Rocket Lab is waiting until Neutron is more technically mature before signing launch contracts with customers, CEO Peter Beck told investors on Wednesday.
This data provided an inside look at how the space company is thinking about bringing the next generation Neutron launch vehicle to market — and the lessons learned from the sale of its first rocket, the Electron.
“Until the vehicle is proven and flying, any launch contract you can sign is essentially worthless,” Beck said during a third-quarter earnings call. “We could go and sign a launch contract tomorrow with a number of customers, but it would be a thousands-of-dollar down payment and cancelable at any time. But that doesn’t really mean anything.”
Rocket Lab had to offer “really low introductory prices” for its e-craft when it wasn’t proven, ahead of its first commercial flight in 2018.
“We’ve been doing some of these introductory pricing for years […] “Over the years, we’ve had some really bad assignments,” Beck added. “I just don’t want to go down that road again. […] I’d rather hit the market with something that’s successful, commanding a premium price, then fill my manifest with a whole bunch of low-value releases now.
His comments came in response to a question from Jason Gorsky, an equity research analyst at Citi, who asked about the demand outlook for Neutron and when the company expects to get its first order.
They will have Neutron “on the stand” by the end of 2024, just over a year away, Beck said. Regarding demand, he said that the potential customers Rocket Lab is in talks with don’t just want one or two launchers, they want a larger portfolio to launch their constellations. The risk of signing early with these customers is that if their satellites are late, there will be a huge committed manifest that can’t fly.
“This is not a happy situation either.”