Elon Musk Is Still the King of Low-Cost Space Launch

A recent headline for Defense One labeled Rocket Lab as “The Rocket Startup That’s About to Eat Elon Musk’s Lunch.”

Don’t be misled. Elon Musk is still the king of low cost space launch.

“[Rocket Lab] is promising to put objects into space for less than $5 million per launch,” the author writes, “That’s about one-tenth as much as its nearest rival, SpaceX, which claims an average launch cost of $57 million, and a tiny fraction of the $225 million price tag for a launch by United Launch Alliance, or ULA, the U.S. industry leader made up of Boeing and Lockheed Martin. (ULA says its launches will eventually cost closer to $100 million.)”

However, if potential customers look at what the price tag gets them, SpaceX is still clearly the most cost-effective option. The main difference is the cost-to-weight ratio. While standard single launch costs for a Falcon 9 are around $62 million, according to the company’s website, the vehicle can lift more than 50,000 pounds to low Earth orbit in its most current reusable design. That’s a cost-to-weight ratio of about $1240/pound of payload. The Electron Rocket might look like the better option at $5 million per launch, but it only lifts about 500 pounds to low Earth orbit. That’s a cost-to-weight ratio of $10,000/pound of payload. By weight, Rocket Lab will put your small payload into orbit for eight times the cost of a SpaceX Falcon 9.

To be clear, the Electron Rocket can only launch very small payloads. Capability is another area where Rocket Lab won’t even come close to challenging SpaceX. The Falcon 9 has enough power to send almost 9,000 pounds to Mars. The Electron Rocket can’t even get that much weight into low Earth orbit.

The capability differences go beyond lifting power. The final version of the Falcon 9 will be entirely reusable, while every Electron Rocket will be destroyed during launch. SpaceX is constantly finding new ways to innovate in their fueling, recovery, maintenance, and other processes and refining their procedures to reduce cost across the board. To their credit, Rocket Lab has used 3D printing to advance the design and production of rockets, but the startup doesn’t even come close to the culture of innovation that SpaceX fosters in every area of the building, launch, and recovery of rockets. You can expect SpaceX to continue leading the industry in innovation as well as cost.

One final area where SpaceX is far ahead of Rocket Lab is technological maturity. While the Electron Rocket launched and reached space for the first time this week, the vehicle failed to reach low earth orbit. The company plans two more test launches before launching commercial payloads, but if they should fail to reach low earth orbit on those launches, there will be costly delays. Rocket Lab needs several successful launches before they can earn a reputation for reliability. SpaceX, on the other hand, has shown that they can consistently launch successful missions (although they have not achieved the 100% success rate of ULA) and that they can consistently develop new technologies that work, resulting in real cost savings for its customers.

So does this mean that Rocket Labs is wasting their time and money, and that customers should ignore them as an option? Absolutely not. There are plenty of factors that go into planning a mission, and depending on their requirements, customers may need the Electron Rocket. For example, if a mission needs to launch a small satellite within a very specific timeframe, or to a unique orbit, a SpaceX launch might not make sense. Per pound, the Falcon 9 is cheaper to launch, but putting a small satellite on one means ridesharing with a lot of other small satellites or piggybacking on a mission with a larger payload that happens to have some leftover space. A customer may not be able to find a Falcon 9 launch that meets their requirements, and Rocket Labs may be able to provide them with their own vehicle at a reasonable cost. That gives customers the freedom to move launch dates and change mission parameters without having to coordinate with other customers.

Another advantage of using Rocket Lab is its launch site in New Zealand. Because the site is located at such a high latitude, it will be much easier to launch a satellite into a polar orbit or a Molniya orbit, which is used commonly for communications satellites. Launches to these orbits are rare because most launch facilities are located along the equator, and reaching them requires more fuel.

Rocket Lab should be proud of what they have accomplished, and they will likely accomplish much more, but no one should expect them to pose any threat to SpaceX. Small satellite launches are only a small part of what SpaceX does, and not a market that they rely on to meet their bottom line. It is clear that Musk’s vision will take him far beyond low Earth orbit, and even if Rocket Lab manages to grab most of the small satellite contracts, there are plenty of heavy lift missions that SpaceX can handle and they cannot.

Elon Musk can eat his lunch in peace.