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Neutron Rocket Development: 2024 Updates

Rocket Lab's Capital Efficiency

The recent acquisition of Virgin Orbit’s manufacturing capability at auction has drawn a lot of attention (appropriately so for such a massive win) but Rocket Lab has been consistently negotiating deals to drive down the cost of Neutron development. Space is a notoriously capital intensive business and Rocket Lab has distanced itself from many of its competitors by aggressively managing that risk:

  • The selection of Wallops for North American launch came with significant commitments from the state of Virginia and the Virginia Commercial Space Flight Authority: “$30 million has been set aside for infrastructure and operational systems improvements to the Mid-Atlantic Regional Spaceport, along with $15 million from the MEI Project Approval Commission in site improvements and building construction in support of Neutron.” ($15 million will go into construction for the facility, and the 30 million will be geared toward the construction of the new launch pad - TechCrunch)
  • The company secured an undisclosed capital investment incentive from the Mississippi Development Authority to build out infrastructure for Neutron’s reusable engines. According to MDA they are “providing assistance for site development and equipment relocation and installation. Hancock County and Stennis Space Center also are assisting with the project.”
  • Rocket Lab was “awarded a $24.35 million contract with the U.S. Space Force’s Space Systems Command (SSC) for development of the Neutron launch vehicle’s upper stage.”
  • “Rocket Lab has been awarded Virgin’s 144,000-square-foot Long Beach, California–based manufacturing facility for $16.1 million…Analysts from investment bank Jefferies says that the Virgin Orbit assets have helped propel Rocket Lab’s value by around $100 million, made up of $80 million in Virgin equipment and $20 million in value from the Long Beach factory.”

These four deals alone represent more than $150 million dollars in concessions, assistance, and savings - a massive impact on the bottom line. In the second half of this year we should start seeing updates on progress increase in both frequency and importance with 2024 being particularly active. It should be fun to watch.