China’s SpaceX Moment: Commercial Space Industry is Replicating the “Scale-Driven Cost Reduction” Curve of Photovoltaics and Lithium Batteries

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China's commercial space industry is following a familiar path—first using scale to drive down costs, then leveraging cost advantages to open up the market. Just like photovoltaic and lithium batteries in the past.

From opening up to private enterprises in 2014, to the first privately developed rocket successfully reaching orbit in 2019, and the relaxation of IPO conditions in 2025, China's commercial space sector has completed a foundational decade.

"China's commercial space sector is approaching the inflection point of commercialization." According to Wind Trading Desk, UBS Securities analyst Li Kunlun and others judge in the latest China commercial space research report that with reusable technology nearing commercial deployment and new application scenarios continuously emerging (such as space computing), the potential market size (TAM) for commercial space is expected to expand by several orders of magnitude.

The next step for China’s commercial space isn’t just “more rocket launches,” but whether rockets, satellites, solar cells, laser communication, and ground manufacturing systems can be integrated to form a scale-driven cost reduction curve similar to photovoltaic and lithium batteries.

Cost Reduction Curve: Rockets are traveling the road photovoltaic and lithium batteries have gone

In 2019, the launch cost of China’s first private commercial rocket was about $10,000 to $15,000 per kilogram. By 2025, industry leaders have brought this figure down to about $4,000 per kilogram. The cumulative commercial launches are also expected to reach about 95 by 2025.

Calculations show that, assuming industry learning rates remain at 20%-35%, and cumulative launches approach 1,000 by 2030, launch costs could further drop to $900-1,900 per kilogram. The learning rate refers to the percentage decrease in cost whenever total output doubles. Behind these two curves are engineering iterations, local supply chain concentration, and capacity expansion jointly driving progress.

This logic has already been run through once by Chinese manufacturing.

Regression analysis of the cost curves for Chinese photovoltaic modules and lithium batteries shows a learning rate of about 34.9% for PV and 26.2% for lithium batteries.

The underlying logic of commercial space is similar. A crucial foundational condition behind this is the compatibility of China’s manufacturing ecosystem. Space Pioneer’s data shows about 95% of its rocket components can be sourced from suppliers in the automotive, aviation, or machinery industries. Currently, around 30% of suppliers still come from the traditional state-owned space sector—every decrease in this proportion means market-based procurement is increasing, leaving room for further cost reductions.

LandSpace’s reusable test offers another data point: after a first-stage rocket is reused five times, launch costs can drop by up to 45%.

The framework references an analogy: the current state of China’s commercial space supply chain is much like the auto sector 30 years ago—when the first private brand car appeared in 1998, the industry chain wasn’t fully marketized.

Reusability: The single largest cost reduction variable

In the cost reduction path, reusable technology is the most critical element.

For a rocket, the primary stage engine dominates costs—more engines, larger structural mass, making the first stage the most expensive part. If the first stage can be recovered and reused, the cost curve bends sharply.

LandSpace has completed milestone tests for rocket launch and recovery, targeted for Q4 2025. The Long March 12J has also completed related tests at the same time. LandSpace estimates that after five reuses, single launch costs can drop by up to 45%.

The current issue is that China’s reusable technology is still in the validation phase, some distance from mass commercialization. Existing launch capabilities cannot yet support deployment needs exceeding 10,000 tons of payload; key satellite technologies—including power, thermal management, components, transmission, and orbital operations—are also not fully mature.

In the second half of 2026, two important milestones to track: Galactic Energy’s Ceres-1 and i-Space’s Hyperbola-3, both plan maiden flights with recovery attempts.

50,000 Satellites: Constellation construction is just beginning

By Q1 2026, China has about 1,333 satellites in orbit, with remote sensing accounting for 46% and communications 35%.

But according to GW Constellation and Qianfan Constellation's plans, China's long-term goal is to deploy 50,000 satellites—nearly 40 times the current scale.

However, jumping from 1,333 to 50,000, there are three hurdles: reusable rocket technology hasn’t completed commercial validation; existing launch capacity is insufficient for deployment needs exceeding 10,000 tons; core satellite tech such as power, thermal management, and payloads are not mature enough.

The International Telecommunication Union (ITU) frequency orbit rules add a hidden countdown: after filing, at least one satellite must launch within 7 years, 10% completion within 9 years, 50% within 12 years, 100% within 15 years; overdue filings lapse, and final deployment caps at actual launch numbers.

Combined, GW Network and Qianfan Constellation mean over 15,000 satellites must be deployed in the next decade. This means constellation construction cannot move “at a leisurely pace.”

Qianfan Phase I (1,296 satellites) plans to start deployment in 2027. This is the time window when the supply chain feels real order pressure.

Space Computing Power: The next commercial track, but major cost gap remains

Communications, remote sensing, and navigation are three traditional uses of commercial space, but commercialization has never been ideal. Remote sensing mainly relies on government orders; communications faces a domestic market with highly developed 5G infrastructure, limited demand for Direct-to-Cell (DTC) services.

Space computing power is seen as the next path.

The logic is as follows: rapid AI development bottlenecks computing resources, with energy as the core constraint. Satellites placed in sun-synchronous orbit can almost continuously draw solar power, benefit from radiation cooling, and face no ground approval constraints.

In May 2025, China launched its first batch of 12 computing satellites, forming the "Three-Body Computing Constellation" prototype, co-operated by Zhejiang Laboratory and ADA Space. ADA Space (Starlink TT/Chenjing Technology) recently also partnered with Tencent Cloud.

For orbital data centers to truly replace terrestrial centers, two simultaneous conditions are needed: launch costs must fall, and space solar cell costs must drop. Current lowest launch cost is about $3,000/kg, lowest space-grade solar panel cost is about $10,000/kW (P-type HJT). Calculations show to reach parity with ground electricity, both figures need to drop by about 80%.

This is a mid-to-long term path, not an immediate reality.

Closer to immediate commercial value is the "in-orbit space data processing" model—direct onboard processing of satellite imagery, SAR data, etc., reducing the pressure to transfer data to the ground. This route depends less on technological breakthroughs, and its strategic value is already relatively clear.

Where is the supply chain money

As launch cadence accelerates and constellation deployment scales up, demand will transmit along a long manufacturing chain—materials, electronics, thermal management, optical communications, power infrastructure.

Two sub-industries are flagged separately:

Space solar cells are the most certain infrastructure demand. Any large-scale satellite constellation needs power supply. HJT (heterojunction) is currently the most balanced in efficiency, radiation resistance, and cost; perovskite is a long-term technological direction, but orbital lifespan verification is not yet complete. Calculations show that space solar market could reach 100 GW level by 2035.

Laser communication is close to the commercialization stage. Traditional RF communications are limited by spectrum and bandwidth; laser communication’s data rate can reach 100Gbps to 1Tbps, next-generation constellations set 100-200Gbps as standard, 400Gbps has been verified in orbit, and no ITU spectrum filing is needed.

On-orbit services: An easily overlooked cost variable

Design life of LEO satellites is generally 5 to 7 years (Chinese Academy of Sciences data). For computing power satellites with heavy computing equipment, this is a serious economic issue—server rack cost may be ten times launch cost (Google's estimate at $200/kg launch cost).

If satellite life stops at 7 years, the investment return model is hard to break even.

On-orbit refueling and repair is a possible solution. China’s commercial company Emposat recently completed testing of fuel injection using a robotic arm in low Earth orbit—the first Chinese commercial experimental satellite equipped with a flexible robotic arm. US Starfish Space also plans to complete the first commercial service for an Intelsat satellite in 2026.

This direction is still early, but significance lies in: if in-orbit life can be extended beyond 7 years, the commercial model for computing power satellites fundamentally changes.

Analogy to Humanoid Robots: Multi-wave market, not linear growth

Commercial space and humanoid robots share a trait: market potential is huge, but large-scale commercialization remains distant and relies heavily on policy support. Musk envisions 80,000 launches per year, nearly one per hour; a 100 GW orbital data center needs about 1 million satellites.

At that scale, the current industry volume is negligible.

History shows: when the addressable market is large enough and technical feasibility remains credible, industry growth typically experiences multiple upward waves, characterized by high volatility but a long-term upward trend.

But China’s commercial space has its own special features—China’s mature 5G infrastructure reduces urgency for direct-to-cell, power pressure is also less than in the US, so commercial push’s external urgency is slightly below the US.

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