Table of Contents
- The Facts So Far
- Investor Sentiment
The Facts So Far
Rocket Lab’s new Neutron orbital launch vehicle is targeting the mega constellation satellite delivery market. Rocket Lab considers the SpaceX Falcon 9 to be their main competitor in that market.
A mega constellation is defined to be a constellation that is composed of many hundreds to thousands of satellites orbiting the earth. Mega constellation satellites are populated with “smallsats” (which FAA defines as satellites that are 600 kg in mass or below).
Rocket Lab has sized Neutron’s 8,000 kg payload capacity to accommodate what they say is needed for most constellations: 500 to 700 kg per satellite, with 5 to 11 satellites per plane.
Neutron Take 1
Neutron was first announced in March 2021. The rocket will be a partially reusable, medium lift, two-stage launch vehicle. The new rocket is being positioned as a lower cost alternative to SpaceX Falcon 9, however no comparative metrics were provided.
Neutron is being designed to support: commercial and DoD constellation launches; human spaceflight and crew resupply to the ISS. Rocket Lab currently does not have plans to build a crew or a cargo spacecraft.
The rocket is also being designed to be a “reusable-ready” platform. Following the completion of Neutron’s testing, Rocket Lab will incrementally add support for reusability over time. Reusability will be provided using propulsive landing on an ocean platform, Rocket Lab has no plans for Return To Launch Site (RTLS) landings. In reusable mode Neutron’s payload capacity is expected to be: 8,000 kg to LEO; 2,000 kg to the moon; 1,500 kg to Mars or Venus. No schedule was given for when Neutron is expected to fully support reusability.
Neutron is expected to take advantage of the following technology from Electron: additive manufacturing for the new engine; avionics; and cryogenic valves.
Neutron and payload will be assembled horizontally and raised using a strong back for launch. The traditional design of Neutron will allow it to share an existing Wallops Flight Facility launchpad (Pad 0A) currently used by the Northrop Grumman Antares rocket.
Electron and Neutron together expected to be able to lift 98% of all satellites forecast for launch through to 2029.
The CEO noted that they will not: use carbon fiber due to poor qualities when subjected to heat flux such as during reentry; and are not planning to innovate on engines. The following Neutron metrics were not available: service time between flights; and the number of flights a booster could support before needing to be replaced.
Neutron Take 2
Rocket Lab provided an update on Neutron in December 2021 and presented a radically different design than was introduced in March 2021:
Neutron now includes the option of transporting 15,000 kg to LEO for fully expendable launches. It will still transport up to 8,000 kg to LEO for partially reusable launches.
The first stage is now being designed for a RTLS landing, however landing on ocean platforms is not ruled out.
The rocket is still 40 m high, however it has a much larger diameter. Also, Neutron no longer uses an expendable payload fairing. The first stage now has a permanently attached payload fairing. The first stage and attached fairing are fully reusable, the second stage is not. The second stage is weight optimized.
Neutron is being designed for a 24 hour turnaround. (As a side comment, IMHO this design goal may be related to the US Military’s interest in exploring point-to-point cargo transfer from CONUS to anywhere on earth and their interest in responsive launches.)
Neutron and payload will now be assembled vertically. Neutron will now use a custom launch/landing site that will be constructed by Rocket Lab.
Neutron Take 3
Updates were published as part of a presentation on June 9 at a conference. The new changes were:
Tagline has changed from “The Mega Constellation Launcher” to be “The Constellation Launcher.”
States that 82% of small satellites launched by 2028 will be constellation missions.
Neutron payload changed to 13,000 kg delivery to LEO with downrange landing. No comment on expendable launch payload capacity.
Added statement that Neutron is designed for the deployment needs of constellations, which require launch in batches to different orbital planes. Reconfirmed that the rocket is also being designed to support both commercial and DoD missions.
Reference to providing services to ISS has been dropped. Rocket Lab is now saying that the Neutron is being designed to support human spaceflight and interplanetary missions.
The big question – how is Neutron positioned relative to development risk, market size, and competitive landscape?
A good place to start is by looking back at Rocket Lab’s development history. The company was founded in June 2006. Early work on the Electron small lift launch vehicle is estimated to have started in 2012. The Electron had its first successful test flight in January 2018 – a 6 year development cycle. Neutron’s development cycle started in 2021 and Rocket Lab is forecasting the first successful test flight for 2024 – a 4 year development cycle.
Neutron does not reuse much from the Electron rocket. It is a completely new rocket design which is significantly more complex than the Electron. Neutron’s brand-new design brings with it significant development schedule risks, related to new: reusable rocket engines; reusable fairing; light weight second stage; reentry thermal protection; materials; refurbishment and requalification for flight within 24 hours; manufacturing infrastructure and processes; operations infrastructure and processes (vehicle assembly, payload integration, launch, recovery, refurbishment); flight software (including support for propulsive landing); NSSL certification-ready; and NASA human-rated certification-ready.
Since the initial announcement in March 2021 Rocket Lab has continued to make significant specification changes – some of which represented a 180° change from previous specifications, e.g. strong statement that carbon fiber will not be used because it will not be able to handle reentry temperatures, was changed to carbon fiber will be used. It is not clear how long it will take Rocket Lab to lockdown the specifications for Neutron. Specifications churn may delay some development activities and result in rework of completed activities.
In order to be allowed to bid on DoD launch contracts, Neutron needs to be NSSL certified; this is a complex and lengthy process that took SpaceX two years to complete for Falcon 9.
In order to be allowed to transport NASA astronauts Neutron’s design will need to comply with NASA human-rated requirements. Complying to those requirements took both SpaceX and ULA several years to complete. Moreover, a human-rated space capsule would be required and that is not currently part of Rocket Lab’s plans.
Schedule delays will push out commercial availability, revenue, and increase cash requirements. Considering all the risks associated with the program, it is a certainty that there will be delays.
The majority of the LEO mega constellation satellites which have been launched and are forecast to be launched… are from SpaceX, Amazon, Planet, Spire, Swarm (now part of SpaceX) and OneWeb. Moreover, 86% of smallsats launched between 2012 and 2021 are owned by SpaceX, Planet, OneWeb, and Spire (as the following chart illustrates).
Between 2017 and 2021, the vast majority of smallsats were launched by Falcon 9 and Soyuz launch vehicles (as the following chart illustrates). Note that Rocket Lab had a very small, and declining, number of smallsat launches during the same period.
“Satellite Constellations: 2021 Industry Survey and Trends” and it’s associated website provides a detailed review of satellite constellations currently planned, under development or operational. The majority of the constellations are using, or planning to use, smallsats and are launching to LEO.
As of May 22, Rocket Lab had the following launch contracts related to small constellations (note that some of these contracts started back in 2021):
- Hawkeye 360: 15 satellites, 3 launches
- Kineis: 25 satellites, 5 launches
- Blacksky: 12 satellites, 6 launches
- Synspective: 3 satellites, 3 launches
Rocket Lab has identified the Falcon 9 as their primary competition. However, they have not provided any information on why Neutron will be superior, or competitive, to Falcon 9 relative to metrics such as: payload capacity, scheduling flexibility, launch vehicle performance, ridesharing, reliability, cost per launch, cost per kilogram… or any metric.
The competitive landscape is rapidly evolving. When Neutron begins offering commercial launch services sometime in the future, Falcon 9 will not be the only competition Neutron will be compared against by customers deciding on a launch service provider. Over the next few years, new and upgraded launch vehicles will be available from incumbents and start-ups – offering a range of payload capacities, enhanced ridesharing, and lower costs.
Launch vehicles are segmented by how much payload they can carry into orbit:
- Small Lift: < 2,000 kg
- Medium Lift: 2,000 to 20,000 kg
- Heavy Lift: > 20,000 to 50,000 kg
- Super Heavy Lift: > 50,000 kg
Of particular note, SpaceX’s Starship, a super heavy lift launch vehicle, will be available for commercial service years before Neutron. Starship’s payload capacity and cost per kilogram will be orders of magnitude better than Neutron.
Heavy and super heavy lift launch vehicles have the advantage when it comes to servicing mega constellation customers. In 2020 the RAND Corporation published a report which examined the heavy lift launch vehicles market (which includes Falcon 9). The report made the following insightful observation relative to mega constellations launch vehicle requirements: “Heavy lift launch is the preferred method for building out initial constellations because it provides an efficient and cost-effective means of populating entire planes within a constellation, requiring fewer launches. However, small and medium lift launches may become a preferred method for replenishing and/or replacing satellites once initial constellations are completed because of variable demand in the number and orbits of the satellites.”.
The RAND report also provided the following insight on how commercial buyers make decisions: “Commercial buyers stated that they selected launch service providers based upon: reliability and insurability; scheduling flexibility; and launch vehicle lift performance. The price of launch services is a less important factor; Customers said that they are willing to pay a high price premium for improvements in those three areas. Selection as a NSS-certified launch provider can also affect those areas, and the launch provider’s ability to win business.” SpaceX Falcon 9 has all those boxes checked off, and has a very strong competitive advantage.
Since it is unlikely that Neutron can compete with SpaceX or other heavy lift service providers (e.g. ULA, ArianeSpace, Blue Origin, IRSO, Roscosmos) for initial mega constellations build outs, the question then becomes: How will Neutron compete against small and medium lift launch vehicles after the initial constellations have been built out?
Rocket Lab currently faces significant, and growing, competition in the small and medium lift launch services market from companies in Europe, India, China, Japan, South Korea, as well as United States based companies such as Astra, Firefly, Stoke, ABL, ULA, Northrop Grumman, and Relativity.
The illustration below highlights small lift launch vehicle competition from the European market.
Launch vehicles that service medium lift payloads include: Falcon 9, Soyuz-2, PSLV, Antares, Nuri, H-IIA, Long March 2D, GSLV Mk II, GSLV Mk III, Minotaur 4/5/6 (US government payloads), Vega C, Angara, Proton–M, Atlas V, Vulcan, Ariane 5, and Ariane 6.
Small and medium lift launch service providers will face ongoing competition from rideshare flights by heavy lift launch services.
Neutron is also not very well positioned relative to the reusable launch vehicle competition. In 2024, Rocket Lab is forecasting the first test launch of a “reuse ready” Neutron. In 2024, SpaceX Starship will be flying commercial customers. Starship is a fully reusable launch vehicle with industry-leading $/Kg. In 2024, Relativity Space is forecasting the first test launch of Terran R. Terran R is a fully reusable launch vehicle that already has a multi-launch contract with OneWeb. Neutron is a partially reusable launch vehicle in a market where the competition will be fully reusable launch vehicles.
Rocket Lab has lost over 65% of its market capitalization in the 52 week period ending June 29, 2022.
With currently available information it is difficult to see how Neutron will be competitive or successful.
As the saying goes, That dog won’t hunt…
Additional information for the curious
Last updated August 26, 2022.