Relationship Status Complicated? Hyperloop And Western Democracies

In an interview with Business Insider from July 2018, HyperloopTT co-founder and ex-CEO Dirk Ahlborn made a remarkable statement on the prospects of the hyperloop: “Let’s put it this way: Democracy isn’t friendly to these kinds of things [….]. If you want to do this in the US, you have tedious right-of-way issues. In China or Russia, however, all it takes is someone powerful to decide that they want it, and it happens”. Two years later, he made similarly pessimistic remarks on hyperloop’s future in Europe, stating that he expected hyperloop to make its break in a place where it has the support of a technology-enthused almighty regime.

Sounds disenchanting, right? But, instead of dropping our shoulders, let’s rather look at this from a few different angles.

What a fascinating notion it is. Going from San Francisco to LA in as little as 35 minutes -conveniently, safely, and free of emissions. This vision outlined by none other than Elon Musk is what piqued the world’s interest when he published his famous whitepaper in 2013. Since then, well over 100 different teams from around the world have participated in his hyperloop competition and several companies have formed including Ahlborn’s HyperloopTT, Virgin Hyperloop or leading European companies like Hardt Hyperloop or Zeleros.

And, progress has been made, on both sides of the pond.

On November 9, 2020, on a 500 m test track in Nevada, Virgin Hyperloop’s CEO Josh Giegel and his Head of Passenger Experience, Sara Luchian, successfully concluded the first ever hyperloop passenger ride. One crucial effect of this has to do with psychology: millions of people have watched Giegel and Luchian step in and out of the pod happy and unharmed – ca. 2.9 million via the official YouTube video alone. People are the sum of their experiences and fear what they don’t know. Thus, in terms of raising public awareness and trust, investors included, this inaugural ride may mark a turning point.

Also, European contenders are pushing hard to bring hyperloop to the attention of the masses and dispel doubts over technical feasibility, practical applicability, or security.

In the Netherlands, Hardt Hyperloop, who have developed a lane switching technology, is centrally involved in constructing the European Hyperloop Center (EHC), located in Groningen which will feature a 2.6 km test track. Another start-up, Valencia-based Zeleros Hyperloop recently raised 7M€ to develop a 3 km test track – the longest in Europe. When the EHC and Zeleros’ testing facility open their doors in 2022 (EHC) and 2025 (Zeleros) respectively, they can hopefully further boost European stakeholders’ trust and funding for the system.

Speaking of trust. Another very significant, yet not quite as publicly visible event occurred a few months prior to Virgin Hyperloop’s passenger “maiden voyage”. Namely, Munich Re declared hyperloop insurable. For an undertaking of that magnitude getting the quality seal of the world’s largest reinsurer could prove invaluable.

However, several hurdles still remain.

In terms of government funding and regulation, the next few weeks and months could prove decisive.

As the COVID-19 pandemic continues to drag on and converge with the global climate crisis, governments in the US and Europe are putting together their plans to build back a better future. Quite remarkably, the Biden administration’s USD 1,2 trillion bipartisan infrastructure agreement has not only acknowledged but codified its support of hyperloop. If the package passes the House, which is far from certain, US-based hyperloop projects will be eligible for federal funding.

In Europe there have also been positive developments. In December 2020, the European Union released its Sustainable and Smart Mobility Strategy. Hyperloop was explicitly identified as a game-changing mobility technology. Together, the EU Commission’s Directorate-General for Mobility and Transport (DG MOVE) and hyperloop companies are sitting at the table to develop the crucial blocks for a hyperloop system. Moreover, hyperloop companies from the EU and Canada, Zeleros and Hardt included, have formed a joint technical committee called JTC 20 to establish a framework of common standards across Europe. This framework shall ensure interoperability between different hyperloop solutions, seamless cross-border travel, and the highest safety standards.

In addition to interoperability between the solutions, it is also important that hyperloop is positioned as a complementary solution to other transport modes, such as rail, road, and air, to get its “feet off the ground”. A logical and practical focus for the initial rollout is to go cargo first. Cargo transport comes with less regulatory and safety hurdles and leverages the standardization of the containers.

In both North America and Europe, demand for consumer goods, has massively spiked in the pandemic. At the same time, consumers expectations continue to increase. Today, acceptable delivery times range between 1h (perishable goods) and 48h (everything else). At the same time, the lockdowns caused by the pandemic have seriously disrupted global supply chains. One of the symptoms is a large-scale shipping crisis, with sky rocketing container prices and major delays. This is where hyperloop could come in and complement existing solutions.

In Europe, there are several hyperloop projects underway to strengthen and support efficient and sustainable logistics networks – relieving bottlenecks at ports, on highways and in the air while reinforcing regional supply chains.

In Hamburg, the shipping port authority HHLA, together with 40 partners worldwide and HyperloopTT have recently presented their vision of the so called HyperPort. In this plan, the hyperloop would be used to ship containers to logistics hubs. In the case of Berlin, it would reduce the 170-mile travel from 4 hours (truck) to ca. 20 minutes. But even more important than the time savings is the cargo throughput, where the aim is to reach 2800 containers/day with the lowest energy consumption and environmental impact.

Not far away, in the Netherlands, a broad coalition of public and private players including Hardt Hyperloop, as well as companies involved in the Netherlands’ export industries are moving forward to lay the groundwork for a cargo loop (hyperloop for freight). The focus is on the highly travelled freight corridor from Amsterdam to Rotterdam. A feasibility study shall be released in 2022, and if positive, it will be a significant first step toward a pan-European hyperloop logistics network.

If successful, the freight-based use-cases will help open the door for hyperloop to realize even a grander vision.

Another important and fascinating use-case is the idea to develop entirely new connected economic zones – by facilitating a free flow of people and culture. Alan James, Partner at Expert Alliance, describes it as a “supercity economy”. The former VP Worldwide Business Development at Hyperloop One (now Virgin Hyperloop) explains what this might look like in the Northern region of the UK. Traversing from Liverpool to Glasgow is 545 km and connects important cities along the way such as Manchester, Leeds, Newcastle, and Edinburgh. The hyperloop solution could allow for the entire stretch to be done in less than 1 hour, and essentially create one large supercity.

Likewise in the US the potential exists and would relieve the over-reliance on cars and poor railway networks.

A recent study conducted by The Mid-Ohio Regional Planning Commission (MORPC) found that a hyperloop connection between Columbus, Chicago, and Pittsburgh could create $300 billion in overall economic benefits. Plus, remove 1.9 billion cars and 450 million trucks from the streets, resulting in 2.4 million tons of CO2 savings in the next 30 years. Today, Chicago to Columbus is a 6-hour drive, but with hyperloop it could be less than 45 minutes and an estimated ticket cost of $60.

The idea to create and connect economic zones could fundamentally change how and where we live, work, and do business. It could help to relieve some of the growing divisions between rich urban areas, primarily in coastal regions, and those which over the past decades have continuously been decoupled from prosperity and economic growth.

Going back to Ahlborn’s prediction, other parts of the world are taking bold steps to realize a fait accompli.

In 2018, the HyperloopTT signed a contract with Aldar properties to build a commercial pilot track between Abu Dhabi and Dubai. A first part was supposed to be operational in time for Dubai Expo 2020 which due to COVID-19 had to be postponed to early 2022.

Also in Dubai, Virgin Hyperloop, has begun forging business relationships in the logistics space. Building a joint venture with DP World, the partners envision a connected logistics system utilizing not only hyperloop, but also incorporating existing modes of transport to deliver goods anywhere in the world in less than 48 hours, while also reducing warehouse space by 25%.

In China, similarly ambitious projects are underway. In May 2020, HyperloopTT announced it would build the country’s first hyperloop system in the state of Guizhou. Starting off with a 10 km track in the city of Tongren, then becoming a key enabling technology for the country’s Belt and Road initiative.

These examples show that the race to develop the first commercial hyperloop has begun, not only between companies but between countries, political systems, entire world regions and economic zones. Thus, it would be naïve to assume that this race has no geostrategic dimension. The next few years will show if the US and Europe will lead or lag behind.

Clearly, hyperloop still has its detractors. Researchers like Ingo Hansen of the University of Delft point out key issues such as low seating capacity, potentially high construction costs, and the lack of a comprehensive analysis on energy consumption and related greenhouse gas emissions. These open questions require more in-depth and independent research based on real-world data.

But what is certain: if only a fraction of the hyperloop visions is to become a reality anytime soon in the US and Europe, the planning needs to start now. As Alan James quite rightly puts it, “committing doesn’t mean spending billions on day one”. However, the recent progress made should be sufficient to unleash significant public and private investments to accelerate the implementation of commercial pilots. Looking at the upside potentials, the guiding question should be – can the US and Europe afford NOT to have a hyperloop?