Toyota just announced plans to make space rockets

Toyota’s recent announcement at CES 2025, where it revealed a $44.4 million investment in Interstellar Technologies, marks a significant pivot for the automotive giant into the space sector.

This move, facilitated through its subsidiary Woven by Toyota, underscores a strategic expansion beyond traditional car manufacturing into space technology.

Key points:

Toyota has invested $44.4 million in Interstellar Technologies, a Japanese space startup, to support rocket mass production, marking its entry into the space sector.
Toyota is exploring space technology, potentially aiding Interstellar’s rocket development, but it’s unclear if Toyota will directly manufacture rockets.
Research suggests this partnership could enhance satellite launches and benefit projects like Toyota Woven City, though controversy exists over car companies entering space.

Toyota, known for its automotive prowess, recently announced a significant move into space technology by investing in Interstellar Technologies.

This investment, revealed at CES 2025, aims to boost rocket production, potentially reshaping the space launch industry.

The Investment Details

Through its subsidiary Woven by Toyota, Toyota has committed approximately $44.4 million to Interstellar Technologies as part of the startup’s Series F funding round.

This partnership focuses on enhancing Interstellar’s ability to mass-produce rockets, leveraging Toyota’s manufacturing and supply chain expertise.

Interstellar is developing the ZERO rocket, capable of launching satellites up to 800 kg into Low Earth Orbit (LEO), which could meet growing demand for small satellite launches.

Potential for Space Exploration

The evidence leans toward Toyota exploring space technology, possibly developing capabilities through this investment.

While Toyota isn’t directly making rockets, its support could lead to innovations in rocket production, making space more accessible.

This move aligns with Japan’s goal of increasing domestic launches to 30 annually by the early 2030s, positioning Toyota as a key player in the global space race.

Impact on Future Projects

Toyota Woven City, a futuristic city near Mount Fuji, may benefit from satellite-based communication enabled by Interstellar’s rockets.

Inspired by SpaceX’s Starlink, Toyota could potentially deploy its own satellite constellation, enhancing connectivity for autonomous vehicles and smart city features. This could redefine mobility beyond Earth, though it’s still speculative.

Background and Partnership Details

On January 6, 2025, Toyota, through Woven by Toyota, announced its investment in Interstellar Technologies, a Japanese private spaceflight company focused on developing rockets for small satellite launches.

The investment, part of Interstellar’s Series F funding round, amounts to approximately ¥7 billion JPY ($44.4 million USD, based on the exchange rate of 1 USD = JPY 158 at the time).

This financial commitment is not a one-off; additional funding is expected in subsequent closes, indicating long-term support.

The partnership aims to revolutionize the space launch industry by boosting Interstellar’s rocket production capabilities.

Interstellar is known for its ZERO rocket, an orbital class launch vehicle with specifications including a height of 32 meters, a diameter of 2.3 meters, and a wet mass of 71 tons.

It uses liquid methane and liquid oxygen as propellants, with a payload capacity of 800 kg to Low Earth Orbit (LEO) and 250 kg to Sun-Synchronous Orbit (SSO).

This rocket is designed to meet the surging demand for small satellite launches, which have increased from 141 in 2016 to 2,860 in 2023, according to industry reports.

Toyota’s role is to leverage its manufacturing expertise, particularly its Toyota Production System (TPS), known for just-in-time production and waste reduction.

This could lead to cost-effective and scalable rocket manufacturing, addressing a critical need in the space industry.

The collaboration also includes Woven by Toyota appointing a director to Interstellar’s board, ensuring strategic alignment and governance support.

Toyota’s Entry into Space: A New Frontier

The announcement at CES 2025, made by Toyota Chairman Akio Toyoda, highlighted the company’s exploration of rockets, stating, “We are exploring rockets too, because the future of mobility shouldn’t be limited to just Earth, or just one car company.”

This suggests Toyota is not merely investing but also considering broader involvement in space technology.

However, it’s important to clarify: Toyota is not directly manufacturing space rockets but is supporting Interstellar’s efforts, which could indirectly position Toyota as a facilitator in rocket production.

This move aligns with Japan’s national space ambitions, which target 30 annual domestic launches by the early 2030s.

Currently, the U.S. leads with 116 launches in 2023, followed by China with 63, while Japan’s successful space voyages remain in the single digits.

Toyota’s investment could help bridge this gap, enhancing Japan’s position in the global space race.

Challenging Industry Assumptions

A common assumption is that only traditional aerospace companies or tech disruptors like SpaceX can succeed in space exploration.

However, Toyota’s entry challenges this notion. The automotive industry brings unique strengths, such as advanced manufacturing processes and supply chain management, which are crucial for scaling rocket production.

For instance, Toyota’s TPS could reduce production costs and lead times, making space launches more affordable and frequent.

This perspective shift is supported by Interstellar CEO Takahiro Inagawa, who stated, “Woven by Toyota, a leader in driving mobility transformation within the Toyota Group, is the ideal partner to help us evolve our rocket production from one-of-a-kind manufacturing to a scalable supply chain.”

This partnership could democratize access to space, making it less exclusive and more competitive, potentially challenging the dominance of players like SpaceX.

The evidence suggests that car manufacturers, with their operational efficiencies, could play a pivotal role in the future of space technology, though controversy exists over whether such diversification is sustainable or dilutes focus from core competencies.

Implications for Toyota Woven City

Toyota Woven City, a prototype futuristic city being developed near Mount Fuji, is another facet of this venture. Construction of Phase 1 was completed in October 2024, with a launch planned for fall 2025 or shortly thereafter.

Located in a mountainous area, Woven City requires robust communication infrastructure to support autonomous vehicles and smart city features.

Satellite-based communication, inspired by SpaceX’s Starlink, could be a solution, and Interstellar’s launch vehicles might facilitate this.

While not explicitly stated in the announcements, it’s plausible that Toyota could deploy its own constellation of satellites, leveraging Interstellar’s rockets.

This would enhance connectivity for Woven City, ensuring seamless operation of its mobility systems.

Chairman Toyoda’s mention of exploring communication network infrastructure for Woven City supports this possibility, though it’s speculative and requires further confirmation.

Market Context and Future Prospects

The space launch market is witnessing exponential growth, driven by the proliferation of small satellites for applications like Earth observation, telecommunications, and internet connectivity.

The U.S. and China dominate with high launch frequencies, but Japan’s market is emerging, with companies like Interstellar aiming to capture a share.

Toyota’s investment could position Interstellar as a competitive player in Asia-Oceania and European markets, especially with the ZERO rocket’s enhanced capacity.

This venture also marks the beginning of Series F funding for Interstellar, with Woven by Toyota leading the first close.

The strategic alliance includes personnel exchanges since 2020, with 11 employees seconded from Toyota, including Toyota Motor Hokkaido, Inc., and Toyota Auto Body Co., Ltd.

This deep integration suggests a long-term commitment to evolving Interstellar’s production from bespoke to mass manufacturing, potentially reducing costs and lead times.

Detailed Partnership Table

To organize the partnership details, consider the following table:

Aspect	Details
Partner	Woven by Toyota, Inc., a Toyota Group company
Announcement Date	January 7, 2025
Investment Amount	Approximately ¥7 billion JPY ($44.3 million USD) by first close of Series F, with additional funding expected
Collaboration Start	Since 2020, through personnel exchanges (11 employees seconded from Toyota)
Focus Areas	Cost reduction, lead time shortening, establishment of mass production system for rockets, strengthening supply chain and corporate governance
Government Target	Japan aims for 30 annual domestic launches by early 2030s
Market Context	Small satellite launches increased from 141 (2016) to 2,860 (2023); U.S. 116 launches, China 63 launches in 2023
Strategic Goal	Leverage Toyota’s production methods for high-quality, cost-effective, scalable rocket manufacturing; vertically integrate rocket and satellite communications business

Statements and Vision

Key statements from leaders underscore the vision. Hajime Kumabe, CEO of Woven by Toyota, emphasized, “Focus on mass production of rockets, aligning with sustainable future through space exploration.”

Takahiro Inagawa, CEO of Interstellar Technologies, added, “Partnership to evolve from one-of-a-kind to scalable rocket production, realizing vision of ‘a future where everyone can access space’.”

Conclusion

Toyota’s foray into space through Interstellar Technologies signifies a bold step towards diversifying its business and contributing to the advancement of space technology.

By combining automotive manufacturing expertise with space launch capabilities, this partnership could redefine how we think about mobility and accessibility in space.

While controversy exists over car companies entering this field, the potential for innovation and market expansion is significant, especially for projects like Woven City and Japan’s space ambitions.