SpaceX endured a large fire at its McGregor, Texas site during a test of Starship Version 3 Raptor engines, interrupting a routine qualification step.

The blaze came during the second test of the day at McGregor, following a plume of smoke and an explosion at the test stand, raising questions about the May debut.

Investors and startups have significant exposure to Starship outcomes, with estimates of over $8 billion in space startup investments tied to Starship’s success and its potential to lower launch costs.

The incident adds to the debate over whether upcoming tests will push toward a May launch or reveal further challenges in achieving orbit.

The explosion is not expected to derail Starship V3’s overall launch timeline, as such tests are part of qualification to ensure safety before integration.

Overall, the fire leaves Starship’s May debut contingent on continued testing and risk management, while the broader ecosystem could benefit if costs and reliability improve.

Starship V3 is an upgraded, more powerful version featuring Raptor 3 engines with about 280 tons of thrust, a lighter design, and fewer parts.

The incident occurred during the day's second test, following the initial plume and explosion at the stand.

This event follows a May 2025 Raptor 2 anomaly that destroyed a test stand, underscoring that engine qualification tests are meant to surface problems before flight.

The test comes amid ongoing activities ahead of Starship V3’s anticipated inaugural flight, which has seen multiple schedule shifts and is now aimed at May.

Starship Version 2 last flew in October 2025, and Version 3’s debut has been rescheduled several times, with May as the current target.

SpaceX previously proposed a March window, later moving to April and now May, reflecting ongoing testing and delays.