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Rocket Lab announces SPAC merger and new 8-ton reusable launch vehicle

File photo of a Rocket Lab Electron launch. Credit: Rocket Lab

MAR. 1, 2021–This morning, Rocket Lab USA announced it was starting development on a new, reusable launch vehicle, capable of launching 8 tons to orbit, and catered specifically towards the mega-constellation market, named Neutron, launching in 2024. Rocket Lab also announced that it would go public through a merger with Vector Acquisition ($VACQ), a special-purpose acquisition corporation (SPAC). The deal is expected to close in Q2 2021, with Rocket Lab publicly listed on the Nasdaq as $RKLB, and valued at $4.1 billion. The SPAC deal is similar to that of Astra, which is in the process of merging with Holicity, Inc. in order to go public also in Q2 2021.

Rocket Lab’s announcement comes after years of denying they would ever build a larger vehicle and denying they would do reusability. In order to settle this, CEO Peter J. Beck stood by his promise and ate his hat during the Neutron unveil video.

Rocket Lab is marketing Neutron, which stands at 40 meters tall and 4.5 meters wide, as a “direct alternative to SpaceX’s Falcon 9,” claiming that the rocket can lift “98% of all satellites forecast to launch through 2029.” Neutron, which will burn RP-1/LOX through a currently unknown engine configuration, will launch from Wallops Flight Facility, Virginia, USA. The vehicle is also marketed towards the Department of Defense, ISS resupply, human spaceflight, and more, with the development program expected to cost $200 million.

Rocket Lab presentation slide on Neutron. Credit: Rocket Lab

Along with these two major announcements, Rocket Lab also revealed that components from the first recovered Electron rocket, “Return to Sender”, are already scheduled for re-flight. Furthermore, the first full re-flight of a booster is scheduled for next year. Rocket Lab also placed significant emphasis in their presentation to investors about their vertically integrated process – over 90% of Electron components, from reaction wheels to engines, are made in-house.

Rocket Lab’s announcement comes mere days after Relativity Space, a company yet to even launch their first rocket, unveiled the Terran R, another fully reusable launch vehicle to compete with SpaceX’s Falcon 9. Terran R is an evolution from the company’s Terran 1 rocket, a nearly fully 3D-printed rocket utilizing some of the world’s largest additive manufacturing systems. Terran 1 is expected to launch sometime this year and is capable of carrying 1,250 kg to orbit. Terran R, however, is aiming to be able to carry 20,000 kg, right up next to Falcon 9, while also reusing its second stages through yet unknown means.

While some are warning of a new space “bubble” – in which there would not be enough demand to go around, killing many of the new launch providers, Relativity’s CEO, Tim Ellis, expects the opposite. “There’s actually going to be a launch shortage, if you look at how many people are trying to launch payloads to space,” said Ellis. “Almost every model we’ve looked at, there need to be more launch vehicles to deploy even a fraction of the plans people are talking about.”

Elsewhere in the new-space industry, multiple providers are aiming for a first launch this year. Astra, with an orbital near-miss under their belt, secured a contract with NASA to launch 3 missions from Kwajalein Atoll in the Marshall Islands throughout 120 days, with a price of ~$2.6 million per launch. Firefly is gearing up for their first launch at Vandenberg’s SLC-2, and ABL Space Systems, a quiet lurker in the competition, recently won a contract from L2 Aerospace for their first launch in Q2 2021, as well as a contract from Lockheed Martin to launch from the UK.

What is clear from all of this is that the so-called “New Space” bubble is rapidly expanding, with each company trying to find a way to diversify itself from the rest. With Rocket Lab and Relativity both reaching for larger, reusable rockets, as well as Astra and ABL reaching for rapid, low-cost, launch-anywhere capability, competition in the bubble is only becoming fiercer and fiercer. Whether Ellis’s guess will be right, and every provider will find its place, or if he will be wrong, and instead the bubble collapses and takes many of these companies with it, is only for time to tell.

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