A SpaceX Crew Dragon experienced an "anomaly" during ground tests that manifested as a column of smoke rising from the spacecraft's thrusters.
However, in March, Musk's SpaceX pipped Boeing to the post by successfully completing its first mission of sending an unmanned capsule to the International Space Station, which returned safely to Earth.
In a statement on Twitter, NASA Administrator Jim Bridenstine said the anomaly happened during part of a static fire test of the Crew Dragon's SuperDraco engines at Florida's Cape Canaveral Air Force Station.
NASA has awarded SpaceX and Boeing Co a total of $6.8 billion to build competing rocket and capsule systems to launch astronauts into orbit from American soil. NASA has issued a statement on the matter, saying, "This is why we test". A US Air Force spokesperson told local press the incident, at Cape Canaveral Air Force Station, had been contained and no-one had been injured. In a statement, the company said the failure occurred as it was conducting "a series of engine tests".More news: Discredited liar Sarah Huckabee Sanders defends her constant lying
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In preparation for the abort test, SpaceX crews had been refurbishing and testing the vehicle to ensure that its contact with the salty water of the Atlantic would not cause any problems. The spacecraft was to be tested near SpaceX's Cape Canaveral Landing Zone facilities, where the company has a small but dedicated space for Dragon tests.
It's now unclear how the anomaly will affect future flights of the Crew Dragon, but it's reasonable to suggest such an incident will delay the launch of a crewed SpaceX flight by months. Crew Dragon's catastrophic explosion comes as a particularly extreme surprise given how extensively SpaceX has already tested the SuperDraco engines and plumbing, as well as the successful completion of the spacecraft's launch debut.
NASA called the flight "a major milestone", and it raised hopes that the Crew Dragon´s first manned flight could take place before year´s end.
NASA is counting on SpaceX´s capsule, as well as Boeing´s Starliner, to ferry astronauts to and from the ISS, a task handled since 2011 by Russian Federation. Officials had previously said the first flight with astronauts could be as early as this summer, but the schedule is under review.