Terran R or Ariane 6?

Relativity Space first publicly discussed the Terran R rocket about three years ago. At the time, Ellis said it was intended to be fully reusable, with both the first and second stages making propulsive landings back on Earth. Relativity planned to use its additive manufacturing to print the vast majority of the vehicle. The original concept looked futuristic, not dissimilar to a smaller version of SpaceX's Starship rocket.

Today, however, the Terran R rocket is starting to more closely resemble a traditional rocket developed by the European Space Agency—the Ariane 64, which is an Ariane 6 rocket with four solid rocket boosters. First, there is the commonality in payload fairings. After the company's social media posts about the fairing, I interviewed Ellis about what was going on with the Terran R rocket.

"Our intent wasn't to pass the fairing off as anything other than just a picture of showing the size of the fairing," Ellis said. "We can't share details about this particular supplier because of contractual obligations, but everybody put the pieces together pretty quick. So, yeah, the fairing in the image is indicative of a Terran R fairing and a fairing used for Ariane 64."

But the similarities to Ariane do not stop there. Originally, the Terran R had a diameter of 18 feet, but this has since shrunk to 17 feet, 9 inches (5.4 meters), which is exactly the same diameter as the Ariane rocket. That's because of both the new payload fairing and the pressure domes inside the rocket that store its liquid oxygen and methane propellants.

According to internal documents reviewed by Ars, Relativity had difficulty printing pressure domes for the Terran R rocket. One of the documents references a "large buckling event" with a printed dome. As a result, Relativity seems likely to purchase these pressure domes from a European aerospace company.

One of the keys to controlling costs in rocket development, at least in the United States, has been vertical integration. Companies like SpaceX and Rocket Lab have been successful by producing as many of their rockets in-house as possible. Previously, Relativity Space had sought to do things similarly by additively manufacturing most of its rockets.

But this new reliance on outside suppliers for major components is likely to drive up Terran R production costs. And there are other pain points as well, such as fees to ship the rocket across the country. The Terran R is much larger in diameter than the Falcon 9 rocket, which is 12 feet, so it cannot be transported by highway.

Therefore, Relativity plans to assemble the rocket's first stage at its capacious factory in Long Beach, California. From there, according to the internal documents, Relativity will ship the rocket 4,450 miles by barge to Stennis Space Center in southern Mississippi via the Panama Canal. There, the stage will be hot fire tested before being shipped by barge another 910 miles to Relativity's launch facilities at Cape Canaveral, Florida. The total shipping cost to get a first stage to Florida and a barge back to Long Beach was at one point estimated to be as high as $3.45 million.

Relativity betting it all on reuse

There is, of course, one big difference between the Terran R rocket and Ariane 6 booster. Relativity plans to recover and reuse the first stage (second-stage reuse plans have been dropped), whereas the European rocket has solid rocket boosters, and the entire vehicle is expendable.

Ellis said reuse allows the company to amortize the high shipping costs across many launches. And Relativity is planning to reuse Terran R many times. "We're planning for at least 20 reuses of Terran R," Ellis said. "A lot of things will get tested beyond 20 reuses, but 20 is what we're officially saying. Once you do that, even things like shipping costs are divided by quite a number of reuses. So actually, that is a huge advantage."

The first stage will use grid fins and passively deployed landing legs and is optimized to land at sea. But getting to rocket reuse is not easy. With its Falcon 9, SpaceX needed seven years from the debut launch of the rocket to the successful reuse of its first stage. The company did not reach a cadence of launching twice a month until the vehicle's tenth year of flight.

The changes in Terran R's development—going from being predominantly 3D printed to looking much more like a traditional rocket and outsourcing components like fairings and domes—have been done in response to customer demand, Ellis said.

"How do we get into operation and scale as quickly as possible?" Ellis said of the driving force behind Terran R development. "That's what solves the customer problem because right now, there is an undersupply, and it's not yet clear who is going to solve this undersupply problem in a big way."

In a private letter to "investors, advisors, and friends" summarizing the company's operations after the first half of 2024, Relativity said it currently has a backlog of $2.6 billion in commercial launches and is in discussion or has signed a contract with many major megaconstellation providers (but not SpaceX). Ellis would not confirm this, but multiple people have told Ars that Relativity recently signed a deal for multiple launches with Amazon's Project Kuiper constellation.

Ellis is not wrong—there is considerable demand for medium- and heavy-lift launch vehicles with large fairings that can carry multiple satellites to space, particularly from Amazon. But this approach represents a huge shift for a launch company that was founded nearly nine years ago to revolutionize the industry by printing rockets and rapidly iterating on the design. Now Relativity Space is aiming to beat SpaceX, Blue Origin, Rocket Lab, and others in the same lane.

"While it was a very difficult decision to make, especially because that's literally been a lot of the DNA of the company and a lot of what we've talked about publicly, it just was a decision we had to make to be pragmatic and business-focused," Ellis said about moving away from printing the majority of its Terran R vehicle. "And I would rather make that decision than pathologically hold on to something that was just not going to work on the timeline."

Relativity plans to unveil the new Terran R rocket during a presentation this fall, possibly sometime next month.

Can Relativity do it?

Relativity has a difficult road ahead. Ellis said the company is still on track to launch the Terran R rocket in 2026. However, it will take a lot of hard work in development, testing, and funding to make that happen.

The good news for the company is that the development of the vehicle's main engine, the Aeon-R, continues to go well. That is based on what Ellis said in our interview and also on sources familiar with Relativity's progress. Thirteen of these engines will power the first stage of Terran R, and Ellis said the company has completed nearly 100 hot fire tests of the full engine, including full-power, full-duration tests.

Although the engine is the most critical (and often most difficult) part of a rocket's development, there is so much more that goes into it, from the structure of the vehicle and its flight software to the logistics of transportation and testing. A company must also obtain permission from the US Space Force to launch. All of these processes consume a lot of time and money.

Relativity's last public financing announcement came in 2021 with a Series E raise of $650 million. At the time, the company had about 400 employees, but it ended the first half of this year with 1,225 employees, according to the investor letter this summer.

Since then, the company has conducted a much less publicized Series F raise. Notably, the value of the shares sold during the latest raise was $22.67, slightly less than the Series E round, which valued shares at $22.84. This slightly reduced valuation of the company's shares comes at a capital-intensive time for Relativity as it seeks to push the Terran R rocket across the finish line. For example, the company's workforce has increased by about 20 percent in the last year as it scales to meet the demands of Terran R.

I asked Ellis about the funding Relativity must raise to launch Terran R. The company's timeline suggests that a launch could happen in two years, but in aerospace, almost every major project is significantly delayed. So the company might need to keep raising significant capital into the late 2020s before Terran R becomes operational.

"It's obviously something we think about," Ellis said. "It's not the number one thing keeping me up at night right now, given we have not just great investors but also great customers. I can't comment on whether we're currently in a fundraising round. But what I can say is, of course, building a large rocket is expensive. I think, actually, investors are most scared of funding something that works, and then nobody wants it. There is no way to fail slower and more expensively than to give a company all the money and then nobody wants it."

There is real demand, and Relativity is realizing revenue from its contracts. Typically, within the industry, about 10 percent is paid upfront and then additional revenue comes in as various milestones are met. But it will take a lot of money to get Terran R to the launch pad. This places a lot of pressure on Ellis and his team. A few years ago, Relativity was printing rockets and printing money. Now, they're taking a more traditional path in a more challenging fundraising environment for new space companies.

Space is hard. Rocket startups are harder.