Rocket Lab: Deep Dive On The Neutron Rocket

Overview

Rocket Lab (RKLB)’s push into the reusable rocket market is regarded as the company’s answer to the intense competition against their rivals, SpaceX and Blue Origin. Designed to meet demands for cost-efficient payloads, the company will soon launch Neutron for satellite deployment and interplanetary mission to bring innovation and economies of scale in the market.

While it won’t take flight until next year, analysts are eager to find out if the Neutron can be the leading medium-lift reusable launch vehicle for commercial and government customers to serve both low Earth orbit (LEO). I think it’s a seriously competitive project.

As more governments increase their emphasis on space-based assets, and many private companies are now interested in deploying satellite constellations for advanced telecommunications, Earth observation, and IoT services, Neutron is likely to disrupt the medium-lift market and open doors for Rocket Lab’s higher-value launch services.

What Is Neutron

Rocket Lab designed the Neutron to offer a more cost-effective and reliable launch vehicle that can access low Earth orbit (LEO) and beyond for constellation deployment, deep space missions, cargo resupply, interplanetary missions and even human space flight. The medium-lift rocket features a large seven-meter fairing and a payload capacity of up to 13 tons in a downrange landing configuration.

The rocket stands at 43 meters with a diameter of 7 meters and a fairing diameter of 5 meters. It has a payload to LEO of 13,000 kilos, and a lift-off mass of 480,000 kilos.

Dubbed by the company as the “Hungry Hippo” fairing design, the jaws open to deploy the second stage and payload, and then it closes for re-entry so that once it returns to the launch pad, it is undamaged and can be reused.

The rocket will be powered by the company’s Archimedes engine, which was completed in May and had a successful first hot fire in August. In the first stage, it will have nine Archimedes engines and only one during the second stage.

It uses liquid oxygen (LOX) and liquid methane as propellant on both stages. This is more practical since methane is easier to store than liquid hydrogen, and it leaves less residue in engines than kerosene.

The company also emphasizes the rocket’s reusability with the first stage capable of returning directly to the launch site after completing its mission. By landing back at the launch pad, the costs associated with recovery operations in the ocean, along with complex logistics, high turnaround time and severe environmental impact are reduced.

According to reports, Neutron will be a part of Rocket Lab’s future constellation. However, CEO Peter Beck admitted in April:

“We’re not ready to reveal details on what this constellation or application may be, but I think it’s important to understand the strong foundation we’ve built up across launch and space systems to enable it in due course. Everything is irrelevant without a reusable high cadence launch. So, Neutron is really the key to unlocking that.”

After it makes its inaugural launch in 2025, the company has plans of having three launches the year after, and then another five in 2027. 

Why It’s Competitive Against SpaceX

The Neutron was designed as an alternative to SpaceX’s Falcon 9, but CEO Beck revealed that it has something more to this:

“Neutron is really important for two reasons. One, we need to bring some balance to the market with the Falcon 9, but we also need a vehicle of our own to launch our own satellites and put our own stuff in orbit.”

Beck is most likely referring to such balance to pricing. Last year, it was reported that SpaceX advertised each Falcon 9 launch for $67 million, while Rocket Lab’s Neutron will only cost $50 million per launch.

Customers that aim to participate in “ridesharing” the flight would only have to pay $4,230 per kilogram, according to one post, and this is way lower than Falcon 9’s $6,000 per kilogram pricing. This may likely force SpaceX to decrease their rideshare pricing should their clients shift to Rocket Lab due to the higher costs involved. Rocket Lab already has strong revenue growth with their more expensive current offerings. Neutron will accelerate this.

How Big Is This Market?

Rocket Lab estimates that the entry of Neutron into the medium-lift launch market for commercial and government missions in the near future can cater to the demand for more than 10,000 satellites that require launch services by 2030. This total addressable market is valued at an estimated $10 billion.

McKinsey, on the other hand, expects a total of 27,000 satellites that orbit the Earth by 2030 will require up to 5,000 satellites per year to be launched to maintain the constellations. They even expect this to reach up to 65,000 satellites in orbit in the same year should there be very high demand in the next six years.

Euroconsult also forecasts that the space exploration market will reach $32 billion by 2032 through global government investments. In the United States, the group estimates that investments have tripled over the last ten years in lunar explorations, which reached $8.5 billion last year because of the Artemis program. By 2032, funding is projected to grow by $11 billion.

Technical Risks To Neutron

As with any rocket being developed, the Neutron is not immune to technical risks. The big ones here, such as material quality and structural integrity mean the rocket’s re-entry risks making the rocket non-reusable if done incorrectly.

Beck is not worried about this. He feels confident in the product and noted:

“The big sucking sound in the room is the Neutron launch vehicle. We've just got to get it to the pad. There are a lot of people that want that booster on the pad. We've got a big job ahead of us, not only to have it on the pad, but to get Neutron into production and provide it as a reliable alternative in launch”

Bottom Line

As Rocket Lab’s Neutron makes its entry into the competitive reusable rocket market to rival SpaceX and Blue Origin, I think theres a lot to be optimistic about. With its cost-efficient payloads to LEO, Neutron is tailored for dynamic missions. It is touted as an ideal solution for both commercial and government customers.

One of the most interesting features of the rocket is its first stage reusability, which returns directly to the launch pad, thereby reducing costs, and turnaround time.

With demand for launch services expected to explode by 2030, Neutron’s innovation and key cost-efficiency makes it a promising opportunity.

Disclosure: At the time of this publication some members affiliated with Marksman Research own stock, options or other interest in RKLB.