Revisiting Rocket Lab and Neutron

Revisiting Rocket Lab and Neutron

A reminder that I won’t be sending an Ill-Defined Space analysis to subscribers next week. It’s the day after July 4, and many of us will still be in a food coma the following day. Have a great Fourth!

Many Rocket Lab and Peter Beck stories have circulated during the last few weeks. Based on that, it is time to examine the company’s progress and see if any changes have occurred over the previous 3+ years (when I wrote about Rocket Lab’s Neutron) and whether they might impact Neutron or the launch market. The big thing that hasn’t changed for the company is Neutron is still a ghost rocket. There’ve been Neutron engine and tank tests, but no flight and, more importantly, landing tests.

Why the About-face?

While analyzing Rocket Lab’s about-face from its smallsat rocket business back then, I believed the company’s turn to develop Neutron was because the rocket would be more useful than Electron, more flexible in the payloads it could deploy, and less expensive for the company and customers to use. While useful, a dedicated small satellite launcher didn’t make sense commercially. The overall price for launching with Electron was $7.5 million (about $25K per kilogram).

The per kilogram price was not only expensive compared with larger launch vehicle options, such as the Falcon 9 or Soyuz, but it was also expensive compared with its direct competitors. However, Rocket Lab had something that many rocket companies didn’t (and still don’t) have during the time–a working rocket. And maybe it was expensive because the company priced it based on realistic business assumptions. Even if it was a small rocket, the company successfully conducted six launches that deployed 50 satellites in 2020.

When Rocket Lab introduced Neutron, its initial design looked like a grown-up Electron with some Falcon-9 landing legs tacked on its bottom. The Neutron would have a reusable first stage and an upmass capability to low Earth orbit (LEO) of 8,000 kg. At the time, Peter Beck, Rocket Lab’s CEO, noted in the press release that:

“Efficiently building the mega constellations of the future requires launching multiple satellites in batches to different orbital planes. It’s a requirement that all too often sees large launch vehicles fly with payloads well below their full lift capacity, which is an incredibly expensive and inefficient way to build out a satellite constellation.  Neutron’s 8-ton lift capacity will make it ideally sized to deploy satellites in batches to specific orbital planes…”

Later that year, Beck upped Neutron’s LEO capability to 8,000 kg (this is an excellent video explanation presented by Beck) if the first stage returns and 15,000 kg if it doesn’t. It also looked different–a little plumper (7 meters in diameter) with an attached fairing that opened like a crocodile’s mouth. The legs were the fins, permanently affixed to the Neutron’s base.

Neutron Now (and its Competitors)

As of June 21, 2024, Rocket Lab’s website advertises Neutron as able to launch 13,000 kg with no distinction of the stage returning. That capability means that Rocket Lab could launch more mass into space with its first orbital Neutron launch than all successful orbital Electron launches conducted up to this point (~4,500 kg). Assuming Rocket Lab’s marketing about Neutron’s capabilities is accurate, and whether it will be launched by mid-2025 remains to be seen.

F9-style landing legs are still at the bottom. The price? $50-55 million. Rocket Lab estimated the cost of goods for a Neutron launch would be ~$20-25 million. That’s a low per-kilogram cost of $4,230 (at the low end)--cheaper than SpaceX’s Smallsat Rideshare program ($6,000) and 17% the per-kilogram cost of Electron. 

Neutron’s 13,000 kg upmass exposes it to more competitors, but the anticipated low costs and reusability (which should allow the company to increase launch frequency) will give it an edge. Some Neutron competitors include the U.S. Antares, Russia’s Soyuz, India’s LVM3, and Japan’s H-IIA. The per-kilogram pricing for those ranges from ~$6,000 to $15,000. Frankly, except for Soyuz, none launch often enough to pose a real threat to Rocket Lab if Neutron becomes real.

China’s CZ-3B, CZ-7, and CZ-8 also pose some competition, depending on their estimated launch prices (and when they eventually increase their international presence). However, Neutron’s true competition is SpaceX’s Falcon 9, which has nearly double Neutron’s LEO upmass capability (22,800 kg). That mismatch notwithstanding, SpaceX is the only U.S. company launching consistently in 2024 so far, aside from Rocket Lab and its Electron launches. SpaceX is without competitors in 2024, even when subtracting its 51 Starlink-dedicated launches.

Neutron will launch from Wallops Island, Virginia, which is not very close to the equator. However, it’s further south than Baikonur Cosmodrome (used for many OneWeb deployments using Soyuz), Vostochny, Jiuquan, and quite a few other active orbital launch spaceports. One of the main drawbacks of using Wallops is the populated North American coastline just north of it. However, potential customers still might see opportunities in the orbits that can be reached from there, especially for constellations.

Neutron’s Customers

SpaceX’s rideshare launches, in particular, would be vying for the customers Rocket Lab is also aiming for. Neutron’s $4,230/kg pricing undercuts the Falcon 9’s $6,000/kg rideshare pricing, which is excellent news for customers. Neutron’s lower pricing also pressures SpaceX to decrease its rideshare pricing. Neutron’s mere existence may encourage SpaceX to dedicate more rideshare launches each year in an attempt to starve Rocket Lab, even before Rocket Lab launches it in 2025.

However, rideshare customers are just part of Rocket Lab’s Neutron business. Beck also mentioned constellations in 2020. Neutron will be an alternative for customers who want to deploy satellite constellations but can’t (or won’t) use the Falcon 9. Amazon’s Kuiper, for example, is grudgingly accepting it might have to rely on SpaceX to deploy its satellites. However, if Neutron works, Kuiper not only has an alternative, but the alternative is much less expensive than an Ariane 6, New Glenn, and Vulcan.

But it might take a while for Neutron to launch often enough to be meaningful to Kuiper. Until then, there may be something else that can use Neutron: Rocket Lab’s own constellation. Beck mentioned the possibility in 2020

"We've got to get the vehicle built first," Beck says. "But I'm a strong believer that if you own your own launch site, rocket, satellite, satellite components, and supply chain, then the next logical step is to build infrastructure in orbit and complete that vertical integration."

In a June 2024 interview, he mentioned the possibility of constellations again. Beck also mentioned pursuing National Space Security Launch contracts (an alternative the DoD will happily embrace). In a refreshing deviation from the norm, Rocket Lab apparently won’t pursue those contracts until it has a Neutron on the pad. 

It Might Work

Overall, Neutron has changed mainly to become more capable, durable, and reliable, which should attract customers. The pricing seems on point, and the company isn’t hobbling itself by targeting only a tiny, if lucrative, customer swath (the DoD). Maybe the best indicators of whether Rocket Lab will succeed in getting Neutron operational are the company’s actions and Beck’s words.

Beck has been very disciplined with Rocket Lab. He knew they needed to get Electron launched before going off on other endeavors, such as spacecraft manufacturing. Whatever gap analysis Rocket Lab conducted caused it to realize that Electron wouldn’t get the company where it wanted to be. The fact that Rocket Lab started developing a new rocket three years after the first launch of Electron demonstrates its flexible mindset and business. It needs that kind of flexibility and willingness to respond to reality to have a chance at succeeding.

Rocket Lab needs a working Neutron to do that, especially when it's competing with SpaceX.

If you liked this analysis (or any others from Ill-Defined Space), I appreciate any donations (I like taking my family out every now and then). For the subscribers who have donated—THANK YOU from me and my family!!

I'm a Giver. Let me donate!