TOKYO -- Honda Motor will launch a test rocket by 2030 as it looks to enter the commercial space business, the Japanese car company announced Thursday, applying combustion-engine and other automotive technologies to new areas, even as the car industry shifts to electric vehicles.
Honda says it will halve small satellite launch costs, which typically run as high as 5 billion yen ($44.6 million), by reusing rockets. It plans to develop a small rocket capable of carrying satellites weighing less than 1 ton.
In addition to applying combustion technology developed for gasoline engines, the company will also apply autonomous driving technology to flight control and guidance. Honda, which set up a dedicated team to oversee the satellite launch business in 2019,will develop a prototype engine before entering the commercial market.
Small satellites are expected to find new applications, including measuring concentrations of greenhouse gases and gathering location data for self-driving cars. Indian research specialist Markets and Markets forecasts the small satellite launch business will be worth $7.1 billion in 2025, up from $2.8 billion last year. Honda decided to enter the fray, believing it could help ease a shortage of rockets and help meet demand for satellite launches.
Controlling costs is key to winning orders in the fiercely competitive commercial space market. Honda plans to return its rocket plane to the launch pad for reuse. The idea is to apply autonomous technology to make the vehicles available for repeated use more cheaply than its peers.
Honda's experience with internal combustion engines will also come in handy in developing liquid-fuel rockets. Honda's expertise in minimizing the weight of its cars should also help reduce the cost of its rockets.
Toshihiro Mibe, Honda's president and CEO, is trying to find new sources of revenue for the Japanese automaker as competition intensifies in the industry. (Photo By Tetsuya Kitayama) "Technologies related to rocket combustion and materials are in the hands of automakers. We will just change the field where the technologies are applied," said Honda CEO Toshihiro Mibe.
Honda is entering a crowded commercial space business. More than 100 companies around the world are said to be working on small rockets; some have already succeeded in launching them.
The biggest player is SpaceX, led by Tesla CEO Elon Musk. Its midsize Falcon 9 can launch many small satellites at once.
U.S.-based Rocket Lab, which launched its first rocket in 2017, has its own launch pad and uses 3D printers to launch satellites at a cost of around 500 million yen each. Another U.S. company, Virgin Orbit, had its first successful commercial launch this summer.
It remains to be seen whether Honda will able to make the large investments necessary to compete in the satellite launch business. Developing a single small rocket is said to cost several hundred million dollars. Mass production typically costs $100 million to $200 million per rocket.
SpaceX experienced repeated failures with rocket launches and returns before its business got on track. Honda may face similar difficulties early on, adding to the financial pressure.
As the car industry turns its attention to electric vehicles, it is expected that profit margins will narrow due to intensifying competition from new entrants. Investors will be carefully watching to see if Honda can get its new space business off the ground even as it shifts its focus to electric cars.
Honda also announced Thursday that it will expand into flying cars, also known as electric vertical take-off and landing (eVTOL) vehicles. The use of hybrid power systems, which combine a combustion engine and an electric motor, are expected to extend the range of such flying cars to 400 km. The company will initially aim to commercialize the vehicles for transportation between cities in North America in the 2030s.
The carmaker will raise its research and development spending to 5 trillion yen over the next six years, up 10% from the six years ended in March this year. It says the amount includes investment in new areas such as rockets and flying cars.