Honda enters the launch market
On Tuesday June 17, 2025 the research and development arm of Honda conducted a test flight of an experimental reusable rocket. The vehicle ascended to an altitude of 300 meters before successfully landing. This flight marked the first launch and landing test by Honda, and while it will be years before a functional launch vehicle is built, Honda’s entry into reusable rocketry is a significant event in spaceflight.
Today, SpaceX controls more than half of the global launch market with China serving as a distant second at 26%. New players like RocketLab and Stoke Space hope to offer low-cost, high turnaround launch services for smaller satellites. There’s no real immediate threat to SpaceX’s position. This success is in part due its incredibly successful Falcon 9 rocket which has 490 successful launches to date and the company’s access to billions of dollars in capital. SpaceX successfully leverages this capital for technology development programs and acquiring labor at a discount rate. Prospective employees are willing to work there below market because of its vision(s).
Over in China, the China Aerospace Science and Technology Corporation (CASC) is a state-owned venture which operates as a legal monopoly that can dominate the local aerospace labor pool. Any new entrant, looking to take a big bite out of the launch market would need a similar base of capital, and an experienced labor pool. Enter Honda.
This rocket is not Honda’s first time making a surprise entry into a new market. In 1986, the company initiated a secret program to stand up an aviation division from scratch. Starting out with just four engineers, the company eventually produced the first HondaJet in 2003, the flagship of what would become the Honda Aircraft Company. Today, Honda is once again looking to leverage its deep bench of engineers and technicians on a new venture. Based on the success of the first flight, quite similar to SpaceX’s own early “Grasshopper” test vehicle, they’re starting out well.
We continue to believe that if a major rival to SpaceX would emerge, it would most likely be from Japan. The country’s engineering and technical base is still one of the best on the planet, and the country has a long history of favoring home-grown manufacturers to foreign ones. This means Japan’s government and private sector has both a strong incentive and the practical means to develop a rival to the Falcon rocket family.
From what we know this first test flight would be to design a rival to SpaceX’s Falcon family of rockets, and it was a major technical achievement. It took SpaceX six test flights before their Grasshopper prototype was able to fly above 300 meters. If Honda conducts a successful divert test, demonstrating the rocket’s ability to abort by shifting course during a landing, they will be ready to go to production on a booster.
Will Honda and/or the Japanese government eventually pursue a clone of SpaceX’s Starship which is still under development? Time will tell.
Historically, Japanese companies have excelled at rapidly innovating on foreign sourced products. While Honda looks like it will need to develop a launch system from scratch, it has over a decade of SpaceX flights from which to draw lessons and avoid engineering pitfalls. As those flights and component tests were not done and secret, and the internet has a cottage industry of SpaceX fans who’ve spent the previous decade dutifully recording and even reverse engineering SpaceX hardware, Honda has a lot of legacy technology at their fingertips.
However, the one thing Honda can’t develop from public information about SpaceX is the guidance systems used for launch and landing. That remains a closely guarded and constantly iterated piece of SpaceX intellectual property. This test flight was as much a demonstration of Honda’s ability to develop an effective guidance system in-house, as it was a demonstration of hardware. With the company’s aforementioned technical and financial assets, they’ve been able to go to prototype relatively quickly, and when ready can scale to production with few of the growing pains SpaceX endured.
Honda’s first competitor will not be SpaceX, but China’s CASC. At present, CASC provides launches for the Chinese government, and countries outside of the United States’s regulatory regime called the International Trafficking Arms Regulation (ITAR) system. ITAR was initially established by the USA to prevent parts used in munitions and arms to reach its adversaries. ITAR over time expanded its reach to include components and labor used for the aerospace industry. What initially was set up as a deterrent evolved into an onerous and complex regulatory system that is now questionable in terms of its effectiveness. China exploited this to capture a little over a quarter of the launch market with inexpensive, but not particularly sophisticated rockets. If Japan can offer Falcon 9 launch costs to that same market, they’ll wipe out China’s market share.
Beyond the launch market, we should also be prepared for a boom in Japanese-based satellite manufacturing to take advantage of a home-grown launch vehicle that does not have the risks of working with China, or the logistical constraints of launch so far from their home country. There’s also a likelihood that the Japanese government will also take advantage of this new capability, much as the US government did with Falcon, and increase funding to exploration and defense programs
—
Have you thought about how your organization could benefit from leveraging the space sector? It’s never too soon to take a new leadership position in what could be humanity’s ultimate business plan.