Hyperloop at hyper-speed: Disrupting the transportation sector

Hyperloop at hyper-speed

Hyperloop is more than just a radical new concept. It is a new way of thinking about distance and travel; it is a new approach to transportation.

U.S. Lead Principal - Infrastructure

KPMG in the US


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construction of a hyperloop tube system

When Elon Musk – founder of Tesla Motors, PayPal and SpaceX – posted his idea for a new “fifth mode of transport” in 2013, the transportation sector took note. Musk had already fundamentally disrupted the payments, automotive and space sectors; nobody doubted that his idea could potentially revolutionise the way the world views transportation.

Musk’s expectations for the new system were almost unbelievable; his system would offer immunity from weather, cars that never crash, average speeds twice that of a typical jet, low power requirements and the ability to run 24-hour operations. “The basic concepts are very simple and it’s really a very elegant architecture that creates massive advantages over existing transportation methods,” boasts Rob Lloyd, CEO of Hyperloop One, a company founded expressly to bring Musk’s idea into reality. 

What exactly is Hyperloop?

The basic concept behind Hyperloop (as Musk named the technology) is rather simple. Low-pressure tubes to remove air-drag significantly and allow pressurized capsules to dart great distances at unprecedented speeds using electric motors and air compressors.

Hyperloop One approach is based on four basic concepts. The first is that the system is housed in an enclosed, low-pressure environment which removes air resistance and, in doing so, reduces the energy required to move an object at high speeds. The second concept is that the system is using magnetic levitation, thereby reducing the friction almost entirely and resulting in less wear and tear and maintenance. The third concept is that it uses a linear synchronous motor to propel the vehicles in the tube and the final concept is that smaller ‘pods’ are used to transport people or freight in a packetised and on-demand fashion.

“We will move people and goods at very high speeds, with very little energy, no noise pollution and a very small footprint, all of which gives us something that is ultimately faster, safer, cheaper and greener than other current transportation alternatives,” argues Lloyd.

Believe the hype

Since Musk’s announcement, the Hyperloop concept has been heavy on hype. But if Lloyd’s team is successful, the hype will be extremely well-founded. His group has already proven that the technology is capable of moving people or objects at speeds of up to 1,100 kilometers per hour (approximately 700 miles per hour), crossing from San Fran to LA in just 35 minutes. That’s 15 minutes to go from Manchester to London or from New York to Boston.

“If it took just 15 minutes to get to a major city 300 kilometers away, how would that change the way you interact with that city?” he asks. “When you start to look at transportation based on time rather than distance, you change everything – where you live, where you work, how you manage logistics, how cargo is priced – it will be a truly amazing shift for society.”

While some in the transportation sector may view Hyperloop as a potential disruptor, Lloyd argues that the technology will actually improve the efficiency of existing infrastructure. Imagine, for example, if cargo coming into ports could immediately be shunted to an inland customs clearance facility where land costs are lower and processes more efficient. Or if airports in the same region could move passengers from one airport to the next as if they were moving between terminals.

“Hyperloop is a fifth mode of transport – it doesn’t replace other existing transportation modes, it connects them,” he argues. “We look at it as a new backbone that enables us to connect other infrastructure and transportation systems together in a very cost effective and environmental way.”

The other reason that Hyperloop could be a ‘game changer’ is that – unlike trains and planes that move between terminals – Hyperloop is envisioned as a ‘packetised’ system that goes directly to its intended destination. “The idea is that we move smaller units of cargo and passengers point to point and that’s what is going to make this so disruptive in the end.”

An idea whose time has come

While there were initially many sceptics, the work being conducted by Lloyd’s team and others has turned many into believers. “Investors love it,” coos Lloyd. “And regardless of how hard the technologists try to invalidate the engineering, they can’t – the engineering is certain.”

The company has already raised more than USD100 million in funding from investors eager to see the technology move from concept to full-scale prototype. And they have had expressions of interest from markets in the Middle East, from Russia and from Singapore where the value of being able to ‘leapfrog’ the mature markets with a new technology can be particularly alluring.

The Hyperloop concept is also gaining significant support from the public who seem eager for an alternative to current transportation options. “Traffic is getting worse, airports are at overcapacity, shipping is slow and hard on the environment; it feels like the world is cheering for something new and we believe that Hyperloop is the thing they are cheering for,” says Lloyd, who had served as President of Cisco Systems prior to joining Hyperloop One.   

Creating the right environment

Of course, introducing an entirely new form of transportation into a world ruled by regulation and constrained by incumbent thinking will not be an easy task. “We can’t be regulated by existing regulations that were designed for technologies that are now more than a century old,” argues Lloyd. “I think regulators have both a challenge and an opportunity to create new rules that properly encourage new and emerging modes of transportation.”

Lloyd also acknowledges the cost challenges associated with developing and scaling up a completely new technology with no existing supply chain or ecosystem. But this also presents an opportunity for the group to develop the technology with a systems-based approach rather than a component-based approach. “A systems-based approach will help us reduce the overall cost and will allow us to better integrate new software and hardware more rapidly which is pretty exciting for bureaucrats.” 

Deploying at hyper-speed

Maybe the most amazing thing about Hyperloop is the speed at which the technology is being developed and tested. Lloyd’s organisation is already running tests at their purpose-built Propulsion Open Air Test facility in North Las Vegas and expect to have their full-scale Development Loop Test up and running by 2017. “People think it will take a decade or more to operationalise an idea like this, but we’ll have the first industrial prototypes – moving people and freight – in 2020 and 2021.” 

Lloyd credits the with the organisation’s success and speed to market to the skills, tenacity and experience of his team. Not surprisingly, his organisation attracts some of the world’s top talent who are looking for opportunities to make a real difference in the world around them. On average, the organisation receives upwards of 500 applications for every job they post. 

“We’re hiring some of the world’s brightest minds – people who know how to come up with innovative ideas and have the experience to implement them,” notes Lloyd. “We’re creating a culture of builders rather than theoretical designers.”

Technology is also playing a key role in driving Hyperloop’s rapid development and deployment. Under a blue tent at the company’s Nevada test site, the organisation is currently running what it calls ‘Robot University’ where AI-enabled robots learn unique welding techniques and processes from the organisation’s ‘Master Welder’. Once they have learned their trade, they’ll be brought out to the desert to start working on the new prototype.

“We are finding ways to do things differently, to design, test and build much faster than anyone would have anticipated,” Lloyd notes. “Linear development cycles may have made sense when engineers were improving old technologies, but we need to move much faster and learn lessons much more rapidly than before.”

Get ready to think differently

While some questions may still remain about the application and cost of the new technology, what is already very clear is that Hyperloop is more than just a radical new concept. It is a new way of thinking about distance and travel; it is a new approach to transportation; and it is a demonstration that new ideas can be rapidly tested and deployed when the right minds and effort are put behind it.



KPMG's team of infrastructure professionals advise on designing, executing and managing major infrastructure projects and transactions.

Transport & Logistics

Transport & Logistics

KPMG can advise both public and privately owned transport groups on strategy, planning, regulations, costs and compliance requirements.

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