Rocket Lab targets Neutron launch price to challenge SpaceX

rocket lab is building a bigger, reusable launch vehicle called Neutron, and it’s aiming for a price close to $50 million per launch to challenge Elon Musk’s SpaceX.

“We are positioning Neutron to directly compete with Falcon 9,” Rocket Lab Chief Financial Officer Adam Spice said earlier this week at a Bank of America event in London on Tuesday.

The company announced Neutron during its 2021 IPO, with Spice saying the rocket remains on track to debut in 2024. During its fourth quarter report last month, Rocket Lab said it had started producing the first Neutron tank structures, as well as building the rocket launch pad. The company plans to perform the first “hot run” of an Archimedes engine, which will power Neutron, “by the end of the year,” Spice said.

SpaceX announces a Falcon 9 launch with a price tag of $67 million, and Spice says Rocket Lab aims to match that on a cost-per-kilogram basis for satellite customers. That means Neutron is aiming for a “launch service cost of $50 million to $55 million,” Spice said.

Spice also noted that Rocket Lab plans to fly the reusable Neutron boosters “10 to 20 times” each, within the current reusable performance range of a Falcon 9 booster.

“We ultimately expect margins to be around 50%” for Neutron launches, Spice added. He estimated the cost of goods for each neutron to be between $20 million and $25 million, “nearly half” of which came from the rocket’s expendable second upper stage.

Additionally, as SpaceX worked to develop its massive Starship rocket, Spice hinted at the potential for the company to move away from Falcon 9 flight missions.

“We don’t have hard data on that, but certainly, if it were to happen, it would be an incredibly bullish thing for Neutron,” Spice said.

In the meantime, Spice said Rocket Lab is seeking to maintain its position as “the dominant player” in the small satellite launch subsector with its Electron vehicles. The company plans to launch three Electron missions in the second quarter, two of which have already been completed, and is “on track” to launch 15 missions this year, Spice said.

Spice also emphasized to the Bank of America audience that Rocket Lab is “much more than just a rocket company.” Indeed, the company’s acquisitions and expansion into building satellite and spacecraft components have become the bulk of its quarterly revenue.

“All of this leads to the biggest opportunity in the space, which is really on the apps side,” Spice said.

As CEO Peter Beck previously noted, Rocket Lab aims to create an “end-to-end platform for customers” who need space services. Spice said the company wanted to operate satellites and “provide data to our customers and develop a recurring revenue stream from that”, essentially eliminating the need for other companies to build and operate their own satellites.

“A lot of companies that we (launch into orbit on Electron) are now very unnatural owners of space assets,” Spice said, adding that “the best owner of a space asset is someone who can launch.” .