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Businesses China The Almighty Buck

Two US Hyperloop Startups Line Up Financing From China (bloomberg.com) 117

Los Angeles startups Arrivo and Hyperloop Transportation Technologies have reportedly secured financing from Chinese state-backed companies. "Lining up potential funding helps solve one of the biggest obstacles for hyperloop systems: They will be extremely expensive to build," reports Bloomberg. From the report: Arrivo, founded by a former senior engineer at Elon Musk's Space Exploration Technologies Corp., said it secured a $1 billion credit line with Genertec America Inc., a subsidiary of a Chinese state-owned entity based in Beijing that has helped finance and build high-speed rail and other infrastructure projects in Iran, Turkey and elsewhere. The credit line will go to backers of a future project using Arrivo technology, not to the startup itself. [The Genertec debt could be used to construct a project using the company's technology anywhere in the world, not necessarily in China.] Separately, Hyperloop Transportation Technologies said it plans to work on a 10-kilometer test track in Tongren, part of China's Guizhou province, at an initial cost of about $300 million. State entity Tongren Transportation & Tourism Investment Group will provide half the funds and seek private investors for the other half, HyperloopTT said. The precise route is yet to be determined.
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Two US Hyperloop Startups Line Up Financing From China

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  • by Anonymous Coward

    Why on earth would the intelligent Chinese risk such an investment in that shithole? Guess they must have hedged it with the Saudi Arabians and consider Trump's treason with Russia a positive sign. Not all deals are good deals trumptard.

    • Re:What a risk. (Score:4, Insightful)

      by hey! ( 33014 ) on Friday July 20, 2018 @08:08AM (#56979628) Homepage Journal

      First of all, this is credit, not investment. It's a different game, because if things go belly up as creditor you're at the head of the line to be repaid; as an owner you're at the tail. I've seen deals where creditors moved in, took over IP and other assets put up as collateral, and started up successful companies without the debt burden the technology's creators were operating under. Unless the other investors or owners can come up with a huge bag of cash immediately, they end up with nothing.

      If you've got deep enough pockets, being the largest creditor could be a better way to obtain the fruits of a startup's labor than buying an ownership position.

      Also, even if this were taking an ownership stake in the company, China as a nation with 1/5 of a world's population is in a different position than an individual investor, who should be focused on future profits. China is playing a minimax strategy where the payoff is national power, not money. An individual who invests out of fears of "missing out" is being irrational; a nation may be choosing to hedge its bets in a very different game. And as a sovereign state China can simply do things that would be illegal for an individual, so the rules of the game it's playing look very different.

  • by Build6 ( 164888 ) on Friday July 20, 2018 @05:47AM (#56979226)

    Does anyone remember the "elevated bus" project, which was supposed to drive on existing roads "over" existing traffic? That turned out to be an investment scam ( https://www.wired.co.uk/articl... [wired.co.uk] ). The key element is something "futuristic/high technology" that (and this is the main element here) involves raising a lot of money. Once that is done it's already a success, they don't actually have to do more than make some kind of show of building something.

    I don't think hyper loops are real-world feasible. Even if the technology works, any aggrieved destructive fool - and these exist everywhere in the world, China included - can put the entire system at risk in a way that aircraft are not threatened by. It's easier to guard an airport in such a way that man-portable missiles are out of range of aircraft taking off/landing, than it is to guard the entire length of some long-distance piped network that basically needs to maintain vacuum sealing in its entirety. "Normal" high speed rail is going to be less dangerous/easier to guard than hyper loops, unless they are going to bury the entire thing underground, which will drive costs up, which makes aircraft more competitive.

    One thing about design that gets overlooked is, you don't just look at "is it good if it works?", you also need to look at "what happens when something goes wrong?". There are more failure modes for hyper loops where "everybody dies" than there are for aircraft and trains. Even if it exists, you're going to be taking a much greater risk getting in one than alternative transportation methods.

    • I am sure the engineering is feasible. And I even believe it can be made safe. I think the main problem will be cost effectiveness.

      A high speed train can plausibly carry 800-1000 people and leave every 3 minutes. A hyperloop pod - they're planning one every 30 seconds (so 6 times the rate) but that seems optimistic, and the capacity is still nowhere near as high.
      • A high speed train can not leave every 3 minutes.
        No railway station has enough rails for that.
        And the distance between two trains on the same track is minimum 30 minutes.

        • A train every 3 minutes is the proposal for the UK's HS2.

          I have no idea why you'd need 30 minute spacing. Which railways lines have that requirement? That would only be needed if the stopping distance was 100-200km.
          • I believe TGVs as well as the German ICEs try to have the trains in 30 minutes gaps. The point is potential delays in communications. E.g. if a train has to stop, and it takes more than 10 minutes to inform the next train or signaling centers, there might be trouble.
            The rails are actually split into sections, that don't allow a second train into the section as long as the previous one is still inside. But nevertheless there is a time gap. I googled a bit but don't find a reliable info.

    • by ljw1004 ( 764174 )

      I don't think hyper loops are real-world feasible. Even if the technology works, any aggrieved destructive fool - and these exist everywhere in the world, China included - can put the entire system at risk in a way that aircraft are not threatened by. It's easier to guard an airport in such a way that man-portable missiles are out of range of aircraft taking off/landing, than it is to guard the entire length of some long-distance piped network that basically needs to maintain vacuum sealing in its entirety.

      Did you just disprove the existence of oil pipelines?

      • Comment removed based on user account deletion
        • by Rei ( 128717 )

          And oil pipelines don't need to maintain near vacuums and if one leaks it's a minor environmental issue, not a slaughter.

          Oil pipelines have to bear far greater masses, with far greater pumping loads, with much more complicated thermal regulation. A leak isn't a "minor environmental issue", it can get you hit with millions, tens of millions, or even hundreds of millions of dollars in fines and cleanup costs, depending on the severity. And a bullet-sized hole in a Hyperloop tube (by the way, good luck shoot

          • by Build6 ( 164888 )

            (1) Oil pipelines do not have to maintain a vacuum internally. Maintaining a vacuum is non-trivial (for example, see large hadron collider).

            (2) Oil pipelines are much smaller than what a hyper loop will need to be, unless part of the plan involves figuring out how to liquefy the passengers and then reassemble them later. The Alaska pipeline diameter is IIRC about 4 feet in diameter. Engineering-wise, would scaling up involve only linear increases in stresses and requirements?

            (3) When an oil pipeline is b

            • by Rei ( 128717 )

              Maintaining a vacuum is non-trivial (for example, see large hadron collider).

              Yeah, what's 10 orders of magnitude difference in the degree of vacuum? ;)

              The pumps used to move oil are a lot larger and higher power than the pumps you'd need to maintain 0,001 ATM, I guarantee you.

              Oil pipelines are much smaller than what a hyper loop will need to be

              On average, yes. But their net weights with the oil are much greater.

              3) Your premise is false (see #4)

              4) Your premise is false (a "puncture" does not destroy a vacuu

        • Natural gas pipelines are under pressure. About 200 atmospheres.
          A hyperloop is under negative pressure of .... one atmosphere.

          A no brainer .... so: vacuum is completely irrelevant.

    • I don't think hyper loops are real-world feasible. Even if the technology works, any aggrieved destructive fool - and these exist everywhere in the world, China included - can put the entire system at risk in a way that aircraft are not threatened by.

      You could say the same thing about trains but your point is a fair one. That's probably not the major obstacle in my opinion. The major obstacle is probably just economics. It's a technically complicated (thus expensive) system and it's not at all clear that it can be made and operated for a cost competitive with alternative means of transportation. I think it's an interesting idea but I just have a hard time imagining it being an economically practical one even if the technology is feasible.

      Interesting

      • Yes. It would definitely make more sense to build a Hyperloop on Mars rather than on Earth.
      • Interestingly hyperloop might make a lot more sense on Mars which is where Elon's ambitions lie anyway. Not much atmosphere to get in the way so the pumping costs are lower plus you would actually want protection from dust and other features. Flying isn't really an option and traditional trains probably would be problematic. So while it might not make sense here on Earth in the face of economically proven competitors, it might actually make sense elsewhere in the solar system if/when we ever get there.

        And the problem is how could we transfer or find materials to build one in Mars, let alone find a practical way to build a colony there? I guess in theory, it makes sense. In practice, there are many other issues involved (aside the technology) that would make things impossible...

        • And the problem is how could we transfer or find materials to build one in Mars, let alone find a practical way to build a colony there?

          Quite right but that's a separate issue for the distant future. We would have to have considerable infrastructure on Mars to make building a hyperloop system worth worrying about. If we are that built up then chances are we are doing manufacturing on Mars and tapping into the raw materials available on the planet. We're certainly not going to transport the materials from Earth for something like that.

          I guess in theory, it makes sense. In practice, there are many other issues involved (aside the technology) that would make things impossible...

          Of course. I'm talking very broad brush theoretical stuff here. The problem is that on Earth it's a lot

    • It's easier to guard an airport in such a way that man-portable missiles are out of range of aircraft taking off/landing,
      Such missiles have a range of about 25km and more.
      So: no, it is not possible to guard an airport against them.

  • by Anonymous Coward

    This nonsense is neither feasible nor safe. It's amazing how often some people ignore basic physics.

  • Americans are WAY too attached to their cars.

    So why are people dumping money down this bottomless pit?

    Oh yeah. Shiny new snake oil!

  • Got to give Chinese gov credit. They are basically buying companies technology for nothing. That 1B credit for Arrivo will require that all the work be done in China. As such, they will have fully access to the tech and will be spread around the nation.
    Hopefully, the boring company will not be so stupid.

    The other ones that are foolish are the airplane companies that are NOT getting into this. Boeing and Airbus should be all over this. But any builder of pressurized aircraft should be working with Musk

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