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Relativity’s first 3D-printed rocket aims to debut a new rocket fuel
Relativity can almost taste the vacuum of space. A substantial amount of work remains, but the startup continues to defy expectations with its relentless and methodical push towards the first orbital launch of a 3D-printed rocket.
Founded in 2015, the Los Angeles-based aerospace company has taken its few years of obligatory delays in stride while pursuing a 2020 debut for its (relatively) small Terran 1 rocket. In a world with dozens of serious rocket startups, missing one’s initial launch target is practically a rite of passage – the path to orbit is never as straight and bump-free as the highway on-ramps that are often promised in pitch decks. Relativity Space, however, is no average rocket startup.
Save for SpaceX, which operates in a league of its own, no other private rocket startup has come close to matching the $1.3 billion Relativity has raised to develop Terran 1 and the much larger Terran R. More importantly, in a recent interview with Aviation Week, CEO Tim Ellis (a former Blue Origin engineer) revealed that the company could be “weeks away” from the first launch of Terran 1, a rocket that is 85% 3D-printed by mass and could simultaneously debut a new kind of rocket fuel.
Once fully assembled, Terran 1 – weighing around 9.3 tons (~20,500 lb) empty and measuring 33.5 meters (110 ft) tall – will be the largest metal 3D-printed object in the history of the technology. From that perspective, it’s hardly surprising that Relativity Space is a few years behind schedule. In fact, it’s odd that the startup isn’t more delayed, and it’s even more impressive that Terran 1’s first launch campaign has gone as smoothly as it has.
Slow, Smooth and Fast
Terran 1 Flight 1’s booster stage and upper stage both arrived at the company’s leased Cape Canaveral Space Force Station LC-16 pad sometime in May 2022. Terran 1’s first stage came directly from the California factory. The second stage (S2), however, first shipped to a Mississippi test stand a few months prior and, on its first try, completed a full-duration multi-minute static fire test known as a mission duty cycle (MDC) – about as close as it’s possible to get to replicating orbital upper stage operations on the ground. The flawless MDC was preceded by a number of simpler precursor tests, of course, but the rocket performed more or less as expected throughout the entire qualification program. If Terran’s second stage ignites again, it’ll be at the edge of space.
Since June, the critical path for Terran 1’s launch debut has thus been qualifying the first finished Terran booster. Rather than modify its Mississippi test facilities, Relativity decided to temporarily modify its heavily upgraded LC-16 pad to support booster qualification testing. Thanks to the heroic work of a shockingly small team of five people, the pad was ready to kick off testing as soon as the Terran 1 booster arrived in Florida. Even more surprisingly, senior manager Lorenzo Locante says that LC-16 – practically a new pad after Relativity’s extensive modifications – has “performed perfectly” during every booster qualification test attempted thus far.
That testing has included pneumatic proofing (an ambient-temperature gas pressure test), possible cryogenic proof tests, multiple rounds of propellant loading, preignition testing of its nine Aeon engines, and multiple spin-start tests (the last step before static fire testing) with the same engines. Given that LC-16 and Terran 1 must handle cryogenic oxidizer (liquid oxygen) and cryogenic fuel (liquid methane), which can easily create a flammable and bomb-like mixture of gases from even the smallest of leaks, it’s difficult to emphasize just how difficult it is to ensure that a complex launch pad and rocket perform nominally during their first joint testing.
According to engineers onsite during a private Teslarati tour of Relativity’s Florida launch facilities, Terran 1 S1’s next goal is to fully ignite its Aeon engines. After one or more successful static fires, the booster will be integrated with the upper stage and nosecone for a final full-duration static fire test that will also double as a full wet dress rehearsal (WDR). Testing the fully-integrated Terran 1 rocket will only be possible once LC-16’s full strongback and launch mount (also known as a transporter/erector) is completed, but that final piece of the puzzle should be ready any day now.
De Terra Ad Astra
The coming weeks will likely be some of the company’s riskiest and most difficult yet. If the rocket and LC-16 continue to operate as smoothly as they have been, however, there’s a nonzero chance that Terran 1 could beat the likes of SpaceX (Starship), Blue Origin (New Glenn), and the United Launch Alliance (Vulcan Centaur) to the punch to become the first methane and oxygen-fueled rocket in history to attempt an orbital launch.*
*While SpaceX’s Starship is technically the first large-scale suborbital methalox rocket to attempt (and complete) a launch, there has never been an orbital methalox launch attempt.
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Capable of carrying up to 1.25 tons (~2750 lb) to low Earth orbit for as little as $12 million, Terran 1 also has a shot at becoming the first new privately-developed 1-ton-class rocket of any kind to successfully reach orbit. On that front, though, Relativity is in a neck-and-neck race with Firefly Aerospace and ABL Space, both of which intend to launch similarly-sized rockets at some point in the next few months. It’s never been less clear who will cross the finish line first but one would be hard-pressed to count Relativity out.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
