehicle.
What does that mean?
Typically, what engineers call a "half stage" is a propellant tank with no engines that drops off after its propellant is depleted. (The best-known version of this is the external tank of the Space Shuttle, which delivers propellant to the main engines of the orbiter and then separates when it's done.) The Falcon Heavy is built a bit differently. After lift-off, it "cross-feeds" propellants from the two outer nine-engine cores to the center one during its initial ascent. So while both of the side cores are providing full thrust, they are each shifting one-third of their propellant to the central core through interconnected lines. That allows the central core to thrust without depleting all of its own propellant, saving some for later. When the two side cores run out of fuel, they drop off and the central core continues with a full fuel load—and without the weight of the empty outer cores. Because those two side cores act as both engines and propellant tanks for the center stage, they could be called "three-quarter" stages—a hybrid between a half and a full stage.
This setup offers another advantage besides performance. SpaceX has always tried to recover the first stage equipment, because reusing the equipment can greatly reduce cost. In the first two Falcon 9 flights, though, SpaceX failed to do so, probably because the entry velocities make it a great challenge for the units to survive with the atmosphere. With the new scheme, the two outer cores will separate at a much lower velocity, so they may have a better chance of falling into the ocean intact. Successful recovery of those two stages could improve the company's profit margin significantly—or allow them to reduce launch prices.
What does this all add up to? It increases the Falcon 9′s payload capacity of a dozen tons by a factor of five to almost 60 tons, or 117,000 pounds. The payload would be nearly half that of the Saturn V that launched the Apollo missions to the moon, and would be the largest American rocket since then (and the largest available today). In other words, as Musk noted, it could do a manned lunar mission in two flights—by launching a crew with one flight and a lander with another. It could execute a manned lunar flyby (like the Apollo 8 mission) with a single launch. It could also toss many tons to Mars (how many depends on how fast you want to get there). And the quoted price is no more than $120 million, very close to the long-sought-after launch milestone of a thousand dollars per pound.
The Falcon Heavy could have major space business implications. A cheaper launch cost could bring in customers that were priced out before, and the extra payload capacity could entice new customers, too. That could include the Air Force and NASA. While the Falcon Heavy has only half the capacity of Saturn V, it offers twice the payload of its American competitors—United Launch Alliance's (ULA) Atlas V and Delta IV rockets, and for quite a bit less per launch—at least according to Musk's plan. If the Falcon Heavy really does launch from Vandenberg Air Force Base in California within two years and then from Florida a year later, as Musk promised on Tuesday, the Air Force and NASA will have to think about using a new launch provider for their own satellites, a field pretty much owned by ULA for this payload class to date. ULA may have to innovate—or die. Let's hope it's the former, because SpaceX just opened up the possibilities for a new, robust American launch industry.