Former SpaceX engineers design electric wagons

The Parallel Systems team.

Photo courtesy of Parallel Systems.

Three former SpaceX engineers are starting a company to design and build self-driving electric train cars, with the goal of improving efficiency and reducing emissions in the freight rail system.

Freight trains are much more energy efficient than trucking. Thanks in part to better aerodynamics, moving a freight unit by train requires a quarter of the energy of moving it by truck, CEO and founder Matt Soule told CNBC.

“But because of the way rail is architected, it has its operational and economic limitations,” Soule said. “But if you can break through those barriers and allow rail to serve more of those markets, that’s the opportunity.”

Switching the freight system from diesel to electric could also play a major role in reducing the carbon emissions that cause global climate change. Transportation accounts for 29% of total greenhouse gas emissions in the United States, according to a report released by the Environmental Protection Agency in December 2021. Nearly a quarter of that comes from medium and heavy trucks.

“We think it’s very relevant to focus on reducing energy consumption,” Soule told CNBC.

Soule came up with the idea in an unusual way.

At SpaceX, where he started in 2006, Soule was the head of avionics, meaning “we made the electronics that allowed the rocket to fly straight.” After leaving in 2019, Soule was waiting to meet a friend, technologist and product designer Brian Ignaut, for coffee and watching YouTube on his phone. The selection algorithm randomly served him a video about freight trains. This got him thinking about the potential of the freight train system and the need to reduce its carbon emissions.

By Thanksgiving 2019, the idea for the company was coming to fruition, and in January 2020 Soule launched the company with two other SpaceX employees, John Howard and Ben Stabler. The trio remained silent about what they were doing until Wednesday, when they revealed the company to the press and announced a $50 million funding round led by Anthos Capital.

Linking “platoons” of self-driving wagons

The company is only at the prototype stage and has no customers or revenue yet. With the new round of funding, Parallel Systems, which operated with seed funding of $3.6 million, will build a fleet of rail vehicles, run advanced test programs and grow the team.

So far, with its team of about 25 engineers from tech companies like Google, Tesla and Uber, Parallel Systems has built several prototypes and tested its first-generation vehicle on a closed track in the Los Angeles area.

Vehicles work in pairs. Each pair carries a standard shipping container – the same box that goes on flatbed trucks and is loaded in and out of ships in port cities around the world.

Second generation rail cart from Parallel Systems in the workshop. Two of these vehicles are used to move a sea container.

Parallel systems

The wagons carrying the containers are each self-contained, but the system will work best if the wagons are linked together. So instead of having a long freight train powered by a few diesel locomotives, Parallel Systems envisions a “platoon” of 10 to 50 self-powered freight cars, Soule told CNBC.

This is much shorter than traditional freight trains, which can carry up to 200 cars or more. Today, freight trains favor length because the more freight a single train can carry, the cheaper it costs to move each full unit of freight. But parking and unloading them is a big chore, Soule told CNBC.

A very long train requires a very large railway terminal for unloading and loading freight. This can be a problem because the ports and places where freight is loaded are often in urban areas, like Los Angeles, where land and space are scarce.

Autonomous train platoons could improve rail terminal logistics and reduce these costs.

“Because the vehicles position themselves under the crane and automatically egress, the terminal downtime and land capacity required is much less,” explained Dean Wise, former vice president of strategy at network at BNSF Railway which advises the company.

This is an artistic representation of a Parallel Systems micro-terminal.

Illustration courtesy of Parallel Systems

Making cars electric doesn’t necessarily make the system totally green – it depends on how the electricity that powers that part of the grid is created, as Soule readily admits.

But an electric train car at least has the potential to emit zero greenhouse gases, while diesel trains will always emit them.

Moreover, because electric rail vehicles consume 25% more energy than a long-haul truck, their batteries only need 25% of the storage capacity that would be needed for a long-haul electric truck. Soule said the company hasn’t decided what type of batteries to use yet, but is looking at storage technologies from the cargo space.

‘You can see the bulb go on’

For Soule, transitioning from his previous position at SpaceX means getting used to overseeing and driving the entire company forward and getting used to being a salesperson.

But he says it’s been encouraging to see industry veterans react to the prototypes, Soule said.

“No matter how many PowerPoint presentations we give them, as soon as they come to see it in person, you can see the light bulb go on,” Soule said.

Wise says former SpaceX engineers clung to an idea that others in the industry had dreamed up.

“At BNSF, we had thought that a self-powered autonomous rail vehicle would be a game-changer, dramatically improving rail’s ability to compete with the highway and defend against the impending challenge of self-driving trucks – now recognized by most like a matter of when, not if,” Wise told CNBC.

So far, Parallel Systems has had calls with 30 “large companies” in the space, including Class 1 railroads, shortline railroad holding companies, motor carriers, ocean carriers, ports and industrial shippers, Wise said.

“For me, the deciding factor was that these conversations were universally positive and revealed additional value, improvements and potential applications, leading several companies to seek strategic development partnerships and investment opportunities with Parallel” , Wise said.

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