HYPERLOOP TECHNOLOGY: ECONOMIC ANALYSIS OF A TRANSPORTATION REVOLUTION

Open Access
Author:
Covell, Jacob Thomas
Area of Honors:
Industrial Engineering
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Brian Spangler Davis, Thesis Supervisor
  • Catherine Harmonosky, Honors Advisor
Keywords:
  • Elon Musk
  • Hyperloop
  • Economics
  • Economic Analysis
Abstract:
This report analyzes several aspects of the Hyperloop technology, with a focus on assessing the technological and economic feasibility of the proposed system. Although there are numerous Hyperloop routes under current consideration, this study concentrates on valuating the proposed San Francisco to Los Angeles route. From a technological standpoint, this study concluded that there are many engineering concerns and external risk factors associated with the design of the Hyperloop, which limit the viability of the system. Furthermore, the economic feasibility study established a rough valuation for the proposed route through a DCF analysis. It was determined that the project would be operationally profitable in each of the nine scenarios, under both discount rate assumptions. After taking into consideration the initial capital construction costs of the project, however, the study concluded that only six scenarios were net present value positive under the lesser discount rate assumption.