Rocket Lab Corp. announced a further delay in the first flight of its Neutron rocket, postponing the debut of the vehicle to 2027. The latest setback follows the identification of a manufacturing issue with the rocket’s propellant tanks during final preparations for launch.

Chief Executive Peter Beck addressed the delay in a recent video, emphasizing the company’s commitment to avoiding unnecessary risks despite the challenges encountered in the development process. “We recently hit one of those challenges that has moved Neutron’s first launch into next year,” Beck said.

This postponement marks another in a series of delays for the Neutron rocket, which was initially announced in 2021 with plans for a maiden flight in 2024. The timeline has been extended multiple times, with Rocket Lab previously targeting a launch before the end of 2026. However, in August the company already suggested it would be unlikely for Neutron to fly this year.

Rocket Lab’s current workhorse rocket, Electron, is designed for small satellite launches, whereas Neutron aims to serve the medium-lift segment. The vehicle is being developed to carry heavier payloads and compete with SpaceX’s Falcon 9 rocket, which dominates the commercial launch market.

This year has posed notable difficulties for Neutron’s development. In January, a propellant tank ruptured during testing due to a defect traced back to a third-party manufacturer, prompting Rocket Lab to shift to a new manufacturing process and implement design adjustments. Those changes led to another problem involving air pockets forming in the domed sections of the propellant tanks.

Beck explained that the company was able to reproduce the air pocket issue and introduce additional steps in the production process to prevent it from recurring. Nevertheless, the time required to diagnose and resolve the problem contributed to the delay of Neutron’s flight into next year.

Despite the postponement and corresponding drop in Rocket Lab’s share price, some analysts remain cautiously optimistic. A note from Stifel Financial Corp. highlighted the importance of Rocket Lab’s ability to identify the root cause of the defect and develop a solution.

The delay comes amid broader industry challenges related to launch capacity for medium-lift payloads. As SpaceX plans to phase out its Falcon 9 rocket in favor of its new Starship vehicle, the market is awaiting other U.S. options like Blue Origin’s New Glenn and United Launch Alliance’s Vulcan rockets, which are currently grounded or experiencing slow ramp-up periods.

Jefferies analysts noted that the postponement underscores ongoing constraints in merchant launch access for medium-lift missions in the near term, highlighting the pressure on the sector as new vehicles strive to enter service.