THE BLOG

29
Nov

TRANSFORMATION – ENABLERS AND CONSEQUENCES – Hugo

Hugo Spowers was invited to address the 2018 annual conference of the European Investment Bank on 28th November

Good afternoon. I am Hugo Spowers, from Riversimple and I used to be an engineer designing racing cars but for the last 18 years I have been developing hydrogen fuel cell vehicle technology and, more importantly, the strategies and business models necessary for bringing them to market in a truly sustainable manner.

The key barriers are not technical but to do with people, politics and business inertia. I, or we, have been doing this independently because it is such a step change that it is much easier to do from a clean sheet of paper than trying to shoehorn hydrogen technology into a vehicle architecture, a manufacturing model, a distribution model and a culture that has been shaped by combustion engines.

And this step change goes beyond cars. We’re going through an industrial revolution and it is only possible because of the power of digital.

Technology deployment is mainly driven by those who stand to make money from it and nobody ever made money from NOT doing something. For instance, we are resigned to the inevitability of autonomous vehicles but nobody is really asking how they should be deployed appropriately – to maximise the benefit to society rather than short term profit – despite numerous potential negative unintended consequences. Technology is never bad in itself – it’s how we deploy it and we don’t have a great track record. In 1973, the Chief Economist of the UK’s National Coal Board – EF Schumacher – made a cautionary observation that “A society’s leisure time is inversely proportional to the amount of labour saving technology it employs.” We need a wisdom filter for the application of technology.

And transformation is not just about technology; the scale of transformation we are facing is utterly dependent on new systems and business models and these will have impacts as profound as the new technologies themselves. Business models, like living systems, are shaped by the constraints within which they operate. The business models of yesteryear treat natural capital as infinite, an understandable assumption when we were but a pinprick on the side of the planet, but the key drivers of today – climate change, energy security and peak resource issues – were simply not on the radar when these models evolved. We HAVE to take a bold, long view – because less unsustainable is still not sustainable – and it is much easier to design new business models to suit these conditions than to try to tweak business models that were designed to do something fundamentally different.

Because of these constraints, we are moving from a linear economy dominated by the sale of product, that directly rewards the maximisation of resource consumption, to a circular economy that rewards resource conservation. Or at least I hope we are, because I don’t see how we can ever have a sustainable industrial society based on rewarding industry for the opposite of what we are trying to achieve.

I am going to explain our model, the circular value network that we are building at Riversimple.

This is our first low volume production model, to be provided to customers under a sale of service contract that covers all costs, including insurance and fuel.

In the car is a fuel cell from a fuel cell manufacturer; in the fuel cell are Membrane Electrode Assemblies, or MEAs;

and on the membranes is platinum.

In our model, all these components stay on these respective balance sheets whilst the customer has the car.

The customer pays Riversimple a monthly direct debit with a fixed monthly base rate and a mileage rate – it is the only transaction involved in having the ‘usership’ of a car. We don’t buy the fuel cell – we pay for installed kilowatt hours of electricity. We are in discussion with two fuel cell manufacturers and it’s a complex transaction with multiple elements, such as a monthly inventory charge, a charge for the hours of running time as this degrades the fuel cell, and a payment for the efficiency with which our hydrogen is converted into electricity.

In turn, the fuel cell manufacturer doesn’t buy the MEA but pays on a similar contractual basis, as the membrane is where the degradation happens; in discussion with one supplier about this, their technical director immediately suggested that they would increase the platinum loading because that improves efficiency and they know they will get it all back – an example of how profoundly the business model affects the product design.

And in this model, they would not even buy the platinum, but lease it from a mining company, and at least one mining company has expressed interest in this model. There are obvious environmental and social benefits if a mining company can decouple its revenue from new raw material inputs.

The fuel cell is only a fraction of the whole. To enable these various levels of selling service, there are multiple payment calculations for each component in each car. Just last week, I was in Copenhagen working on a project funded by the EU’s Climate-KIC programme with Denmark Technical University and a tyre company on the micro contractual elements of paying for tyres by the mile and the impact that has on the design of the tyre and its environmental performance.

For a large fleet of cars, this is a mind-boggling number of calculations and it’s ONLY possible through the power of blockchain to automate trust and deliver a frictionless solution to enable a truly circular economy.

The two key features that maximise the competitive advantage of this model are a) that the asset is retained on the same balance sheet from a clean sheet of paper to End of Life and b) that all operating costs are internalised. And there are many benefits, but I will just pick out 4.

First is the alignment of interests

–           It puts everyone on the same side of the fence, including customers – if a supplier sells a component, their financial driver is the highest acceptable price and the shortest acceptable life whereas in this model, all parties have a shared interest in the cheapest way of providing a mobility service to customers for the life of the car.

–           This creates an ecosystem of cooperation and is a much stronger foundation for a collaborative working relationship.

Second is the driver towards quality

–           If selling a product, another major interest is the lowest possible cost, a structural driver towards low quality and shorter life – think no further than modern fridges.

–           When selling the service of a component or a car, a higher quality, longer lasting component, at a marginally higher cost will generate revenue for a much longer time, so it is more profitable at the same price to the customer – a structural tendency towards high quality.

Third, it makes efficiency profitable

–           It costs more to make a more efficient car but, if you sell cars, customers will never pay a premium, so it just reduces margin.

–           However, if selling the service of the car, we the manufacturer pay for the fuel for the life of the car which justifies investing in efficiency – because we reap the benefit.

Finally, it lowers the economic barriers to bringing new Low Carbon technology to market

–           In this model, being competitive is not dependent on the build cost of the car, but the lifetime cost.

–           The paradox is that by internalising all associated costs, we benefit from lower operating costs, end of life value recovery and much longer revenue streams, all of which offset the higher build cost and eliminate the entry barriers faced by new, low carbon but low volume technologies.

The transformation that I am describing here is a system level change but our culture, our businesses and our institutions are not attuned to system level change. Culturally, we regard it as prudent to change one thing at a time.

When any radically new idea is proposed, all the conversation goes straight to the reason why it can’t be done – and these reasons are generally true, but they assume that the context remains the same. The old idea co-evolved with a network of relationships and it is these connections that are the reasons why ‘It won’t work’!

If instead, we are prepared to start afresh and co-develop a new pattern of relationships, all those reasons disappear and the new idea can suddenly look much more attractive – starting again from a clean sheet of paper lowers both risks and barriers.

When there is a step change in external conditions, a new solution always emerges from a surprising quarter – not an evolution of the old solution – dinosaurs were not replaced by better dinosaurs. Climate change and peak resources, in a world with growth both in population and affluence, are presenting us with just such a step change in external conditions. Incremental solutions cannot solve these problems – You can’t cross a chasm in 2 leaps.

We all KNOW that we need radical solutions -the word on everybody’s lips, the thing everybody is seeking is Innovation – but from the perspective of one proposing such radical solutions, the resistance is overwhelming.

Our cultural leaning towards incrementalism, being prudent, obviously extends to our businesses, to investment and to our institutions, so they are not well suited to recognising innovation or fostering system level change. If we think in terms of a Bell curve, the really interesting innovations are at the edges of the Bell curve.

Understandably, for reasons of accountability and transparency, independent assessment is required for allocation of support but these independent experts are drawn from the incumbent industry. There is no conspiracy in what then happens; the experts tend to be very capable and to understand their industry and its constraints very clearly. However, from within their industry, their own constraints are seen as absolute and they simply cannot take off those blinkers and see the possibilities that exist if their constraints are lifted. The result is that the bulk of support goes towards incremental solutions.

Which brings me back to productivity and harnessing technology innovation. We need to challenge the bias towards incrementalism if we are to match the agility of China and other Asian countries. The devil may be in the detail, but God is in the system and we need to embrace new patterns of relationship.

Thank you.
20
Oct

Green GB?

We had the privilege of meeting Claire Perry on Thursday at Cardiff University and she loved the Rasa – the innovation in it, its efficiency, the fun it offers.  She was there to mark the first Green GB week, led by the Government and UK R&I, with the aim of engaging the British public on the importance of tackling climate change and ensuring clean growth.

While it would appear perfect timing for us – the first Rasa Beta is rolling off the production line here in Powys, Wales – we cannot overlook the irony that this week a whole new fossil fuel industry has lurched into life with the blessing of this government, just days after the Intergovernmental Panel on Climate Change (IPCC) issued their sobering report on the global climate situation.  Addiction is always hard to break but, if we are addicted to fossil fuels, fracking really is trawling for the dregs, analogous to the stereotype of tramps drinking methylated spirits!

It is causing us some cognitive dissonance.  How can we believe in the government’s sincerity about championing Clean Growth while they are supporting the opposite?

Less unsustainable is still not sustainable

This week Cuadrilla started fracking for shale gas.  The UK Government are stating that shale gas has the potential to provide the UK with greater energy security, economic growth and jobs, and could be an important part of our transition to a low carbon future.  Literally undermining our national parks is hardly a bridge to a low carbon economy – it’s a very circuitous route at best. Any distraction from the real work of getting our renewable energy sector off the ground is very shortsighted – why not take the high road and invest directly in renewable energy?

Divesting and investing

Last month the Mayors of London and New York made a public appeal for cities to divest from fossil fuels.  In a joint statement they said, “We believe we can demonstrate to the world that divestment is a powerful tool and a prudent use of resources.  And that, together, our cities – New York, London and many others around the world – can send a clear message to the fossil fuel industry: change your ways now and join us in tackling climate change.”

Scottish Power announced their own divestment this week – that they are turning to 100% wind power shows what can be done.

Our refueller installed in Abergavenny

We are often asked where the hydrogen for our cars comes from.  Right now, hydrogen is reformed from natural gas for a large number of industrial processes; it is also a byproduct of many.  While it’s more efficient to generate hydrogen than electricity from natural gas (70% rather than 49% – p.147, DUKES 2018), and we are making the most of any hydrogen we use – you can go 200 miles on a kilo of hydrogen in a Rasa,  as opposed to 66 miles in a Toyota Mirai – we are looking forward to plentiful green sources of hydrogen.  Electrolysis from green electricity, photo catalysis, waste from methane-eating bacteria … bring them on!

Now that would be something to invest in, Minister!

 

23
May

RIVERSIMPLE ACCELERATES IN DUBAI

Riversimple has just returned from a two-month accelerator project in Dubai – an initiative that has seen the Rasa and our philosophy embraced by a completely different culture living in a much harsher environment. 

The timing wasn’t great, with 20 Beta test cars to get built in Wales, but when the Dubai Future Foundation, headed by Dubai’s Crown Prince, invited us to take part in the 4th Dubai Future Accelerators (DFA) programme, we jumped at the chance. We were sponsored  by a powerful government department: the Road and Transport Authority (RTA).

The view from the top of the Emirates Towers

Dubai is a place like no other. It laid its first modern brick in 1973 and is now a city state of 3 million thoroughly multicultural people. Furthermore, it continues to expand at a furious pace. Despite its terrible air quality, mad traffic issues and paradoxical desire to be environmentally friendly, there are 27,000 building projects on the go as we write and the skyscape is a sea of cranes.

The DFA is designed to enable businesses to develop technologies and proposals far quicker than would ever normally be the case. Companies taking part (37 in our ‘Cohort’, selected from 677 applicants) are hosted in the Government’s offices to allow for accelerated processes, hence the DFA’s tag-line: ‘pulling the future forward faster’.

The entrance to our office

Dubai is unashamedly determined to be quickest, boldest, biggest, highest, cleverest and altogether ‘the mostest’, not only among other Emirate states but also among all countries of the world. It also happens to be one of the hottest and dustiest places, humid and salty, so pretty tough for the Rasa. But that provides the perfect opportunity for us to ‘accelerate’ our technology development for much more extreme climates. We want to bring a Whole System Design approach to developing both a highly efficient cabin cooling system and  fuel cell cooling technologies. That done, the Rasa and its descendants could operate in a far wider, much warmer market.

So, for the past 8 weeks, a revolving team of Riversimple personnel have been in the DFA offices investigating how the RTA – and other independents – could embrace not only the hydrogen economy, but also our technology, circular economy business model, and a culture of ultimate efficiency.

We have met with around 80 different interested parties, exploring opportunities with R&D establishments, data specialists, blockchain experts, niche vehicle builders, financiers, transport companies (not least the RTA themselves), energy suppliers and distributors, entrepreneurs and developers, the EXPO 2020 organisers, and a host of national and federal government officials. The Welsh Government were there to support. It was a rollercoaster of dialogue and investigation and the result is an agreement with the RTA to progress our agenda, ultimately – we hope – building a dedicated Dubai-friendly prototype.

So, in the land of big cars with big wheels and big engines we are pleased to report that our championing of the hydrogen future, our circular economy model and all things Rasa have found synergy. And if small can be recognised as beautiful there, it can be anywhere.

Our grateful thanks are due to the Dubai Future Accelerators (in particular our Project Manager Faisal Kazim and Program Managers Karin Gabriel and Abdallah Kanaan), the Future team of the RTA (in particular the wonderfully enthusiastic and technically-savvy Mohamed Saleh Al Shareef), and our friends and advisors Kyle Weber, Dr Alessandro Zampieri and Mohamed and Abdulsalam Haykal).

09
Feb

2018:THE WORLD IS MOVING IN RIVERSIMPLE’S DIRECTION

Air pollution concerns have really brought the need for clean cars to the fore. Now that combustion-engined vehicles have a ‘Sell By’ date of 2040, there is much greater focus on practical and viable alternatives and the question of scale is surfacing. What are the 34 million cars in the UK alone going to be replaced with?

On one level, this is clearly an opportunity to lower the total number of cars in circulation and move to more shared vehicle usage, especially in cities where owning a car is becoming ever more onerous.

But what will the cars of the future be running on?  Whilst battery electric cars will have a part to play, large-scale adoption is likely to be stymied by the ~50% of UK customers who do not have easy access to overnight charging.

Shell/ITM hydrogen station, Cobham Surrey

Each publicly accessible battery charger only supports a handful of cars. A hydrogen refueller, on the other hand, can be placed on an existing forecourt and, like a petrol station, support thousands of cars. Per car served they are massively cheaper, so at scale, hydrogen infrastructure is more economical.

Senior automotive executives share our perspective on the potential for hydrogen cars, according to KPMG, and a recently highlighted industry shift towards fuel cell investment has seen Honda, Toyota, Hyundai, General Motors, Mercedes-Benz, BMW and Nikola One refocus on hydrogen-powered models, which has put the spotlight on our engineering approach in this time of critical change for the auto-industry.

Riversimple remains ahead of the pack with the lightest, most efficient fuel cell car – which, incidentally, also makes it the cleanest. No emissions except pure water and a fraction of the particulates of other cars (thanks to skinny tyres, low weight and electrical braking).

We are now embarking on our next crowdfunding round. Our focus is on Beta testing the car and service with the public and the funding will get the Rasa into Beta series production.

Thank you to the hundreds of people who responded to our plea for Beta test drivers. We hope to engage with as many of you as possible in refining design and service features, even if  you are too far from Monmouthshire to be a driver.  .

 

 

 

07
Jan

GROWING PUBLIC INTEREST IN RIVERSIMPLE AND THE RASA

Talking to the public about Riversimple and showing the Rasa at events is an important part of growing the Riversimple movement. We reported last summer about our hectic public activities to June last year, and the second half of last year saw no let-up.

In August, we joined the Hydrogen Hub in Swindon for a day dedicated to the local hydrogen economy. There is a refuelling point there and over 30 organisations are working together to develop projects to deploy hydrogen and fuel cell technology.

Our progress also drew a very prominent visitor to our HQ – Lord Bamford, Chairman of JCB, along with a team of engineers, dropped by in a helicopter much to the amusement of golfers on the local green!

In September Riversimple founder Hugo Spowers gave a lecture at the Institute of Engineering and Technology and we presented at the Unreasonable World Impact Forum at the Royal Institution in London.

In October, Hugo was a panel speaker at the Tory Party Conference in Manchester chaired by Jesse Norman, Undersecretary for Roads and Transport, on the subject of decarbonising road transport and he spoke again at the prestigious Wired Energy Conference in London, while senior engineer Dr Stafford Lloyd spoke at a House of Lords committee meeting on zero emission vehicles.

In November, while the Rasa went to the Advanced Engineering Show at the NEC and then on to Brussels to support the annual review of the Fuel Cells and Hydrogen Joint Undertaking (FCH JU), Hugo spoke in Bratislava at the UNIDO Conference on the Circular Economy for the automotive industry and

 Stafford went to Uruguay to present at the first Circular Economy Forum for Latin America which was subsequently featured in the Disruptive Innovation Festival  – Riversimple is an Emerging Innovator Member of the Ellen MacArthur Foundation’s CE100. 

In December, Hugo gave the inaugural David Mackay Memorial Lecture to the Energy, Environment and Sustainability Group of the Institute of Mechanical Engineers and addressed the Innovation team of the Welsh Government the day afterwards.

But maybe powertrain architect Dr Nico Sergent had the sunniest December speaking engagement, at the Energaïa conference in Montpelier in the Occitane region of France.

In the meantime, back at Riversimple HQ, the workshop and R&D teams have been busy fine-tuning the software and modifying some of the hardware for the build of new Beta cars. The new carbon fibre chassis includes front and rear subframes and is 20 kgs lighter in total.  More on the technology next time.

May 2018 be a Happy Year for all enterprises focused on eliminating negative environmental impact.

 

 

04
Jul

FROM SWANSEA TO BAKEWELL – THE RASA HAS BEEN IN GREAT DEMAND

We have been to a wonderful series of summer events, from grassroots festivals to art exhibitions to internationally-renowned extravaganzas attracting crowds of over 250,000. Whatever the audience, people are impressed by the Rasa’s sophisticated, ultra-efficient design and our game-changing business model. We remain the only car-maker to adopt a circular economy, and we are sticking firmly to our fundamental aim of making the car accessible to the many, not the few.

Our first event of the season was the Clean Air Roadshow in Swansea in April, organised by Swansea City Council. The Rasa sat in Castle Square beside two Hyundai FCEV cars owned by Swansea Fire Service – what greater endorsement of hydrogen cars could there be?

At the Hay Festival we discussed sustainable transport with the Festival’s Andy Fryers. The Times also covered our observations about the heated debate between EV owners and FCEV supporters.

The Rasa held its own for a week as a work of art among the Supercars including a McLaren P1 as part of the stunning Art in Motion exhibition at Messum’s Gallery in Wiltshire.

And then the car was honoured to be a key feature in the RHS’s ‘Garden for Changing Climate’ at the Chatsworth Flower Show.  Designed by the University of Sheffield to highlight their report for the RHS on the impact of climate change, the garden itself featured wild flower lawn along with orange and olive trees.

Built by landscape experts Killingley, it was also full of clever ideas to illustrate how to manage future water needs and reuse materials. Changing climate being the theme – the first day of the event was cancelled due to gales and heavy rain!

 

Most recently, we have been in Abergavenny to promote our forthcoming Beta Test of 20 Rasas, starting at the end of the year. We have begun to compile a list of triallists in and around Abergavenny; if you are interested in participating, please click here for more information.

10
Apr

THANK YOU AND WELCOME, RIVERSIMPLE CROWD

As our first crowdfunding closed at midnight on Sunday 9th April, we were thrilled to have reached over £1,138,000. A huge thank you to all those who have pledged to join the Riversimple crowd on this exciting and important journey towards clean and efficient cars. You have not only invested in the Rasa but also into an entirely new business model. The next generation of zero emission vehicles requires the next generation of business models. We are building the riversimple business to be circular and sustainable. We are looking to partner with the UK’s leading business schools to enable the implementation of circularity and sustainable practices into Riversimple.

Photographer: Anthony Dawton

In the meantime, we have fitted a new back end to the Rasa made of bio carbon, with layers of flax woven into it.

Inspired by nature in so many ways, the car has butterfly  doors and  now a ‘whale fluke’ boot, which will comfortably take a set of golf clubs or, if it is more to your taste, two cabin bags and a case of wine.

And that is good news as we definitely have occasion to celebrate! The entire team in LLandrindod Wells is in very high spirits. Thank you all.

15
Mar

THE INVESTMENT CASE FOR RIVERSIMPLE

As we approach the final days of our first crowd round we thought we should share some reasons to make your investment. The numbers and financial projections are readily available once you’ve registered but here is the big picture.

Our business is focused on making efficient cars desirable and efficiency profitable. Bending great engineering and design to this task is indisputably good news for the environment, but it also makes sound business sense. The more efficient our cars are and the longer they are on the road, the more money we make. No need to cheat the regulations.

Environmental performance    

The Rasa is the car furthest on the road towards sustainability. It boasts the lowest CO2 well-to-wheel, the lowest particulates and NOx from tyres and braking (none from the exhaust – just pure water), the longest lasting cars, with maximum recovery of value at end of life. And at the equivalent of 250mpg, it is probably the most fuel–efficient vehicle yet designed for everyday road-going use (ie not a test or competition car).

This environmental performance is not at the expense of design and desirability. 

Design and Desirability The lines of the Rasa are sleek and streamlined for incredible aerodynamics. Chris Reitz, famed for designing the iconic FIAT 500, styled the Rasa: “Early adopters are very open in their mind – they like to have their finger on the pulse, they look for a car with style.”

And the Rasa is a dreamy ride.

 “A car designed from the ground up to harness the power of hydrogen, and slip through the air like an otter through water “ Jack Rix

  “Almost like a glider to drive, inasmuch as it wants to flow with nature”   Chris Evans

But the car is principally designed with people in mind – their safety and comfort. For example, the butterfly doors make it easy to get in and out of, despite being a low car.

We also believe in minimal clutter and will be seeking to (River)simplify even further. Our planned 20-car beta test will allow feedback to directly influence the development of the car and the service to deliver what customers really want and remove the things that they don’t.

A business model that delivers for the customer as well as the company

Offering the car as a service makes our cars affordable, de-risks uptake for the customer and takes the hassle out of ownership with an all-inclusive, cost-transparent service. Globally, consumers are shifting their perceptions. And this works to our advantage. Usership over ownership is a common theme in some clever and astonishingly lucrative businesses, from mobile phone providers to hire-by-the-hour cars. The future is ‘servitisation’.

Sustainability also makes sense for shareholders. Some businesses are starting to adopt circular economy principles to save money. We‘re a step ahead. Our entire business is designed not just to save money but make more profit, at the same price to the customer, with cars that are built for longevity, resource conservation – and, crucially, a resilient income stream.

A hydrogen lead in the UK

China, the world’s biggest car market, is now actively supporting fuel cell vehicle development with major subsidies, and countries like Japan and the US, regions known for leading innovation trends, are developing infrastructure for hydrogen.

Riversimple could give the UK a lead position in this technology. Compared to other hydrogen fuel cell cars, Riversimple’s vehicle has the same acceleration and range, but is a 3rd of the weight, a 13th of the power and 3x as efficient. Public refuelling stations in the UK are being opened, with more stacking up in the pipeline. These stations alone are enough to support our first 3 years of planned production.

Small-scale manufacturing, big talent

Our latest innovation? A layer of flax in the Rasa’s carbon fibre shell. Our continuing focus is on efficiency, lightweighting, improvement of the ride in the car and safety.

Small is beautiful and profitable in our case, but it is also scale-able; this broad spectrum of profitable scale is very rare and is a key strategy to derisk our business.

Our business model embraces small-scale, regional manufacturing operations that draw on the best the UK has to offer and our first phase of manufacturing could create 220 jobs locally in Wales. UK automotive talent is world-renowned and we’re already attracting engineers from the likes of Bentley, Jaguar Land Rover, Rolls Royce plc and aerospace. We also have the promise of material financial support from the Welsh government.

Improving air quality

Finally, and maybe most importantly, we are offering something that the world needs rather more urgently than autonomous vehicles.  According to the Royal College of Physicians, c.40,00 early deaths a year in the UK are caused by air pollution.  Just under 210,000 light delivery van journeys  were recorded in Birmingham in 2015.   Imagine replacing all those diesel delivery vans with non-polluting Riversimple hydrogen vans.

This  is an opportunity to invest not only in a huge market but in a future that we all want to see and breathe.

INVEST HERE

Our current crowdfunding campaign has been approved as a financial promotion by ShareIn Limited, which is authorised and regulated by the Financial Conduct Authority (603332). Capital at risk.  Photography by Anthony Dawton.

27
Jan

MAKING EFFICIENCY PROFITABLE

Hugo was invited to  ‘pitch’ his vision of how to de-carbonise road transport in a ‘Dragon’s Den’ style event hosted by Policy Exchange on January 27th 2017. The audience voted it the winning vision. Here it is in full, delivered in 7 minutes.

How to de-carbonise road transport?

The answer is that we need to make efficiency profitable.  This may sound glib but it is the core of Riversimple’s proposition.

By this I mean that the principal barriers are not technical, but to do with people, politics and business inertia.  If we make the pursuit of efficiency a source of profit, the technology is available to transform the carbon performance of our vehicles.  I am not saying that it’s easy, there’s a lot of work to do, but technology is not one of the showstoppers, although it does unfortunately dominate the debate.

Riversimple is currently developing Hydrogen Fuel Cell Vehicles (HFCVs) – we appear to be the only independent hydrogen fuel car company in the world. However, we are a sustainable car company not a hydrogen car company.  We do need a portfolio of solutions and we support the appropriate use of Battery Electric Vehicles (BEVs) for short range applications with overnight charging to stabilise the grid, but the reason we are developing hydrogen vehicles is that there is nothing else that can be remotely as efficient as an HFCV, on a Well to Wheel (WtW) basis, for the sort of range to which we have become accustomed.  And it is the one area in which the potential of the technology is not being realised, so it is an opportunity.

The car that we have developed with support from the Welsh Government, the Rasa (as in Tabula Rasa), has a 300 mile range and its calorific energy consumption is equivalent to 250mpg on petrol.  Its CO2 emissions, if using hydrogen from natural gas, based on oil industry figures from the CONCAWE report, are only 40g/km, half that of anything claimed for any BEV.  Until we make more progress on decarbonising the grid, the last thing we can afford to do is dump transport demand onto it – we will make more impact on carbon emissions if we use green electricity to displace coal rather than petrol.

An HFCV also requires much less behaviour change than a BEV, with a similar range and refuelling experience to petrol.  This brings us to the biggest difference from an implementation point of view.  As we scale the volume, it becomes progressively harder to support BEVs and much easier, and more economic, to support HFCVs.  If we were to replace the 20 pumps at a typical motorway services with the charging capacity to support the same throughput of battery cars, using Tesla’s figures, we would need a 14.4MW substation, which to put it in perspective is the average consumption of 27,400 homes in the UK.  So the idea of replacing our 30 million combustion-engined cars with batteries is utterly inconceivable.

There is a chicken and egg question over the critical scale of infrastructure required to unlock a commercial market for hydrogen cars, a few hundred for the UK, and we need a transition strategy.  If we start with cars for local use, a large proportion of the UK fleet of 30 million, this critical scale comes down to one filling station.  If you put a single filling station in a small city, such as Oxford, anybody who wants a car for local use and has a reason to come into Oxford once a week is a potential customer.  That is the reason for our 300 mile range, not 300 mile journeys.  And if you put 50 cars into the market there, the filling station has 50 captive customers and will break even more quickly, so the investment case is stronger.  You can then grow the network, one filling station at a time, allowing you to grow the skeleton of a nationwide network without ever taking a nationwide gamble.

But I’d like to return to my initial point.  A VW Beetle in 1948 did 38mpg. 60 years later, a new VW Beetle did – 38mpg!  It was obviously faster and safer but we must remember that less than halfway through this period, in 1973, was the oil crisis, so we might reasonably have expected more progress than this. Unfortunately, if you sell cars, there is no incentive to improve efficiency, because customers always discount future costs almost to zero – other than regulation, and that is a blunt instrument, as we have seen.  If we want to make progress, we must make energy efficiency profitable. We can, and this is a huge opportunity.

Instead of selling cars, if we sell performance contracts, all-inclusive contracts that cover all aspects of car usership, such as insurance and critically fuel, the manufacturer of the car is the one that receives the benefit of fuel efficiency – efficiency then becomes profitable.

This is much more effective than any mandate; a mandate gives an incentive to comply but not to excel. Whilst compliance eats into very tight margins, the incentive is to lobby against them and then to cheat when they’re in force.  Performance contracts require next to no behaviour change, as it is similar for the customer to leasing a car, only more convenient.

  • It generates stronger margins at lower prices to the customer.
  • It embraces car sharing in all its forms, as we are selling mileage rather than cars, whereas car sharing is an unwelcome trend if you sell cars.

It changes the financial drivers from obsolescence to longevity, from resource throughput to resource conservation, amortising embodied energy over as long a period as possible.

It aligns the interests of manufacturers with those of customers, of society and of policy objectives.

In fact, I don’t see that we can ever hope to have a sustainable industrial society based on rewarding industry for the opposite of what we are trying to achieve.

It also transforms the economic barriers of bringing new technologies to market; no premium is necessary, the cars can be supplied to customers at an equivalent cost of ownership long before the supply chain costs match those of combustion engines.

It even addresses professional car theft – who’s going to steal a car that you can’t sell?

What is more is that not only is a profitable industry a self-fulfilling prophesy but it needs less public subsidy.  However there are barriers.  Pump priming will make a dramatic difference to the speed at which we can achieve this; like acupuncture, small but well-targeted interventions will have a disproportionate impact in stimulating this change and unlocking an enormous economic opportunity for the UK.

In summary:

We need to take the long view and support a portfolio of technologies to reduce carbon emissions and energy consumption, as any sustainable system has to use available renewable energy as efficiently as possible, on the basis of well to wheel rather than tailpipe figures.

We need to support a realistic transition strategy for hydrogen infrastructure that enables early adoption and points the way for private sector investment.

The circular economy offers more resilient business models that profit from solving the problems we face.  They all generate significant debt requirements that will unlock a range of new financial products, but until the models are proven, government loan guarantees would significantly accelerate their uptake and the benefits they will yield.

And finally, hydrogen and electricity as our two primary energy vectors can deliver far greater economic utility than either on their own, but hydrogen is the one critical element of the puzzle that we do not yet have in place.

Thank you.

20
Jan

THE RIVERSIMPLE RASA DISTANCE TRAVELLED IN 2016

On this very day last year, 20th January 2016, the Rasa was driven for the first time. It was a very cold and very beautiful morning.

In February 2016 we launched the Riversimple Rasa, our sleek, smart prototype hydrogen fuel cell car.

In May, the Rasa starred at the London Motorshow.

Riversimple Rasa at GoodwoodIn June, the Rasa took on the hill climb at the Goodwood Festival of Speed.

Our local MP Chris Davies invited Riversimple Rasa to visit Parliament. We were overwhelmed by the interest and enthusiasm from MPs of all parties.

In July, Oldsmobile and Riversimple – pioneers in different centuries –  were side by side at CarFest.

Riversimple scooped the prestigious Simms Medal awarded by the RAC Club for “a genuine contribution to motoring innovation”.

Thank you to all the journalists and supporters who have taken the time to get under the skin of Riversimple.  We have enjoyed great reviews of Riversimple’s technology, design, business model and governance  and great conversations about the future of clean, sustainable mobility.

Nobody has written so clearly and thoughtfully about our governance before.

Growing the movement is our priority now 

Thank you to all crowd investors for your commitment to this journey… everybody who has a spin in the car gets out smiling.  People have pledged anything from £50 to £100,000.  Please join us while the crowdfunding is still open.

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