"Forbes" recently announced a list of the richest people with the most wealth growth in 2023. Among them, Tesla CEO Musk ranked first with an increase of US$108.4 billion in 2023. His current net worth is US$254.9 billion, making him the most profitable person in the world. But not everything is going as planned for Musk. According to reports, Musk’s hyperloop startup HyperloopOne is about to close due to failure to obtain any operational hyperloop contract. Building high-speed rail is also an old dream in the United States that has been repeatedly broken.

"Hyperloop" collapses

HyperloopOne has been a high-profile startup since Musk proposed the concept of hyperloop. Since its founding in 2014, the high-profile startup has raised more than $450 million and built a test track near Las Vegas. In 2020, the company conducted its first and only manned test, but it only reached a top speed of 100 miles per hour, well below its target.

At the beginning of 2022, the company had more than 200 employees. Now, the company only has a small team responsible for asset sales, and their contracts will end on December 31 this year. According to people familiar with the matter, the company HyperloopOne is facing bankruptcy. The company has laid off most of its employees and is trying to sell remaining assets, including test tracks and machinery, and has also closed its Los Angeles office.

In 2013, Musk released a hyperloop white paper called "alphapaper", hoping to transport passengers or goods at a speed of 760 miles (1,223 kilometers) per hour through vacuum tubes, completely solving problems such as traffic congestion, and causing a sensation in the market.

His idea was to have an aerodynamically designed aluminum capsule running in a near-vacuum tube. These tubes can be elevated in the sky or buried underground, and can be built within or between cities, a concept he calls the "fifth mode of transportation."

According to Musk's vision, in a hyperloop system that uses magnetic levitation to achieve near-silent travel, the trip between New York and Washington would only take 30 minutes, twice as fast as a commercial jet and four times faster than a high-speed train.

However, after years of efforts, a large-scale hyperloop has still not been built. As one of the largest hyperloop companies, HyperloopOne's collapse means the end of Musk's hyperloop dream. Critics say that while Hyperloop may be technically feasible, it's still just steam software. This has been called a "utopian vision" and is economically impossible to achieve.

Projects keep stalling

Although Musk failed, the concept still attracts interest from entrepreneurs. Currently, several companies, including HardtHyperloop, Hyperloop Transport Technologies and Swisspod Technologies, are in various stages of building prototype vehicles. In addition, Dubai-based DPWorld Group has been a major investor in Hyperloop One and holds a majority stake. People familiar with the matter revealed that the company's remaining intellectual property will be transferred to DPWorld.

As the world's largest economy, the United States has been planning for decades, but there is no high-speed rail in the country, let alone a "hyperloop". According to the "Voice of America" ​​website, when Eurasian countries rushed into the high-speed rail era ten years ago, the first high-speed rail project in the United States began to be constructed. In 2015, China and the United States announced that they would cooperate in building the Western Express High-Speed ​​Railway in the United States, but the project was unilaterally terminated by the United States the following year.

In 2008, when the famous movie star Schwarzenegger was the governor of California, he launched the California high-speed rail plan, planning to shorten the trip from San Francisco to Los Angeles to two and a half hours. This plan, which seemed ambitious at the time, was implemented by Brown, the later governor of California, and supported by a US$3.5 billion federal grant from former US President Obama.

However, the U.S. high-speed rail dream was shattered when current California Governor Newsom first came to power in 2019. Newsom’s reasons for “stopping” the plan were that it was expensive, time-consuming, and lacked supervision. The Los Angeles Times commented that abandoning the project would be a tragic mistake for California, the United States and the world, because high-speed rail has important social and economic value in environmental protection, regional interconnection, and alleviation of traffic pressure.

According to Bai Wenxi, chief economist of IPG China, there are many reasons why high-speed rail in the United States has always been difficult to implement. First of all, the aviation and highway systems in the United States are extremely developed, and the demand for passenger high-speed rail is not strong enough. It is naturally difficult to establish a project that lacks sufficient market support. Secondly, the decision-making process of the U.S. public budget system is complex, and it is difficult for the interests of all parties to reach consensus quickly. In addition, land in the United States is privately owned, and acquiring land for infrastructure construction is costly, time-consuming, and complicated. Moreover, the emergence of new business formats has affected the pie of the original transportation business, and the opposition of industry associations in the original business format has restricted the market implementation of the new business format.

Completion in 2028?

The United States has also been working hard to build high-speed rail. The White House official website recently announced that the Biden administration has announced that it will provide US$8.2 billion for the construction of 10 major passenger rail projects in the United States, including the first high-speed rail project in the United States. According to the plan, the high-speed rail line will connect Los Angeles and Las Vegas. The 218-mile (approximately 351 kilometers) journey takes 2 hours and 10 minutes, has a top speed of 321 kilometers per hour, and is expected to transport 11 million passengers every year.

The project, called the "Bright West Line", will be constructed and later operated by the U.S. private railway company "Bright Line" and can receive $3 billion in federal funding support. Agence France-Presse said that during a previous trip to Las Vegas, Biden, who has a "train complex", said, "We are building the first high-speed rail line in American history. It starts here." According to Biden's vision, the first high-speed rail in the United States will be completed in 2028 and put into use before the Los Angeles Olympics that year.

The United States' plan to rebuild high-speed rail has attracted the attention of overseas companies. "Two European companies are competing for train orders worth US$12 billion, hoping to eventually make a fortune on U.S. high-speed railways." According to reports, Germany's Siemens and France's Alstom are lobbying U.S. lawmakers and the Biden administration to compete for the opportunity to supply high-speed EMUs and passenger carriages for the "Guangming West Line" trains.

Regarding the plan proposed by Biden, Liu Weidong, a researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, said that railway projects in the United States are financed and implemented by private companies, and profits are their priority. However, there is no immediate profit temptation for high-speed rail projects, so private companies are generally unwilling to invest in infrastructure construction, and the state must inject funds. On the other hand, the high-speed rail plan has been involved in various fierce controversies since the first day it was proposed. With the general election coming next year, politicians use this project as a tool to win votes or defeat their opponents.

Siemens, Alstom and other train manufacturers have long established manufacturing centers in the United States to produce and overhaul intercity, commuter and rail transit vehicles. Despite the U.S. government's efforts to stimulate the development of the high-speed rail industry, the prospects for true high-speed rail service in the United States remain slim.

Beijing Business Daily reporter Fang Binnan Zhao Tianshu