Hyperloop One, the Los Angeles-based startup that aimed to develop the Hyperloop ultra-high-speed transportation system, announced this week that it is shutting down operations. The company said that after over 7 years in business, it was unable to secure enough funding to continue developing its technology.
The shut down marks a major setback for the vision of creating a new form of transportation based on electric propulsion and magnetic levitation in near-vacuum tubes. Proposed by billionaire entrepreneur Elon Musk in 2013, Hyperloop aimed to enable passengers and cargo to travel at airline speeds for the price of a bus ticket.
But despite much hype and over $400 million invested, technical hurdles and questions over safety, cost and practicality were ultimately too much for Hyperloop One to overcome.
Leadership Turmoil
Hyperloop One spent years working to develop its core propulsion technology and build demonstration tracks across the American southwest. But the company was also plagued by leadership turmoil, including a messy co-founder battle in 2016 that ousted Brogan BamBrogan, its popular senior vice president of engineering.
More recently, Hyperloop One’s chief technology officer and co-founder, Josh Giegel, stepped down from his executive roles to transition into a member of the board. Giegel was considered essential to Hyperloop One’s engineering and technological development. His exit signaled that progress was stalling inside the company.
Funding Struggles for Hyperloop One
Despite raising over $400 million in funding over its lifetime, Hyperloop One struggled to secure enough financing to fund the massive costs required to keep researching and developing an operational Hyperloop system.
Investors likely lost patience with the company’s slow pace of tangible technological advancement and lack of committed customers. While cities and regions signed early agreements to explore Hyperloop routes, no contracts or partnerships emerged to build real working Hyperloop connections.
With no revenue being generated and substantial resources needed to conduct further testing and technological refinement, existing investors were apparently unwilling to pour additional billions into the uncertain transportation startup. Hyperloop One’s lead investor, the Virgin Group, said no more money would be forthcoming.
Technical Barriers in Hyperloop One
Hyperloop’s fundamental premise involves transporting passengers in pods or containers that levitate above track rails using magnetic levitation technology. The pods would then be propelled at extremely high speeds by linear electric motors contained inside low-pressure tubes or tunnels.
This technological concept has existed for decades but has never been successfully adapted for large-scale commercial transportation use. Engineering a workable Hyperloop system requires overcoming immense hurdles like managing g-forces on the human body at speeds over 600 mph, mitigating risks like decompression accidents, and finding sustainable ways to maintain near-vacuum conditions across hundreds of miles of tubes.
While Hyperloop One made progress in areas like pod prototyping and motor development, experts believe the company was still far from cracking core technical puzzles to make Hyperloops safe enough for the public. Despite flashy demonstrations of its DevLoop test track and passenger pod in Nevada, the technology remained mostly unproven from an engineering viability standpoint.
Regulatory Uncertainty
Beyond technology, significant regulatory and administrative obstacles also likely dampened investor enthusiasm.
For all of Hyperloop’s claimed advantages over existing modes like rail and aviation, it remained unclear what regulatory standards or oversight would govern real-world Hyperloop operations. No federal or state agency existed to vet and approve technical safety certifications for commercial Hyperloop routes.
The regulatory gray zone surrounding Hyperloops created substantial uncertainty for securing construction permits, operational licenses, insurance policies and liability agreements. With no governance frameworks in place, funding what would have likely been a massively expensive and complex infrastructure project became an even more dubious proposition.
Land Acquisition Challenges
Constructing Hyperloop tubes capable of supporting near supersonic travel speeds would have required obtaining land easement rights across hundreds of miles of continuous terrain. With route options limited predominantly to straight-line paths across undeveloped desert, acquiring the necessary land would have been both economically and logistically challenging.
The costs and legal obstacles associated with securing land for a cross-country Hyperloop network likely gave investors serious qualms. The technical puzzles may have seemed more surmountable than the earthly headaches associated with buying up and clearing vast stretches of private property or protected public lands.
Unproven Economics
Even if Hyperloop One managed to validate its core technologies and secure funds to engineer real systems, doubts persisted whether Hyperloop transportation could ever be economically viable as a mass-transit solution.
Beyond expected massive capital costs required for initial construction, demonstrating ongoing cost-competitiveness with modes like air travel relied on massive passenger volumes from the start. With no proof that consumers would prefer theoretically faster Hyperloop trips to established transportation, investors likely saw the business case as too financially risky relative to existing auto, rail and aviation options.
The potential market for transporting cargo was also questionable given the operational inflexibility of fixed Hyperloop stations and pre-determined route pathways. Logistics companies were potentially unlikely to view Hyperloops as cost or time competitive compared to freight trucks, trains and aircraft routing.
With a weak economic case, investors ultimately refused to continue funding the capital-intensive Hyperloop dream. Until someone solves the core cost equation, the promise of traveling in vacuum tube capsules at 600+ mph is unfortunately now stalled.
Conclusion
After nearly a decade trying to turn Elon Musk’s visionary Hyperloop concept into operational reality, Hyperloop One ultimately collided into technological and commercial dead-ends too steep to keep going.
While core innovations were made in hyper-speed ground transport, mammoth economic, regulatory and infrastructural obstacles persist across all new mode innovation. The sheer complexity of scaling a moonshot like Hyperloop—regardless of its sci-fi appeal—requires overcoming immense financial, political and physical barriers.
For now, the Hyperloop dream lives on only as a theoretically game-changing transit breakthrough that wasn’t ready for pragmatic primetime. Its founder has now pivoted full attention to underground tunnels, electric vehicles and eventually Mars. But inspirationally envisioning the future and incrementally building it remain two vastly different challenges.