Rocket Lab aims to undercut Neutron launch price to challenge SpaceX

Rocket Lab is attempting to challenge Elon Musk's SpaceX at the launch pad with its large, reusable rocket, Neutron, which they plan to build for a price of about $50 million per launch.

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Adam Spice, the chief financial officer of Rocket Lab, stated earlier this week at a Bank of America event in London, "We are positioning Neutron to compete directly with the Falcon 9."

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The rocket's debut in 2024 was announced when the business went public in 2021, according to Spice. Rocket Lab stated in its fourth-quarter report from last month that it had started building the first Neutron tank structures and the rocket's launch pad. According to Spice, the business intends to launch the first "hot fire test" of the Archimedes engine that will power Neutron "before the end of the year."

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Spice claims Rocket Lab is attempting to equal SpaceX's $67 million Falcon 9 launch pricing on a cost-per-kilogram basis for satellite clients. According to Spice, Neutron is aiming for a "$50 million to $55 million launch service cost."

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Spice added that Rocket Lab anticipates using each of the reusable Neutron boosters "10 to 20 times," which is comparable to the Falcon 9 rocket's current rate of booster reuse.

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For launches of the Neutron, Spice said, "We ultimately anticipate the margins to be in the neighborhood of 50%." According to him, each Neutron will cost between $20 million and $25 million in materials, with the upper, non-reusable second stage of the rocket providing "nearly half of that."

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Spice also hinted at the possibility of SpaceX shifting away from launching Falcon 9 flights in light of the company's aggressive development of its enormous Starship rocket.

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“We don't have any hard data on that, but certainly, if that were to happen, Neutron would gain tremendously,” Spice said.

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Rocket Lab looks to maintain its position as a "dominant player" in the small satellite launch market sub-sector with its Electron vehicles, Spice said. “Three Electron missions are expected to launch in the second quarter, with two already launched, and 15 missions are on track to launch this year,” he added.

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More than rockets

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Spice also highlighted that Rocket Lab is "far more than" merely a rocket firm for the Bank of America audience. In fact, the majority of the company's quarterly revenue now comes from acquisitions and the expansion into the construction of satellite components and spacecraft.

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“All of this ultimately leads to the biggest space potential, which is actually on the application side,” according to Spice.

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Rocket Lab seeks to provide an "end-to-end platform for consumers" who require space-based services, as CEO Peter Beck has previously stated. According to Spice, the business aims to be running satellites and "delivering data to our customers and generating a recurring revenue stream from that," basically removing the need for other businesses to design and run their own satellites.

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Spice noted that many of the companies we are now putting into orbit on Electron are extremely unusual owners of space assets and that "the best owner of a space asset is somebody who can launch."