The Business of Rocket Engines: Who Makes Them and How They Work

If launch vehicles are the trucks of the space economy, rocket engines are their powertrains, and like the automotive industry, who controls engine technology controls the competitive landscape. The rocket engine market is one of the most technically demanding and strategically important segments of the space industry, with a handful of companies controlling the technology that makes spaceflight possible.

The global rocket engine market is valued at approximately $8-10 billion annually, encompassing development, production, testing, and aftermarket services. But the market's importance far exceeds its direct revenue: every dollar of launch services, satellite deployment, and human spaceflight depends on reliable, performant engines.

How Rocket Engines Work: A Quick Primer

All chemical rocket engines work on the same basic principle: combust propellants to produce high-temperature, high-pressure gas, then expand that gas through a nozzle to generate thrust. The key engineering variables are:

• Specific impulse (Isp): A measure of fuel efficiency, meaning how much thrust per unit of propellant consumed. Higher is better. Measured in seconds
• Thrust: The raw force output, measured in kilonewtons (kN) or pounds-force (lbf). First-stage engines need high thrust; upper-stage engines prioritize efficiency
• Propellant combination: The choice of fuel and oxidizer determines performance, complexity, and operational characteristics
• Engine cycle: How propellants are fed to the combustion chamber, whether gas generator, staged combustion, full-flow staged combustion, or expander cycle

The Major Rocket Engine Manufacturers

SpaceX: Vertical Integration King

SpaceX builds all its engines in-house, a vertically integrated approach that gives the company complete control over its supply chain, costs, and development timeline.

• Merlin 1D: The kerosene-LOX (RP-1/LOX) gas-generator engine powering Falcon 9. Nine Merlin engines on the first stage produce ~7,600 kN combined thrust. Merlin has become the most frequently flown rocket engine in history, with a reliability record exceeding 99.8% across thousands of engine-flights
• Raptor: The full-flow staged combustion methalox (CH4/LOX) engine powering Starship. Raptor is arguably the most advanced rocket engine ever built: it's the first operational FFSC engine, operating at extreme chamber pressures (~300 bar). Each Starship Super Heavy booster uses 33 Raptor engines. SpaceX is producing Raptors at a rate of one engine per day, targeting costs under $1 million per engine
• Draco/SuperDraco: Hypergolic thrusters for Crew Dragon spacecraft maneuvering and abort capability

Blue Origin: The BE Engine Family

Blue Origin's engine division is a significant business in its own right, supplying engines both to Blue Origin vehicles and external customers.

• BE-3: A liquid hydrogen/LOX engine powering the New Shepard suborbital vehicle. Throttleable and restartable, optimized for vertical landing
• BE-4: An oxygen-rich staged combustion methalox engine producing ~2,400 kN thrust. BE-4 powers both Blue Origin's New Glenn rocket and ULA's Vulcan Centaur, making it one of the few modern engines sold to external customers. The engine's development took longer than expected but successfully debuted on Vulcan's maiden flight
• BE-7: A hydrogen/LOX engine designed for the Blue Moon lunar lander, optimized for deep-throttling capability needed for precision lunar landing

Aerojet Rocketdyne (now part of L3Harris)

The largest pure-play rocket engine company in the United States, with heritage dating back to the Apollo program.

• RS-25: The Space Shuttle Main Engine, now powering NASA's SLS core stage. Each SLS uses four RS-25s. Currently being adapted for expendable use (RS-25E) with cost reductions
• RL10: One of the most reliable upper-stage engines ever built, powering Centaur stages on Atlas V and Vulcan. Over 500 flights across six decades
• AR1: An oxygen-rich staged combustion kerosene engine that was developed as a domestic alternative to the Russian RD-180, though its future is uncertain with Vulcan's adoption of BE-4

Rocket Lab: Rutherford and Archimedes

• Rutherford: The first flight-qualified engine to use electric pump feeds (instead of turbopumps), powering the Electron small launch vehicle. 3D-printed and produced at high volume. Hundreds of engines flown, at nine per first stage plus one on the second stage
• Archimedes: An oxidizer-rich staged combustion LOX/methane engine for the Neutron medium-lift vehicle, whose first launch Rocket Lab still targets for late 2026. Designed for reusability and cost-effective production

European Manufacturers

• ArianeGroup (Safran/Airbus joint venture): Builds the Vulcain 2.1 (hydrogen/LOX) and Vinci upper-stage engines for Ariane 6, plus the Prometheus reusable methalox engine under development
• Avio: Produces the P120C solid rocket boosters for Ariane 6 and the Zefiro motors for the Vega-C rocket

Russian Legacy Engines

• NPO Energomash: Producer of the legendary RD-180 (Atlas V first stage) and RD-170/171 family. The RD-180 was considered the best kerosene engine in the world for decades, but geopolitical sanctions have effectively ended Western purchases
• KBKhA: Manufacturer of the RD-0124 and other upper-stage engines for Soyuz and Angara rockets

Business Dynamics of Rocket Engines

Make vs. Buy

The industry is split between companies that build engines for their own vehicles (SpaceX, Rocket Lab) and those that sell to external customers (Blue Origin selling BE-4 to ULA, Aerojet Rocketdyne selling RL10). The trend is toward vertical integration: companies that control their engine supply chain can iterate faster, reduce costs, and avoid dependency on external suppliers. SpaceX's ability to rapidly iterate Raptor designs is a direct consequence of building engines in-house.

The Methane Revolution

A clear industry shift is underway from kerosene (RP-1) and hydrogen to methane (CH4) as the preferred fuel. Raptor, BE-4, Archimedes, Prometheus, and China's Tianque engines all use methane. The advantages: methane is cleaner-burning (enabling reuse without extensive refurbishment), has good performance, is widely available, and can theoretically be produced on Mars from atmospheric CO2, a key factor in SpaceX's long-term vision.

Reusability Changes the Equation

When engines are expendable, total production volume is the key cost driver. When engines are reused, lifetime and maintenance costs become critical. SpaceX's Merlin engines have demonstrated 20+ flights per engine. Raptor is designed for 100+ reuses. This shifts the economic optimization from minimizing production cost to maximizing total impulse delivered per engine across its lifetime.

Production Scale

SpaceX produces more rocket engines annually than the rest of the world combined: hundreds of Raptor engines per year, on top of Merlin production.This scale provides learning-curve cost reductions and supply chain leverage that smaller producers cannot match. For new entrants, achieving competitive engine costs requires either comparable production scale or fundamentally different manufacturing approaches (like Rocket Lab's 3D-printed Rutherford).

Future Outlook

The rocket engine market is evolving rapidly:

• 3D printing: Additive manufacturing is revolutionizing engine production, reducing part counts by 80%+ and enabling geometries impossible with traditional machining. Relativity Space, Ursa Major, and Launcher (acquired by Vast in 2023) have all bet on 3D-printed engines
• Detonation engines: Rotating detonation engines (RDEs) promise 10-15% efficiency improvements over conventional combustion. DARPA and several startups are pursuing this technology
• Nuclear thermal: DARPA's DRACO program, a planned in-orbit nuclear thermal engine demonstration with Lockheed Martin, was ended in 2025; nuclear propulsion research continues at NASA and elsewhere
• Standardized engines: Ursa Major's business model is to be the "engine supplier to the industry," selling standardized modular engines that multiple vehicle manufacturers can integrate

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