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Does Virgin’s Sale of its Stake in Hyperloop One Signal the Death Knell for this Technology?

Reports suggest that Sir Richard Branson and Virgin have opted to sell their modest stake in Elon Musk’s Hyperloop One project. In 2017, Virgin and Branson secured a minor shareholding in Hyperloop One, securing its rebranding as Virgin Hyperloop One. However, the firm has opted divest its equity and remove its branding from the project, as the project’s leaders have shifted their “short-term priorities”. Virgin has therefore opted to move its own priorities as a result. It’s working hard to breathe new life into its ailing transatlantic airline and it’s also battling to cement its place in the UK iGaming sector, where its Virgin Bet brand has launched one of the most competitive bonuses for first-time customers in Britain.

A spokesman for Virgin Group said one of the main reasons it was pulling out from the project was the shift in Hyperloop One’s business plan. Initially, it was looking at delivering high-speed transport for passengers, although more recently this has been distilled into cargo-only transport.

What is Hyperloop Technology?

Hyperloop was the concept pioneered by Elon Musk as early as 2013. It was marketed as a next-generation form of ground transport that would change the game moving people from city to city – and potentially from country to country. It’s hoped that hyperloop technology could move passengers at speeds of over 700 miles per hour – faster than the typical cruising airspeed of a commercial aircraft.

Hyperloop differs to conventional railway networks in that the hyperloop ‘pods’ do not interact with a railway. Instead, they hover in the hyperloop tube or tunnel on ‘air skis’. In essence, the pods would move like an old-school air hockey puck, with minimal friction due to magnetic levitation.

The excitement surrounding hyperloop technology was its game-changing ability to transfer people in a cheaper, quicker and greener way than vehicles and high-speed railways. Hyperloop technology would be most beneficial in built-up urban areas like major cities during rush-hour, with pods able to transport people during peak times for daily commutes, thereby keeping more vehicles off the road and driving down CO2 emissions.

It’s also felt that hyperloop could make cities and countries feel more closely connected, bringing mutual economic benefits.

The theory behind hyperloop may have been inspired somewhat by the Crystal Palace pneumatic railway attempted in London during the mid-19th century. Powered by air pressure and a vacuum to drag it back downwards, this railway was able to send wagons uphill efficiently during Victorian times.

So, why is Hyperloop One changing tack?

Hyperloop One has raised north of £350m to underpin its technology, although its decision to move away from passenger-focused travel to cargo transport has seen the firm axe over 100 members of its workforce. It’s a sign that the ambition of welcoming passengers is simply unrealistic in the current financial climate. A possible global recession would likely put paid to ‘big-ticket’ projects such as this. Furthermore, there is not a single functional hyperloop in operation since Musk’s original proposal. A test track was constructed on the outskirts of Las Vegas at a cost of £439m, while a prototype of a hyperloop pod has long been on show at Musk’s SpaceX headquarters in California.

Another big question mark for hyperloop technology is passenger comfort. Many critics of Hyperloop One insist that travelling in one of its pods would be a vomit-inducing experience, with intense lateral G-force when moving around bends in the route. At the time of those criticisms, Hyperloop One’s figureheads insisted a journey would feel no different to standing in a lift or a commercial jet. However, as yet, they haven’t been able to allay those fears for it to become a viable alternative to high-speed rail.

Hyperloop One’s best chance of long-term success and commercial viability is to use cargo transport as a use case for hyperloop technology. Only then might they be able to convince fence-sitters that its mode of transport has legs (or skis) for the general public.