Trained as an engineer with a background in designing and building racing cars, Hugo Spowers combined his expertise in systems integration with his interest in sustainability and the environment by creating Riversimple, the only independent hydrogen car startup in Europe. As the company’s founder and chief engineer, Hugo and his team are not only promoting the expansion of zero-emissions hydrogen vehicles, they are also developing a new pay-per-use model that is poised to democratize access to cars and optimize the auto industry from the supply chain to distribution. At the center of the company’s unique model is the Rasa prototype, an innovative hydrogen car designed to offer maximum performance and unmatched resource efficiency. We caught up with Hugo to learn more about the future of green mobility according to Riversimple.
"If you look at the history of technology disruption, it is always new entities that emerge to pioneer genuinely disruptive technology."
I realised that fuel cell technology is viable here and now, technically and commercially, but only if we build cars in a completely different way: we cannot simply put hydrogen into cars that have been optimised around combustion engines for a hundred years. I also realised that the breakthrough would come at the systems level, through systems integration, which played to my background in motor racing. Moreover, the main barriers to hydrogen technology came largely from politics and business inertia. But if you look at the history of technology disruption, it is always new entities that emerge to pioneer genuinely disruptive technology. I set up Riversimple to pursue this goal. Designed to align the interests of all stakeholders, our business model is organised around selling a service, not a product. Since the car is a revenue generating asset on our balance sheet, our interests are longevity and low running costs, which align with the interests of our customers and the planet. If you sell cars, you are rewarded for maximising resource consumption, but since we sell a service, we design our car for maximum recovery of value, and we are rewarded for resource conservation. I don’t believe we can build a sustainable industrial system based on rewarding industry for doing the opposite of what we are trying to achieve. That is why the architecture of the business is just as important as the technology.
In the UK, between 3 and 5 million cars never leave a 40-mile radius, so our service targets that use pattern. The reason for choosing this target is that disruptive new technology always has weaknesses compared with the incumbent technology. For hydrogen cars, that weakness is infrastructure. To launch a motorway capable car like the Toyota Mirai, you need to have around 300 filling stations in the UK. This is the chicken-or-egg question that everybody talks about. However, targeting the local vehicle niche brings the critical scale of infrastructure down from 300 fillings stations to just one. For example, the 25-mile radius around Oxford provides a large catchment area of people who fit our target use pattern, which gives us a small but genuinely commercial market. If one filling station is installed in Oxford and we deliver 50 hydrogen cars, it has 50 captive customers from day one. That builds a standalone business case for investing in that filling station, which is independent of the business case for investing in another 300 filling stations. It doesn’t depend on them to be viable. You can then expand the market one filling station at a time until you reach a nationwide network, at which point you can launch motorway capable cars.
"Since we pay all the operating costs, we’ve also designed it to minimise these costs, including energy consumption."
Our car does the equivalent of 250 miles to the gallon, or about 1.2 liters per 100 kilometers. We can achieve this performance partly because of our business model. We are not selling a car, we are selling mileage. Since we pay all the operating costs, we’ve also designed it to minimise these costs, including energy consumption, so it justifies investing in efficiency; the business model makes efficiency profitable. Furthermore, since we know that we will own the car through its entire service life, we’ve designed it for maximum recovery of value at the end of life, by recovering materials and refurbishing components. Unlike the traditional auto industry, we want our car to last as long as possible, so we can extend its operating life and our revenue stream. This goal profoundly affects all the design choices we make.
"Hydrogen and battery vehicles are very different technologies and we need them both. After all, we don’t ask if it is going to be solar or wind that wins the renewable energy race."
Hydrogen and battery vehicles are very different technologies and we need them both. After all, we don’t ask if it is going to be solar or wind that wins the renewable energy race. Battery vehicles offer two main advantages: high powertrain efficiency and grid stabilisation by trickle charging overnight. However, I’m interested in vehicle efficiency, which also depends on weight. As you build a battery vehicle for longer range, it quickly becomes very heavy, meaning vehicle efficiency falls off a cliff. We believe we can make a more efficient hydrogen vehicle for a range of 150-200 miles and hydrogen is much more efficient than batteries for trips over 300 miles. This is where there is a role for hydrogen, which I don’t believe electric vehicles can match. For instance, the Tesla battery weighs more than our car, so it’s a very heavy and inefficient vehicle. Furthermore, that long-range application only works if you can fast charge during long journeys, which puts a spike on the power grid in the middle of the day. That means you have already lost both the advantages of a battery car: it is no longer efficient and you are destabilising the grid instead of stabilising it. There is no way battery cars can deliver the long range we are used to travelling and that many people need either cost effectively or energy efficiently. We often hear that 80% of journeys are less than 20 miles, but people forget that 80% of miles are travelled in the remaining 20% of journeys. I believe hydrogen vehicles are much better suited to these high-mileage journeys. While it is true that battery vehicles offer powertrain efficiency, I think it’s a sleight of hand to conflate that with vehicle efficiency.
"Typically, the auto industry does not let customers near a car until it is ready for production. But for us, we wanted to take a much more dynamic, interactive process with our customers."
We built the blue prototype three years ago, and we just started a production run of 20 vehicles. These are hand-built vehicles, so they cost a lot to make. But we are aiming to have a productionised version of the car ready by the end of 2021. In the meantime, starting this summer, we are conducting a beta test with customers, including 5 public sector bodies, 2 car sharing clubs and 280 retail customers. We will instrument their everyday cars for a month before they take one of ours, which will provide a benchmark for analysing the change in behaviour when they use our cars. Not only are we testing the technology, but we are also gathering customer feedback about value for money and our offer. This is a new model for delivering car usership to customers, so we need to work hard to refine our service. We plan to co-develop the production version of the vehicle with our customers. Typically, the auto industry does not let customers near a car until it is ready for production. But for us, we wanted to take a much more dynamic, interactive process with our customers.
"We may be the only car company in the world who thinks there are far too many cars on the planet."
Our company was founded with an environmental agenda. It is hardwired into our business, corporate governance and articles of association. We may be the only car company in the world who thinks there are far too many cars on the planet. At the same time, we do not believe that eliminating cars is the answer. We want to provide cars through a business model that profits from what society wants. The most important change we need is for efficiency to become profitable, for sustainability to become profitable, and that’s what our business model aims to achieve by selling miles, not cars. I think our model will have a big impact on access to cars. Our cars will remain reliable as they age, and even become less expensive. Buying a 10-year-old car carries a huge risk of component failure that costs more than the value of the car. In addition, these risks weigh on those in society who are least able to afford them. In our case, a 10-year-old car will be just as reliable as a new one, because otherwise we wouldn’t supply it to customers. Moreover, the car is designed to eliminate corrosion, so the only items that degrade are intentionally designed as service items and no component failure can take the car off the road. This means that somebody taking a 10-year old car has an entirely predictable cost of motoring. If you drive 10,000 miles a year, you will know at the beginning of the year what it will cost. For this reason, I think our model democratises access to cars in a way that the sale of product model can never replicate.
The trial is starting this summer and it will run until we are in volume production. The plant is designed to make 5,000 vehicles per annum. We hope to have that plant operational by the end of 2021, meaning volume production in 2022. It would employ about 220 people and include a relatively low level of automation. Abergavenny in Monmouthshire would follow on as one of the first of multiple entry points with the volume production version. After that, I wouldn’t like to put timescales on further plants. But the point is that our model is profitable at a low volume, while it is also scalable. When we want to increase volume, rather than knocking down the first plant and building a bigger one, we just build another plant of the same scale. Each plant has a much shorter lead time than a huge plant, because there is a smaller infrastructure burden, while the model also delivers more distributed employment. In this way, we can create employment in less densely populated areas. We want to help develop the fabric of a more distributed, decentralised economy, because it is much more resilient.
"Quite frankly, we want as many people to copy us as possible."
We absolutely intend to open source our technology when we start volume production, but not before. We are developing different standards for making hydrogen cars. Hard-wired into our model is much lower weight, lower resource consumption, higher value recovery at the end of life and much higher efficiency. Quite frankly, we want as many people to copy us as possible. Open sourcing our technology amounts to collaborating with those who copy us and it builds volume in our supply chain. Since cars using our standards will have a relatively generic parts bin, independent operators will be able to provide field support. In this way, we can reduce the need to duplicate the industry’s current distribution model, which is one of the main entry barriers for hydrogen technology. In fact, our competition does not come from people who copy us, it comes from people who make traditional cars through the traditional model. It will be that way for decades to come, because the mainstream industry will continue to set the pricing in the market.
"The authorities already regard hydrogen as safer than petrol, and that is very definitely the case."
We actually receive far fewer questions about safety than we used to have. The authorities already regard hydrogen as safer than petrol, and that is very definitely the case. Essentially, the hydrogen tank is a lot stronger than a petrol tank, so it’s much less likely to get ruptured in an accident. Secondly, petrol tends to pool under a car and incinerate it, whereas hydrogen disperses rather quickly into the air and does much less damage. But the most important thing is that, petrol being a liquid, you need to let air in to let the petrol out, giving you a combustible mix of oxygen and fuel; whereas with a compressed gas tank, you never need to let any air in, so nowhere in the entire vehicle do you ever have a combustible mix of oxygen and fuel.
"We are not trying to be first, we are trying to do something much better."
We’ve built a fantastically strong and cohesive team. It is very difficult being a pre-revenue startup. It’s quite wearing for everyone. Most companies are in a pre-revenue stage for two or three years; we’ve been pre-revenue for 18 years. (laughs) One thing I want to underline is that we are not trying to be first, we are trying to do something much better. From my 20 years in motor racing, I came away with one dictum: “There’s never enough time to do the job properly, but there’s always enough time to do it twice” and we see the evidence for that temptation all around us in human society, the way we do things quickly rather than do them properly. We are very clear with our investors about our mindset. We want to build a business for the long term, and we think resilience is more important than profit. You can’t have a resilient business that isn’t profitable, but you can easily have a profitable business that isn’t resilient. For people joining our team from outside, this is a different mindset than they are used to. It’s characteristic of Riversimple: delayed gratification.