Could you help us out with ideas for future online Gatherings? Who would you like to meet and/or ask questions of? What kind of Gatherings would you like us to hold?

If you can spare a couple of minutes to answer two questions we would be very grateful.

In Conversation

Manda: Hey people, welcome to Accidental Gods. To the podcast where we believe that another world is still possible and that if we all work together, there is time to create a future that we would be proud to leave behind to the generations that come after us. I’m Manda Scott, your guide and fellow traveller on this journey into possibility. And our guest this week is Hugo Spowers, who calls himself the company architect of Riversimple, a company in Wales whose purpose is, and I quote, to pursue systematically the elimination of the environmental impact of personal transport. Which is huge. Modernity demands that we have personal transport, and the thought of giving it up is one of the many sticking points when people try to imagine a way through to that flourishing future that we want to leave behind. Nobody wants to be limited to their immediate vicinity for their work or leisure or social connection. We are used to being able to get in a car and move around. At the same time, we’re becoming increasingly aware, I think, of the limitations of electric vehicles. Simon Michaux has waxed at length on this podcast about the rate limiting steps to building the batteries that power them. Though I gather Norway is now one of the few nations on Earth, but it will not be the last, openly advocating investment in deep sea mining.

Manda: And yes, that is the destruction of ancient, incredibly complex, utterly underexplored, and probably quite fragile ecosystems so that we have more lithium for the renewables revolution. Which is horrible on so many levels and isn’t going to work. I don’t suppose I need to explain why. But this is what makes Riversimple’s approach so transformative. They’ve gone right back to the basics of what makes a car in the first place, and then how could it be made better? Not just lighter and more efficient and fuelled by something that doesn’t create greenhouse gases, or require the entire destruction of ecosystems to keep it going, but how could it be made so that the aims of the manufacturer and the customer are aligned, and both are aligned with the need for a flourishing planet? On its own, this would be completely inspiring and transformative and revolutionary and all those good things. But that isn’t the end. Riversimple is structured with a new, innovative and I think, genuinely, utterly transformative Future Guardian model of governance. Which means that the shareholders are not the only people who have a say in how the company is constructed and how it works. Hugo describes this near the end of the podcast, so I’m not going to go into the detail here, but it does seem to me that if every company on the planet shifted to this model tomorrow, by the day after, we would be well on our way to healing many of the complex aspects of the meta crisis.

Manda: It is a combination of business and finance that is powering us over the edge of so many cliffs. And it’s not that we can’t change, it’s that we don’t understand what we could change to, and then we don’t have the will to make the change happen. Riversimple has the answer to the first part of this: the future Guardian governance model. Is a model that would totally transform the way that we do business. And what we consider to be value and what we consider to be useful, and how we can work together with the best of human creativity to answer the problems of the moment. As Hugo says quite early on, we know all the answers, we just need to make them happen. So here we are. Human creativity is astonishing, and we do have a lot of the answers. We just have to spread the word.

Manda: So here we are, people of the podcast. Please welcome Hugo Spowers of Riversimple, originator of the Future Guardian model and creator of amazing hydrogen fuel cell cars. Hugo, welcome to the Accidental Gods podcast on this wild and windy morning. How are you and where are you today?

Hugo: Good morning. I’m in our R&D base in Llandrindod Wells in mid Wales.

Manda: Mid Wales. It’s actually not very far from us because we’re right on the border. I love it. You’re just over the hill and another hill.

Hugo: Where are you?

Manda: Where are we? We’re near Bishop’s Castle in Shropshire. So right next to the border. So yeah, we definitely are within visiting distance. I will come and visit at some point when everything is settled down. If everything settles down. I have a suspicion we’re going to look back on this as the quiet part, which is quite disconcerting. Anyway, you are company architect of Riversimple and Riversimple is, of all the things I’ve ever seen, one of the most forward thinking and potentially transformative businesses that I have come across. And it seems to me that business has to be central to how we move forward. We can abandon politics. Politics is not going to get us there. But if business can transform, politics will have to catch up. How did you come to be company architect of such a transformative business?

Hugo: Well I used to be an engineer in motor racing, designing and building racing cars and restoring old racing cars. It was my business. I set that up and I was interested in racing car design because it’s a very complex field, but it’s a very clear objective you have set to get around a track quicker than anybody else. But there’s so many different variables. And it’s not driven by marketing analysts or the accountants or anything like that. It’s a very pure engineering exercise and I really enjoyed that.

Manda: Were you an engineer to begin with? You’d started as an engineer?

Hugo: Well, I caught the motor racing bug when I was about 15. So I went to study engineering at university because I wanted to design and drive racing cars. But I had been interested in the environment from a much earlier age. And I remember when I was about ten years old, I knew what an ecosystem was, which most adults didn’t at the time.

Manda: Most adults still don’t.

Hugo: So I used to defend my role in motorsport over dinner with friends, in the light of my interest in the environment, on the basis that motorsport is the quickest and cheapest way to make combustion engines more efficient. Which I still believe is true. It’s a bit like a war zone. People aren’t clock watching, waiting to go home at 5:00. You can’t postpone a race. It happens when it happens and it really focuses the mind. When you have the mind focussed, productivity is greater, but particularly creativity goes up by an order of magnitude. And that level of engagement with a problem breeds a very fascinating and invigorating atmosphere.

Manda: Can I also ask, I imagine, and this might be my projection, that you’re also fairly well resourced. So a lot of exactly as you’re saying, a lot of the problems that assail ordinary businesses of being hampered by the marketing department, and everybody is just basically there toeing the line and doing as little as they can get away with earning a salary. All of that is gone because you’re all focussed. You know you want to win the race. It’s a black or white, you either win it or you don’t, and you want to win it. And you’re not as worried as we would have been in veterinary academia or as other people are in ordinary businesses about ‘we’re going to run out of money and then we’re finished. So we have to start earning’. Is that the case?

Hugo: Well, it is definitely a two tiered world like the rest of the world. And at the top there are some unbelievably well funded organisations. I, to be clear, was not involved in Formula One. It was my own business. It was in single seat racing cars, Formula Ford, Formula Renault, Formula three. And I think it’s fair to say that there are some people who make a lot of money at the top end of the ladder, but the bulk of motorsport is done on a cost minus basis. People are doing it because they absolutely love it and want to do it, and they struggle to remain involved. And certainly my business was a business that reliably lost money. But I had another business in the same workshops that restored old racing cars for wealthy customers and that funded the modern motor racing that I was doing. But it didn’t fund it well enough, and we were always scratching. And quite frankly, I was also, as we moved up through the motor racing ladder, the budget for motor racing goes up very dramatically as you move up, but the income from the restoration business wasn’t going up to match it. So that was a problem. It wasn’t a model I could continue with, but also I was losing interest in motorsport, the motivation wasn’t really there. And without the motivation in that sort of atmosphere, you simply don’t have an earthly chance. And the real final nail in the coffin, if you like, was that I reached the conclusion that we needed to get rid of combustion engines altogether. So making them more efficient, prolonging their tenure didn’t really stack up as a reason to remain involved in motorsport. And so I got out.

Manda: You were making that decision based on ecological grounds, not the most efficient way to win a motor race is to not have an internal combustion engine.

Hugo: No, absolutely.

Manda: That’s pretty radical. I mean, it’s radical anyway, but it would have been radical if you decided the way to win a motor race is to have, I don’t know, a rocket propelled jet. And then you’re definitely going to win. Steering and braking might be a bit of an issue, but you might win.

Hugo: No, it was definitely the environmental issues that I recognised. We needed to move on from combustion engines altogether. And I thought the only future for sustainable transport was better batteries. And that’s basic science, big labs, big corporations, not my sort of world at all. And I now know that it’s not possible. Unless we find a new element between lithium and hydrogen in the periodic table, we’re not going to have a fundamentally lighter battery. Okay. We’ll get a little lighter and their their cycle life will improve slightly. But you’re not going to get a 1000 kilo battery down to 100 kilos, which is what you need to do to have a truly sustainable car in my view. And so I got out not knowing what I was going to do, but I knew it was going to be nothing to do with cars. And I definitely wanted to remain in the private sector. I feel, as you said in your intro, that business absolutely needs to lead the way through the transition that we’ve got to navigate. And so I was treading water and went and did an MBA at Cranfield, knowing I’d disagree with most of what I was going to be taught, which I did. But but I felt I ought to speak the language a bit better. And just before I went there, I did a course for three weeks, one week of which was with Paul Hawken, who wrote a book called The Ecology of Commerce that I’d read in the early 90s.

Hugo: And he was also working at the time on a book that came out a couple of years later called Natural Capitalism, with Amory Lovins from the Rocky Mountain Institute. And we went rock climbing for a day on the Devon coast and he was telling me all about fuel cells, and I’d never heard of a fuel cell before. I had no idea. And the work of the Rocky Mountain Institute in what they called hypercars. Then I realised that the technology existed, but you just needed to make an entirely different sort of car. The pattern of relationships between all the components in the car needed to be completely different, and that systems integration is really where the big leap is available and the big opportunity. And that’s what motor sport’s all about; systems integration. It’s about optimising the whole system rather than trying to optimise the bits in the system. And of course, the auto industry isn’t in a position to throw the baby out with the bathwater and rethink the car from the ground up. So this was an opportunity that I felt I could really step in.

Manda: Okay, so there’s several threads I want to go on. At some point I want to explore single passenger cars, but let’s leave that aside for the moment and go into: can you unpick for us the difference between a catalytic fuel cell and burning hydrogen as an energy source? Because it seems to me there’s quite a lot of BP and all the other delightful fossil fuel companies getting to the point where people don’t want methane pumped into their houses anymore, because it’s not necessarily a grand thing. And we’re busy telling you the cow eructates, it’s going to destroy the planet, but it’s okay to keep cooking on methane. The cognitive dissonance of that will get through eventually. So they’re saying, okay, we’ll just pipe some hydrogen with the methane and then it’ll all be fine. And everything I’m hearing is that’s going to burn and create oxides of nitrogen that are many, many, many times more greenhouse gas potential than methane or carbon dioxide. So that’s not a starter. Can you explain the physics and chemistry of why that is different to a fuel cell?

Hugo: Yes, absolutely. And a fuel cell I mean, it took me a while to really understand what a fuel cell was. But the best way to explain it is to go back to the school experiment of electrolysis. We’re all familiar with the idea of a beaker of water and we put in some water and two electrodes, and you pass electricity through the electrodes. And you’re putting energy into the water to split the water molecule into its hydrogen and oxygen constituents. Water is a very low energy state. You can’t burn water. It’s lost all its energy. And this is why the myth of cars that run on water is effectively another version of perpetual motion. There is no energy left in water to extract. So when you do electrolysis, outcomes are hydrogen, oxygen, and that energy’s been put in, split the molecule and created two very high energy molecules, H2 and O2. And when they combine they normally go bang and give off the energy as heat. 

Manda: Okay. This is how the Hindenburg goes up. It’s exciting and there’s a lot of flames.

Hugo: Well yes. There’s more to that story than meets the eye. And it was really the kerosene and the aluminium oxide, not the hydrogen that burned.

Manda: Oh really?

Hugo: We can visit that later. In a fuel cell, on the other hand, you put the hydrogen and oxygen back into effectively the same device that you electrolyse the water in. And you make the same reaction happen, but in reverse. So you allow the hydrogen and oxygen to combine, but without burning. So it all happens at very low temperature. In an automotive fuel cell it’s sort of 60 to 80 degrees centigrade it’s happening at. There’s no combustion at all. And because it’s the same process in reverse, out comes electricity and water. The opposite of hat you put in to the electrolyser. And that process is about twice as efficient as burning hydrogen in a combustion engine. But also there’s no combustion, which means that the NOx issue you’re referring to doesn’t happen. When you have NOx coming out of the tailpipe of any combustion process, it’s not a product of the fuel. Petrol has got no nitrogen in it. So burning petrol can’t produce any NOx, which is a nitrogen oxide.

Manda: But the air has nitrogen in it.

Hugo: Yes. The NOx comes from the air. You’re burning the air that’s going through the process. And it’s an unfortunate unintended consequence because you’re not really getting much energy out of that. You want to burn the fuel, not the air. But unavoidably you do burn some air and that creates NOx, which creates the problem and many problems of its own. But in a fuel cell, you have no combustion, you don’t heat it up hot enough for any nitrogen to oxidise.

Manda: Okay, let’s try and keep this simple. I just want to explain for people listening that NOx is NO with an x for the number, because it can be nitrate or nitrite. It can be NO2, NO3. Let’s go a little bit deeper into this. Air is 18% oxygen 80% nitrogen and the remaining 2% is other stuff, some of which is CO2. And in my head and I think a lot of the ‘we’re just going to burn hydrogen and it’ll make water and that’ll be fine’ brigade, who want hydrogen to be the answer to everything; it seems to me that when you combine hydrogen and oxygen in a hot atmosphere, inevitably some of the nitrogen is going to oxidise. That’s the nature of combustion in an 80% nitrogen air mixture. How do you manage to make sure that combining two highly combustible things, which is hydrogen and oxygen, everyone’s very, very careful not to have anything around oxygen in an operating theatre because otherwise it goes up with a big Bang. And hydrogen’s even worse. How do you manage to take those two high energy gases and not allow combustion to happen. How do you prevent combustion from happening?

Hugo: In combustion, you need a heat source to perpetuate the reaction, and the gases need to be in contact with each other and mixed, in fact. In a fuel cell, they never actually mix. So the hydrogen is fed in through one side of a membrane and the oxygen, the air, on the other side of the membrane. And this is getting quite technical, but what happens is that we have platinum very finely divided on the hydrogen side of the membrane, and that ionises the hydrogen. So it splits the hydrogen molecule into two hydrogen atoms, which are positively charged, and two electrons. It separates the molecule into these constituent parts. The hydrogen proton can go through the membrane to the other side, but the electrons can’t. And basically there’s a voltage gradient that’s pulling the electron in the other direction and pulling the hydrogen proton through the membrane. They’re pulled in opposite directions. And the hydrogen proton goes through to the other side where it can combine with an oxygen atom.

Hugo: And the electrons that are needed to complete the party and make a water molecule has to go all the way around the circuit, the outside of the fuel cell, through the electric motor, and come back in the other side to combine with the oxygen ion, the hydrogen ion, or two of them, and create a molecule of water.

Manda: And this is how you get your electricity?

Hugo: Yes. So out of that side of the fuel cell, which is the cathode side, out comes exhaust which is water. And so you have this reaction which is over 50% efficient. Over 50% of the energy is given off as electricity.

Manda: Which is hugely more efficient than an internal combustion engine as I understand it.

Hugo: Yes. So a really good petrol engine today is about 24 to 25% efficient. A diesel engine is 29 to 30% efficient. But a fuel cell, depending on exactly how you operate and exactly what power it’s operating at is, is between 50 and 65% efficient.

Manda: Wow. Okay. So we’re not creating perpetual motion, but we are doing considerably better than an internal combustion engine. So in the creation of the car, you have the fuel cell and presumably you have a battery of some sort to start the process? Or is it self perpetuating?

Hugo: No, we have no battery. It’s slightly disingenuous, because we do have a bank of super capacitors. A battery is a chemical device where there’s a chemical reaction to release electricity when you want the electricity. And when you want to recharge it, that chemical reaction has to go in reverse. And that takes time. And that’s why batteries don’t like charging very quickly. It’s easier to discharge a battery than to charge a battery, and the faster you do either, the shorter its life span.

Manda: Hence why the electric vehicles are powering themselves down all the time.

Hugo: Absolutely. And also makes quite a lot of heat in the chemical reaction, both charging and discharging. So it means that the round trip of putting electricity in and taking it out of a battery is considerably less than 100% efficient. I mean, it varies. In cold weather it can be really, truly dire. So you can see losses in the round trip of up to 40% from charge and discharge in cold weather.

Manda: And that doesn’t happen with a fuel cell? Is that temperature dependent as well?

Hugo: No, it’s entirely independent. Like a petrol engine it’s independent of temperature. It does have starting problems like a petrol engine. If you leave a car outside with no antifreeze in the water, you’re going to damage the engine and you’ll damage a fuel cell likewise. So in very cold temperatures, sort of minus ten and below, you have to do something to preheat the fuel cell before you turn it on. Otherwise you can damage it.

Manda: Okay.

Hugo: Once it’s running, it generates enough heat to keep itself at its optimal operating temperature.

Manda: Okay, so the obvious question that’s arising just now, I want to know more about the car, but the obvious question is why has the entire motor industry gone down the electric vehicle route and not down the fuel cell route? Because you’re much more efficient. It doesn’t require that we undertake deep sea mining to find the lithium from relatively untouched ecosystems. There seem to be no downsides. Why is it that we’re all being flooded with electric cars and trying to work out how to charge them when we could be using fuel cells?

Hugo: I think I might come back to that question, because I realise I stopped short of finishing my previous answer, explaining the car. So we have a bank of super capacitors. And capacitors are devices that store electricity, but they don’t have any chemical reaction. They store static electricity between a positive and a negative side, with an insulator in between. And because there’s no chemical reaction, you can throw the static electricity in very quickly and take it out very quickly and very efficiently. So the round trip efficiency is over 98%. And also in our capacitors we can we can put up to 1000 amps through one of our capacitors. So they charge very very quickly. And we essentially with a fuel cell create electricity on demand. It doesn’t need to be stored anywhere. We have electric motors in all four wheels. And the primary source of that electricity for driving when you’re cruising at a constant speed is from the fuel cell. And you run the fuel cell to provide exactly the electricity that is being required at that moment by the electric motors, to cruise at that speed. Those electric motors, though, are also the primary brakes. Now we hear about regen braking a lot from the auto industry and something like a Prius, for instance, when you break the most you’ll recover of the kinetic energy of the car electrically into your battery is about 10% of the kinetic energy of the car. And that’s because you’ve got electric motor on the front wheels and not on the back. So you’ve got to use friction brakes at the back, and the battery can’t charge very quickly, so the motor can’t do all the braking that’s needed at the front wheels. More braking happens at the front wheels than the back, because the load is transferred to the front when you brake. And as a consequence of that, you have this very low regen efficiency.

Hugo: Still, for the auto industry, the friction brakes are the primary brakes. They’re called the foundation brakes. The legislation is all written around them being the foundation brakes. In our case, the electric motors are the primary brakes. We sort of architecture, if you like, think about these as our foundation brakes. It’s a totally different way of thinking about them. And that electricity goes into the bank of supercapacitors, which is a reservoir where you can store not very much electricity. We can store less than one kilowatt hour in our fully charged bank of supercapacitors, but we can throw it in there and take it out very, very quickly. And when you accelerate, the fuel cell only provides about 20% of the power for the acceleration. The other 80% of the power comes from the supercaps. So it can produce a lot of electricity, but not for very long. But we don’t want it for very long because very soon your top speed and you actually want somewhere available to put the electricity in when you slow down again. So it’s a buffer that provides the power you needed, that marginal extra power for acceleration and actually for hill climbing. And when you’re braking or coming downhill, they’re being charged up. And this this allows us to think of the sizing of all the powertrain components completely differently. In a conventional car, if you want better acceleration, you need more power. So you need a bigger engine, a more powerful engine. And because of that, you have a higher top speed, whether you like it or not. They’re very tightly coupled in scientific terms. Increased acceleration increases the top speed. And and so that’s why all cars today have a redundant top speed.

Manda: Because it’s way more than would be safe to use on the road.

Hugo: Well yes exactly. But you need the power to be able to accelerate safely on a slip road, particularly if it’s going uphill, to join the motorway, for instance. And so you can’t have really feeble acceleration today. And you only use about 20% of that power when you’re cruising on the motorway. Even in a basic small car, like a Fiesta, you’ll use about 20% of that peak power when you’re cruising at top motorway speeds, 75 miles an hour or whatever. And you only accelerate for about 10%, generously, of the life of the car. So it means that the engine is 80% redundant for 90% of its life.

Hugo: It’s a brutal way of putting it, but it’s absolutely true. And the same is true of the transmission, the gearbox and all the shafts, their sized for the maximum power. And so all these bits are much heavier than they need to be for 90% of the time. But then the chassis has to hang on to these heavy bits in accidents. That’s really the governing factor in how heavy the chassis is. And so the chassis is heavier than it needs to be. And then you need more power. So it’s an arms race and it’s a vicious circle going up and up. And in our case the one weakness of a fuel cell compared with a petrol engine, and this is part of the explanation of why it’s so difficult for the auto industry to bring hydrogen cars to market, is the sheer power density of fuel cells can’t approach that of a petrol engine. Petrol engines, you get an awful lot of power from a very small box, and you can’t get the same sort of electrical power out of a fuel cell from the same volume.

Hugo: However, in our case, we’re only sizing the fuel cell for that 20% power that you need for the constant cruise. We’re not leaning on it for the other 80%. So you can have a fuel cell that’s much, much less powerful and much smaller and lighter. In our first production cars, we’re expecting that fuel cell to be less than 15 kilos, to give you some idea.

Manda: That’s a bag of horse feed.

Hugo: And that will keep the car, this is initially a two seater designed for local use, with very good acceleration to 60 miles an hour, in about nine seconds. So that means that the fuel cell is sized just for the maximum constant speed. As I said, it’s only 15 kilos. And we use these capacitors for all the transient power. Transient means the spikes, the acceleration, the hill climbing and negative spikes; so braking and descent down hills. And all that is taken care of by the super capacitors. And it does two things. One is it enables us to have a very small fuel cell. So the power density of fuel cells doesn’t matter anymore. We’ve still got the same size engine bay as anybody else has, and we only need a fifth of the power in it. So easily done with the fuel cell. But the other thing is that it means that acceleration and braking become entirely independent variables. As I said, if you want more power in a conventional car, you end up with a higher top speed. They’re very tightly coupled. For us they’re quite separate, so we can choose the maximum top speed we want and we can choose the acceleration we want. And we have very good acceleration to our top speed. You don’t creep up to the top speed, you go straight there. You just can’t go five miles an hour faster okay.

Hugo: And the third variable in this is energy efficiency. And we choose our top speed and acceleration that we want and then we optimise the whole vehicle for energy efficiency. And we can have better acceleration with the same top speed. Or we can have a higher top speed with the same acceleration. But if we do either of those we’ll have slightly lower energy efficiency. It means you can tailor the car, the powertrain, to deliver everything you need and nothing you don’t. There’s no redundancy in the system. And it leads to this virtuous circle of mass compounding. You’ve got a very light fuel cell only 15 kilos, you’ve got no gearbox and shafts, just got cables going to the wheels. And so you’ve got a much lighter powertrain. If you’ve got a lighter powertrain, you can have a lighter chassis. And then if you make the car out of carbon fibre rather than metal, it gets lighter still. And then you need less power.

Hugo: And because you’ve got much lighter weight, you can have much narrower tyres and still have the same grip. And because you’ve got much narrower tyres, you don’t need the power steering system, so you can just get rid of that. And you don’t need power assisted brakes because your leg is quite adequate to deliver the braking power you need on the pedal. And all of these things, both these iterative loops and the step changes with systems like power steering, we refer to as mass decompounding. And as you go through all this, you’re reducing the material content and you’re reducing the energy required to get around. And also a whole raft of other negatives to heavy cars, in terms of air quality from tyre emissions and things like that. I mean, your tire emissions are entirely pro-rata to mass. You have twice the weight of car, you have twice the tyre particulates in the air and in groundwater. So there are huge benefits to reducing weight and it becomes safer for everybody.

Manda: Right. So presumably you’re rate limiting step on the design of the actual car is safety. It has to be a certain mass and structure so that it’s basically a safe box for a person with a slightly squishy body to be in. But beyond that, if you didn’t have to have a person in there, well, then it wouldn’t be a car. But you could you could design it to be very sleek. But it seems looking at your website that your drag coefficient is, is way, way down. And is that because there’s less mass? Or is that because you’ve done innovative things in aerodynamics as well.

Hugo: That’s purely aerodynamics. I mean, there are cars with a lower drag coefficient out there now, but not at the size we’re at. It’s much easier to get good drag coefficient on a bigger car. And so we’ve got a very, class leading I’d say, drag coefficient of a car so small. And we have a completelysmooth undertray. We haven’t got exhausts and all these little dingly dangly bits underneath the car. It’s a completely smooth undertray. And the design of the profile underneath the car is almost as important as the upper surfaces of the car. We’ve got a huge venturi, if you look at it from behind, and all these things are about reducing drag. Now, it’s important to point out or even admit that this is not the car we’re taking into volume production. It was never briefed to be a usable everyday car for mass market use. It was really to develop the technology and to show it off, quite frankly. So the brief didn’t have things in there that are in the brief for the car we’re working on now for volume production. And the three key things, I suppose are that we want a seat that’s a couple of inches higher, so it’s easier for older people to get in and out. It’s a very low car. And we want better rear three quarter vision. It’s a bit like a sports car which is no good in London traffic for instance. And finally a bigger boot. And so the powertrain that we’ve developed is the powertrain that’s going into the production car. The construction methods we’ve pioneered are all how are we going to build the new car. And so really finalising the production car is a packaging exercise on the technology that we’ve already developed and proven.

Manda: Because the original car, the one that you brought when I met you at Craven Arms way back before Covid, looked like a Delorean. I mean, it was very smart, but it did look like a racing car. So we’re going to end up with one that middle aged ladies, which I still count myself as, although probably on the upper end of that, could go and get the horse feed and and bring it back. Stick the dog in the back and it would all be safe and driveable. So the big question, multiple big questions, starting off with what is the top speed and the acceleration? Because my inner geek wants to know these. But how do people go about getting one? How soon is this going to be in production? Before that though, I have another question, which is why have you not been bought out by BMW or one of the Japanese firms? I would have thought this is honestly, the whole panic at the moment is we haven’t got enough lithium for batteries. Everybody wants an electric vehicle that there isn’t enough lithium in the world to do that. Why are all the big companies still going down the electric vehicle route?

Hugo: That’s a very interesting question and many dimensions to it.  But I might step back to when I first started looking at this and I realised, as I said, that we needed to make a different sort of car. And the technology exists, but also I recognised that the real barriers aren’t technical. As an engineer, I can see how you could do it. The barriers are to do with people and politics and inertia in our systems. And I did a commercial feasibility study on bringing this to market in 99, in my MBA, to look at all those barriers. And I did it as a purely academic exercise, I have to say Manda, because I thought you couldn’t do it without the auto industry’s support and their clout. And you couldn’t do it with them because it would be commercial suicide. I mean, this was really rethinking the whole business model of the industry from a clean sheet of paper and existing material businesses can’t do that. They don’t have that freedom. They have huge exit barriers from what they do. And the more mature an industry. The more true that is.

Hugo: And I’m talking about the business model, the manufacturing model, the distribution model, the customer proposition. All these things, I believe, have been shaped by the 20th century and by petrol engines and so on. And it’s led us to a very, very highly refined model. I don’t think there’s a product on the planet that’s remotely as good value for money as a modern motor car, with all the complexity and refinement that it offers. But it is unfortunately completely unfit for purpose in the 21st century. And there are huge exit barriers from all these investments that are made in delivering the products that the industry produces, and they can’t just write them off. It’s harder always for industries to change business model than technology even. And I believe that the change in business model of the industry is as important as a change in technology, if we want to have sustainable transport. And they just can’t do that. So that baggage, if we were to partner with a major manufacturer, that baggage would become our baggage. Because for them to have an interest in us, we’d have to do something that’s useful for them that they could adopt.

Hugo: And all those constraints that we’ve avoided by having a clean sheet of paper would suddenly pour onto our problem solving areas. We wouldn’t be able to continue doing what we’re doing. Our car wouldn’t make any profitable economic sense in their business model. It can’t be made in the manufacturing capacity that they’ve got. And so we’ve got a very good working relationship with some of them, particularly with Toyota. We have a shared interest in seeing hydrogen come to market. But I don’t think that any of them think that they could do what we’re doing. I mean, there’s plenty of very bright people in the industry. They understand what we’re doing, but it wouldn’t really suit them. And I think that they are caught in a position where the only way forward is incrementally to adopt hydrogen into the sort of technology and business that they’ve already got. And that means the hydrogen technology has to be pushed way beyond its comfort zone, way beyond the state of the art, to be able to behave like a petrol engine, because a hydrogen fuel cell really doesn’t do that very well.

Manda: Whereas you’ve done it differently.

Hugo: At developing that technology to a much higher state of performance than it is at the moment. They need the 100% of power to put in their car. In a big, heavy car, by the way, too. And so it wouldn’t really make sense for them to bother with us. Quite frankly, they’d prefer to see our approach just wither and die.

Manda: It would be like Google buying out one of the competitors to DeepMind in order to shut it down. They would buy you up in order to just crush you, so that nobody could get the idea that this might be possible. Because what you have just described is why we are where we are, why we are on the verge of the sixth mass extinction and racing towards tipping points. It’s because the inertia in the system of business as a whole does not allow the innovation of which humanity is capable. It’s horrible and terrifying and we could get lost on that. Let’s not. Let’s take a slight step off the tracks and look at your other innovation, which I think is even more exciting and which would potentially provide an answer to the problem we’ve just defined. Which is your Future Guardian governance model. Because if every business on the planet were to incorporate that tomorrow, then they would behave very, very differently, I think. So can you tell us how you took a blank sheet to business as a whole and worked out a transformative way of doing that also?

Hugo: Yes, we talk about three levels of design here at Riversimple. And this is the design of the product, this is a design of the business model and all the strategies, which to my mind is still a design exercise. And design at the level of purpose, governance, sustainability. And so corporate governance are how we are structured is the bit of that high level D3 as we call it. I met somebody from the head of the design council who said that design is increasingly talking about three levels of design. D one, two and three. D one is the product design, D two is design at the level of systems, and D three is ideology. And he said we were the first people he’d come across who were designing simultaneously at all three levels. And the reason you have to is because they all interact, and it really brings home to me the power of Einstein’s quote, that you can’t solve a problem from the same consciousness that created it. And I don’t believe that our business model and our products would have been developed in a conventional corporate structure, which has a primary fiduciary responsibility to shareholder value. And the business model we’ve created makes sense in business terms, but it wouldn’t come out of an entity that has that primacy of shareholder value.

Hugo: So let’s talk about the business model initially, because that’s the level between the product and the governance. And as I say, all these levels interact. So the reason I mentioned earlier that I think the business model needs to change as much as the technology, is that if you sell cars, you make more money by selling more cars. Sort of obvious truism, but it does mean that you’re rewarded incentivised to maximise resource consumption. And I, for one, don’t see how we can ever have a sustainable industrial society based on rewarding industry for the opposite of what we’re trying to achieve. It’s just not very bright.

Manda: Yep.

Hugo: Business models were shaped by the the business environment within which we work, and the primary constraints were limited to technology and labour and so on, in the 19th and 20th century when our the business models of today developed. But the primary constraints in the 21st century are not technical or labour. They’re environmental really. Resource depletion, climate change and the regulatory response to those problems. And just like it’s easier to design a car for a hydrogen fuel cell than to try and persuade a hydrogen fuel cell to work in a car that’s designed for a petrol engine, I believe it’s much easier to design a business model to suit the 21st century, than to tweak a business model that was designed to do something fundamentally different. And again, it’s a clean sheet of paper issue and I think it’s a it’s a harder one for existing companies to do than to swap technologies. I mean, the industry is making battery electric cars, but I don’t see that it’s going to be very easy for them to shift to a true ‘mobility as a service’ model. And when I say a true mobility as a service model, mobility as a service is a catchphrase that’s used widely now in the industry. But it means a lot of different things to a lot of different people, quite frankly. And in our case, and it’s really circular economy taken to a logical end point.

Hugo: The two key things are well, I’ll start off just describing later what it’s like for the customer. We will never sell a car, we only ever sell a service. It can be a shared car, or it can be a personal car that you keep at home and it’s ‘your car’ in inverted commas. Which will be very like how most people get cars. 90% of new cars now are sold under finance and and typically a three year contract. And the customer pays pays a monthly fee for having the car and and can either buy it at the end of three years or give it back to the manufacturer, who then sells it into the second hand trade. On top of that, customers have to deal with things like tires and insurance and obviously fuel, a big one there. And in our case, we will provide a car under contract, typically a three year contract. So it’s similar to that extent to a PCP or a lease, but it has a fixed monthly rate and a mileage rate, like a usage rate on a phone. And that monthly direct debit goes out and is the only transaction you have in having the usership of a car. It covers everything. So it includes not just the maintenance but insurance and fuel.

Hugo: And so when you fill up with hydrogen, you don’t pay, we do. The bill comes to us. And so all those operating costs are internalise. Your costs of driving are entirely predictable. You’re going to do 10,000 miles a year, you will know up front how much it’s going to cost you. The second thing is at the end of the contract, the car comes back to us and we don’t sell it into the second hand trade. We provide the second or third or fourth hand customer, and the monthly rate goes down as the car gets older, the mileage rate stays the same. And we believe that the long tail of the market is a lot longer than the industry would have you believe. And people who are buying a car more than about seven years old aren’t buying for the latest sexy model, they’re buying for price, reliability and functionality. Irrespective of age, the condition of the car is much more important.

Hugo: If you take a ten year old car from us, you’re the fourth hand user of a ten year old car, it will still be as reliable as a new one, otherwise we wouldn’t supply it because we’re responsible for that. So it means that even for the fourth hand user of an older car, their costs of motoring are entirely predictable, they don’t bear the risk of a component failure taking the car off the road. And it also means that we have aligned our interests. And this is probably the single theme that brings together all our business strategies, is alignment of interests. We’ve aligned the formerly opposed interests of manufacturer and customer. If you sell cars, your interests are obsolescence and high running costs. The average mark up on spare parts in the industry is about 1,500%. Yes, it’s terrifying, isn’t it? Much more money is made on spare parts in the first few years of a car’s life than on the sale of the car, generally.

Manda: 1500 %! Okay, I am officially in shock. And also the second hand car market. As someone who’s only ever bought second hand cars, it’s terrifying. Until you find someone you can trust to not be selling you a heap of junk that they’ve managed to somehow pretty up and look like it’s going to run, you’re buying a black box that is going to cost you money. The only question is how much? And so you’re freeing up that. The second hand car market will be as reliable as buying the new car. Are you going to have a network of engineers, car fixers around the country where if something happens, I can go and get it fixed? Or are they all just going to, you know, I send it back to you and you send me a new one, like Apple does. You know, effectively I get another third hand car for the one that just pranged. 

Hugo: Well a prang it might be, depending on how big a prang. No, it would be your car we’d repair it and so on. We will certainly maintain it and service it. We developed all our own telematics platforms, so we know much more about the condition of the card than the driver does, and it will flag up issues. We will know at least as soon, if not sooner, than the driver about any problem. It means that our maintenance can be scheduled according to the health of the car, rather than just time period or mileage or anything like that.  Also the car is designed for this model. This is why I say the business model and the technology interact. So the car is designed for this model. It has no moving parts other than the wheels. So there’s no mechanical wear, there’s no lubricants and no oil changes. All the structural materials are inert, so there’s no corrosion, another thing that takes cars off the road. And the third thing is that there are components that do degrade, like the fuel cell, but they’re all designed to be service items. So that as the fuel cell degrades, which it does gradually over its life, we will replace the fuel cell in the car.

Hugo: And there’s a lot of recoverable value in the fuel cell. So it’s not thrown away it’s refurbished. And those three things between them mean that we we can quite confidently model our future production on a 20 year car life. The average car life in the UK is 14.5 years. So 20 years doesn’t sound that much more. And really we can keep the cars going longer than that, but it’s really a matter of our choice as to when to take the car off the road and recycle the car. But because iwe know it’s going to be ours at the end of life, we design it for maximum recovery of value. Not just raw materials, but components that can be refurbished like fuel cells and electric motors. And they’re much higher value than than just the raw materials. And for the industry, end of life liability is regarded as about a €200 liability under EU legislation at the moment. But for us it’s a credit. We also design it to maximise the length of the revenue stream. Our interest is longevity, not obsolescence.

Manda: Right. You want these cars on the road 30 years from now to be just as happy as they were on day one. And presumably you can update the software. So if somebody, I don’t know, an AI that can talk to you while you’re driving or whatever, you can just update the software in the car and the structure of the car carries on exactly as before.

Hugo: Absolutely. The software evolves rapidly all the time, and will continue to do so. But our interests, unlike the industries of obsolescence and high running costs, ours are longevity and low running costs. Because we’re paying the running costs, it’s worth our while investing in efficiency, because we’re paying for the hydrogen, for the life of the car. The industry at the moment, we think efficiencies are something the industry might be keen to pursue, but we argue there’s a negative incentive commercially to improve efficiency. Because it does cost more to make a more efficient car. But customers will never pay a premium for a more efficient car. They always discount future savings almost to zero, and it means that this reduces the margin, which is very, very tight already. In our case, we’re paying for the fuel. So there’s a driver not just to comply with tailpipe emissions, but to excel on the metrics of energy consumption. And we need, I believe, to have a sustainable industrial society, we need to align the interests of manufacturers with the outcomes we as a society seek. And at the moment, as I said, they’re completely opposed.

Hugo: And because the interests are opposed, because sustainability is a cost on the bottom line, it means you need regulation as a damage limitation exercise, to rein in all these profits that are exacerbating environmental problems. If, on the other hand, you turn all these costs into a source of competitive advantage, it’s much better business. Because we’re not betting our future profits against known resource trends, for instance, and against future legislation. We’re turning all these problems into a source of competitive advantage. So we have a driver to excel in terms of resource conservation, energy efficiency et cetera. And so it’s good business sense. But it also it means you don’t need the regulation. You don’t need to regulate companies to make more profit because they’re quite keen to do that anyway. So if you turn sustainable into a source of competitive advantage, the regulation falls away.

Manda: So you will need some regulation, presumably on safety structures of the chassis or the capacity of electric brakes. I’m interested in that at the moment the industry and the regulation is geared around kinetic braking, friction braking, and you’re going to go for electric motor braking. Does the regulation even allow for that just now? Are you going to have to get someone to rewrite the regulation so that that’s an okay thing?

Hugo: You have to demonstrate the safety of the braking system. And cars are using regen braking at the moment. As I said, the Prius will only recover about 10% of the kinetic energy of the car. We can recover 55% of the kinetic energy. That’s why we’ve got four wheel motors. We want four wheel braking. And when you press the brake pedal, we don’t want to use the friction brakes except in emergencies. And so all our braking, 99% in normal duty cycles is electrical. Our brakes, actually friction brakes also come on below ten miles an hour, because it’s very difficult at that speed to get the voltage out of the motors that you need. And also the kinetic energy of the car is proportional to the square of the speed. So at ten miles an hour, there’s only about 1% of the kinetic energy left of what there was at 60 miles an hour. So it’s not worth worrying about that 1%. And finally, we want to use the brakes every time you go out so they don’t get rusty.

Manda: So at slow speeds, parking and things, you want the friction brakes. I’m thinking the software on this. I’m imagining first of all, that presumably you have smart braking. You put your foot on a pedal, but the electric engines on each four wheel will work out the amount of braking you need on each wheel, which is amazing and much less skidding likely. And lots of water on the road or ice your skid potential is much less. I’m also wondering, this is just my own obsession, are you now using AI? Or is there any of the useful AIs that can help the design of the software to make that even smarter? This seems to me that one of the ways where AI is not going to go rogue and kill us all, but we can actually get exponential improvement, is bringing AI into your design and control? Is that a thing?

Hugo: Yes, we have got a very small team with a very big agenda, and we do talk about AI and we would love to have a team looking at it. You can muse about it a little bit, but we don’t know enough and haven’t spent enough time thinking about it to really be able to answer that question well. I’m sure there are good uses of it that we will be able to apply. We haven’t gone there yet, but it is in our portfolio to be looking at before we get to production. And definitely in terms of the production ramp up, which is a much bigger team of people and a much bigger budget, we would absolutely be looking at that. There are opportunities there, but to optimise the overall product offering, I think the fundamental big bites of the cherry are ones that human brains can and have envisaged. So I think that we can make a three fold improvement in energy efficiency straight away. That’s what we’ve demonstrated. Comfortably.

Manda: Right. And that’s pretty darned good.

Hugo: But then AI can be used to optimise further. But the big leap is the architecture of the whole system. And by that I mean the business model as well as the technology.

Manda: So let’s move on to that, because I had thought we’d spend 20 minutes talking about the car, and the rest of the time we’d spend talking about the Future Guardian model. And here we are near the top of the hour. Tell us about the Future Guardian governance, because it is one of the most exciting things I’ve come across in a long time.

Hugo: Yeah. So the Future Guardian was the one bit that came along after I’d done my study at Cranfield. I mean, at Cranfield, I’d looked at all the business models and one thing we haven’t talked about is open sourcing the technology when we come to market, which is absolutely part of our plan going forwards. But when it came to actually looking at money, the actual financial aspect, corporate finance, was the bit that I had least interest in, quite frankly. And I hadn’t really thought beyond, well, you’ve got to go and raise some money and issue shares and limited company and so on. And I actually met a very interesting entrepreneur who, talking about fund raising, called Michael Fry, who said to me, well, look, you need to think about your funding journey. What’s the funding journey you want? And I didn’t really know what he meant. He said, well, just design it the way you’ve designed your business model. Think about what you’re trying to achieve. And and it’s sort of the shameful thing about really, my MBA is that I’d done the MBA and come out without really knowing what governance meant. It just wasn’t a topic.

Manda: Is that because it’s so assumed, that they think there is only one model? It’s like the orthodox economics. There’s only one way, and it has to be profit motive, so we’re not even going to discuss that.

Hugo: I think also in the academic world, in business schools, unlike academic science, and even that’s not quite as pure as it might be. But certainly in business schools, they’re designed to support graduates from businesses to give them some further education. Even when you look at corporate governance, they don’t have a clean sheet of paper to look at the fundamentals of corporate governance. Any structural problem, and I’ve mentioned the primacy of money before; I think that the primacy of money and shareholder value trumping the interests of society is a fundamental problem that it is not within the mandate of academics in business schools to look at. Because you can’t go to an existing business and ask them to restructure and eliminate the primacy of shareholder value, because it means people giving up all sorts of rights, which they’re unlikely to want to do. So the only time you can really re-envision corporate governance is when you’re starting with a clean sheet of paper. And that’s why we’ve been told for many years, why don’t you just build the bloody car and then go and worry about your fancy ideas later? But of course, once you’ve got a business building cars, it’s too late to start unpicking corporate.

Manda: Because your shareholders want their return.

Hugo: Well, I have no problem with the shareholders wanting their return. I absolutely agree they should do. But I don’t believe that the business’s primary duty should be to shareholder value. It is not a very good proxy for the interests of society. And I think it is truly extraordinary that we have this situation whereby in the last few hundred years, we’ve recognised the fact that there are things that technically could be done, that need to be done for the interests of society, but individuals can’t do. And the protection of limited liability is something that society has agreed to offer to groups of people to do things in order to further society’s interests.

Hugo: And there’s a reason why limited liability is offered. It’s a free insurance policy for anybody who wants to go and make themselves rich. Now, why should society underwrite a free insurance policy for anybody who wants to enrich themselves without a reciprocal benefit? And the benefit is you should be doing something in society. And that bit was really hardwired into the original American Constitution. I mean, our abuse of the corporate charter is often cited as being one of the key reasons for the War of Independence. The corporations, when they were granted the protection of limited liability, it was only for 20 year period. There was no automatic right of renewal. They couldn’t operate outside their own state. They couldn’t own another corporation. The license could be revoked at any stage if they were deemed not to be operating in the interests of society. And then gradually, that got even more firmly entrenched until the Civil War came along. And both sides just wanted munitions. And all the legislation was just given away to the benefit of the arms companies. And then Lincoln was assassinated. Ulysses Grant came to power. He was a bit of an alcoholic anyway, but he was also totally in league with the arms companies. And so one of the key things was that corporations were specifically excluded from the protection of the Bill of rights, because corporations have no limited life span, which people do. And in 1886, the Supreme Court finally caved in and gave the protection of the Bill of rights to corporations. And so it’s all gone a bit pear shaped in America, I think.

Hugo: But the very simple thing that I struggle with is that it is a huge privilege, limited liability. And why should society give that privilege for free to anybody to do anything they like and be prepared to pick up the tab? It’s got to be some sort of responsibility to deliver benefit to society. And that bit’s been completely lost. And I find it weird that it isn’t questioned.

Manda: So much isn’t questioned. We’re going to run out of time, and I so want to know more about the Future Guardian governance. I hear absolutely all of that. The current model is designed to enrich the already rich, and the rest of the world is falling apart as a result. What is the model that you’ve created that seems to me could mitigate that? And if it could be imposed on everybody else retrospectively, you know, it’s all politics. We could do that. But anyway, what is your model? Tell us about how it works.

Hugo: Yes. Well, it is absolutely a for profit model. And I believe it’s a better structure for investors actually. But it starting from the point of wanting to ensure that the business is aligned with the needs and interests of society and the environment. And so there are two classes of shares. So at a basic structural level, two class of shares. There’s one class of equity shares, only one class of equity shares. They’re all equal. The shares that I have in the company, the shares that investors buying into the company have, they are all the investment shares. And they all carry equity rights pro-rata to the number of shares you own. So very familiar model. But they have no direct voting rights in the company. There are only six voting shares and they’re called the A custodian shares. But they have no equity rights, they only have voting rights. And the board’s duty, as in a normal company, is to the voting shareholders. The A custodian shares. And those six shares are held by six companies limited by guarantee that are not part of our group. They are independent companies and no money flows through them, but they represent the six critical stakeholders on whom the company depends. And they are the investors, the environment, the staff, the customers, the suppliers and the community.

Hugo: And we define the community as all those bodies who have no direct commercial relationship with the company but are a relevant and affected party. So local government That’s interested in employment, bodies interested in road safety or air quality, things like that. And the board’s duty is to those shareholders, but it’s to balance and protect the benefit streams of those six shareholders. So it’s phrased differently in our articles, but it is still the primary fiduciary responsibility. And the investors have indirect voting rights in the investors control the investor custodian. So if you had 100% of the equity, you would completely control that one vote. But it’s only one of six votes. So there is no stakeholder group that can block anything that the other five stakeholders approve of. And it embeds structurally in the organisation (A) cooperation as the fundamental organising dynamic and (B) a much healthier balance in the short and the long term in all decision making. So the first one is we are often compared with a mitbestimmung in Germany, where 51% of the control is in the hands of investors, 49% in the hands of the unions. Now that, of course, embeds confrontation as the fundamental dynamic.

Hugo: And although we’re often compared with that, it’s completely the opposite end of the spectrum to where we’re at. Because if you just dig your heels in, the other five custodians will ignore you. You have no power at all. The only way to create change is to cooperate with the other stakeholders. And so I think that’s a much more productive dynamic. The second thing it does is that these shareholders don’t get involved in the day to day. It’s not a talking shop. It’s can’t be paralysed like a co op sometimes can be, in that the board still has all the autonomy of a normal board. It still can act quickly and swiftly within parameters agreed in the annual general meeting, in the strategy for the next year. As with a normal company, you have to tell your shareholders what you’re planning to do. And and if there’s something fundamentally different that goes outside what’s been agreed, we would have to go and consult with these custodians in an extraordinary general meeting to do something fundamentally different.

Manda: So let me just be clear. You have a board and you have the custodians. I had thought that the custodians were the board. But they’re separate?

Hugo: The custodians are the shareholders really. They are the shareholders. We’ve decoupled equity and control. Normally they come together. If you own 100% of the equity, you assume you have 100% of the votes. But in my mind, a company is not an entity like a table that I’m sitting at. A table you can own, an inanimate thing. But a company is a living, breathing network of relationships. It’s not a single thing. It’s got a brand, and it’s got some reputation in the marketplace and all these indefinable things, and it’s got a huge amount of commitment and input of all sorts of capital, quite apart from the financial capital. There’s a lot of public sector support of businesses. There’s there’s the customer support of the businesses. There’s the drip, drip, drip of human capital put in by all the staff. And it’s a network of relationships. It’s a living and breathing thing. And it depends on the goodwill of all those six. And we want to maximise the goodwill of all six. You can’t maximise goodwill of five of them if their interests are subordinated to the sixth.

Manda: And you also don’t want to alienate the sixth. So I have a bunch of questions arising from this. We could end up in a whole other podcast, but let’s try and be concise. So my first question is when you brought the six together to begin with, did you have to bring in external facilitators to help them find their cooperative spirit? Because we’re so used to businesses being adversarial. That was question one. And then question two, this is the really big one. This is where I think is transformative, is I am imagining being a member of staff in a company where I know that the person who represents the members of staff has a one sixth input to how the company runs or living close to it. It seems to me that if some of the huge companies; Ikea, Patagonia, Apple, any of the big ones, Google, meta; were to take on this model and I were to be working at those, it would change my perception of what business was overnight. In the same way that I think if I were a customer and I were to buy a car where there was a level of trust, of your interests as the person manufacturing the car, and my interest as buying the car were aligned. I am so used to buying cars where my assumption is I’m being ripped off. And wouldn’t it be utterly amazing to be buying a car where that’s not the assumption? It would transform my concept of what commerce was, and this could transform my concept of what work is or what being a supplier is. So question two really is, are you finding that the cultural and sociological impact of your model, is having ripple effects out into the wider world? That was quite a big question, but let’s try and hold it concise.

Hugo: Quite a big question. I’d love it to be the case. And there’s a little bit more indication of that happening. But I think to be honest, at the moment, the onus is on us to prove it. We’re a pre-revenue company. And I think that it has taken a while, but it’s definitely much more true now than it was. It’s taken a while for the team to really have any sense of that ownership of the business. And it’s all been a bit hypothetical and theoretical to date. Having said that, we have had some trying times, and I think there’s one instance, I won’t go into in great detail, where I think our governance model has saved the company from going off in a rather more mercenary direction, or in a very mercenary direction. Where however much we’ve got this drafted in our articles, until we’re actually in revenue, ultimately we’re vulnerable to the taps being turned off for any funding. And so whatever the articles of association say, if investors don’t support us, we would have to drop our governance model. And we were once in a situation where that potentially could have happened and it didn’t. And I think the governance model really proved itself. So keeping the company true to purpose is also part of the thing I mentioned, of a better balance in the short and long term.

Hugo: At the moment, particularly with publicly traded companies where shares are very liquid, whatever the board’s intention is and their understanding of the long term, they absolutely are at the mercy of market makers. Those in the market who play the market, who want to capture value rather than be partners in creating value. 

Manda: The vultures.

Hugo: There’s lots of really good investors out there who want to invest long term in businesses and help create value. But there are people who will use the liquidity of the market to manipulate the market. Short sellers being the sort of thing you hear about all the time. And consequently, even the best boards are driven primarily to ensure that short term, you don’t have a chink in the armour that people can lever at, and it leads to all sorts of very unfortunate situations. I mean, I think Dieselgate and Deepwater Horizon are two extreme examples, but they’re absolutely examples of where prioritising short term returns over long term benefit streams to other stakeholders, i.e. the environment and the community and so on, has won the day. These short term behaviours have been absolutely catastrophic for the investors. So we think that the model we’re talking about is a much sounder investment for investors who really want to partner in creating value. And it’s taking the concept of democracy to the corporate world. If you if you have a primacy, we regard sort of traditional model as a one party state. Now, one party state can be very dynamic and really act quickly, but in the long term, they’ve proven themselves to be as not as resilient as a democracy. And we believe that by giving voice to all the stakeholders, stakeholder engagement taken to a logical conclusion, giving all those stakeholders a voice, will actually build a much more stable business.

Hugo: But you do have to make sure that the board has all the autonomy and agility that is needed in the private sector. I could even also continue the parallel with a democracy, in that the four pillars of a democracy are the independent executive and legislative bodies, independent judicial system and a free press. And in our case, the operating board is the executive body. It’s the lower house, the House of Commons, that actually runs the company. The legislative body is what sets the direction. That’s the custodians, the shareholders. They ultimately have power over the board and they can sack them. The judicial system is what is traditionally done in a half hearted way, I believe, and compromised way, by non-executive directors. But we have a separate board, a stewards board, who for instance, appoint and sign off audits. And they are there to monitor the behaviour of the board. They don’t jointly vote with the board on anything. They’re completely independent, but they’re effectively the independent judicial system mediating between the operating board and the custodians. And then the free press is a principle of transparency for us. So we’ve all heard of the need to know basis. You can’t know anything unless you need to know it. In our case, we have a principle of transparency bounded by a need not to know basis. So anybody can know anything that they want to know, as long as there’s no commercial reason why we can’t tell them. 

Manda: Right. Hence the open source.

Hugo: So there are things we tell everybody in the business. Some things that could be used by other businesses to our negative effect. I mean, there are trade secrets and things like that. But as long as there’s no reason why they shouldn’t know it, they have the right to know it. The only people not bound by that principle are the Stewards Board, who have access to any information that the board has, can sit in on any board meeting. And it’s like discovery in any judicial case. 

Manda: In a court case. But we trust them not to be selling whatever they’re getting to Toyota, even if Toyota wanted it, which clearly we’ve established they won’t.

Hugo: They’re tightly legally bound by their duties as a director of the company. 

Manda: Okay. That’s good. So I have one last question. Because we’re so far over time, but this is so exciting and interesting. We said quite near the top that business is going to have to be part of the solution. We’ve established a belief that most businesses have innate inertia that will not allow them to do this. But then we’re back to it’s easier to imagine the total extinction of all life on earth than it is to imagine an end to predatory capitalism. But we’re just redefining predatory capitalism as business. And that what we would need in order to make the changes that you’re describing, in the timescale that I think is necessary and I would imagine you think is necessary, would be political will. And I’m wondering, have you had any interest from the political establishment of this country or any other country? It doesn’t have to be the lot currently in power, because they’re clearly not going to be in power for very much longer. Anybody in the governance system looking at what you’re doing and going, yep, we could impose this across the board and the world would change tomorrow. Is that even on the horizon?

Hugo: Well, I don’t think anybody is about to mandate that our governance model should be used elsewhere, but there are people who’ve been talking about whether it could be applied in their organisation. So we are beginning to make some headway. And also there’s a Stanford professor who spent a workshop with, who felt that the one problem that kept him awake in terms of problems facing humanity is reconciling capitalism with the needs of society. And he thought that our governance model could potentially do that. And he was suggesting that the cohort of interested Stanford graduates could provide this custodian model to young companies starting up, so they don’t all have to do it from scratch. And they could provide that facility to get companies going. So there are areas like that where it could be interesting. I do think that governments will be supportive once we’re in revenue, employing people and making a profit. Until then, I don’t think, as you said at the beginning, I don’t think that the change can be driven by government, but I think it can support once you’ve taken the initiative. We do have conversations and constructive conversations, I have to say, increasingly with people in the political sphere. And we’ve now got some really some proper support from industry leading figures. So Jurgen Meyer was the chief executive of Siemens until three years ago. He’s now our deputy chair. And he’s very active and very well connected politically. He’s deputy chair of the Northern Powerhouse and chair of the Digital Catapult. And he’s very focussed on the circular economy, on hydrogen and on the supply chain, where he believes that the fuel cell vehicle supply chain is the big opportunity for UK auto.

Hugo: So that’s that’s all very good. And also Warren East who was chief executive of Rolls-Royce until January, he’s now an advisor to the board. And both of these people are (A) exceptionally nice people but (B) incredibly experienced. And they both asked a very direct question, I have to say, but very politely and very constructively, and we are hugely grateful for the support of both of them. And we’ve got some remarkable people in our custodian body.

Hugo: Leon Kamhi, who’s head of responsibility at Federated Hermes, he’s got such sophisticated understanding of the of the role of investor in this and he’s been enormously helpful. Peter Davies, who is the future generations commissioner for Wales and really shepherded the Well-Being of Future Generations Act into being. He’s our community custodian. I could go on. We’ve got some really great people on board. So we are making progress. We’re definitely the tortoise in the tortoise and hare.

Manda: Okay, I have one final question. Answer really quickly because we are beyond over time. When does the revenue stream go on? When can people begin to, I was going to say buy a car, but clearly buying a car is not the thing. When can they subscribe? Or if they feel they want to help you along in the process? How can they best do that?

Hugo: Well, we are really grateful for any introductions to people and companies who want to collaborate with us, invest in what we’re doing, and we also have funded ourselves on crowdfunding over the last six years, and we will try and maintain the opportunity for the crowd to continue the journey with us, alongside the larger scale investment that we’re talking to people about at the moment. And the other part of your question is that we hope, all being well, that we will be in volume production in early 2027, Q2 2027. It is dependent upon the funding arriving in a timely fashion, and it’s the one bit that is not within our gift to dictate, I’m afraid. But early 2027. We also have got a fleet of our cars at the moment in beta tests, with real customers paying the commercial rate that we expect, in Monmouthshire at the moment. And it’s really testing customers perception of the value for money for what we’re offering and refining our service proposition; how we provide the car and how we support customers in the market. What they like and dislike about the car, what’s missing and it’s all informing the development of our production vehicle.

Manda: Super. And presumably we’re going to need a lot of hydrogen points where you can fill up with hydrogen, which would be a rate limiting step at the moment?

Hugo: We’ve got infrastructure partners who we are working with, and there are plenty of them wanting to invest in infrastructure. They don’t even need a subsidy, unlike battery charging. What they need is concentrated demand. So this is why we’re doing local cars, because we put a large number of cars in a small area. You don’t need a nationwide network, and it means that they’ve got a business case for making the investment. In fact, one of them says routinely, look, if there’s any subsidy, don’t give it to us, give it to the cars. Because that creates the demand to justify our investment in the infrastructure. It’s much, much cheaper at scale than battery charging, so we really don’t see that as a barrier.

Manda: Fantastic. Okay. I want you to bring them to Shropshire. It’s just right next to Monmouthshire. Almost. We could do that. All right. Hugo, this has been so exciting and so interesting. And I’m just beyond impressed at the level and the scope of your innovation. I had a whole question stream on how did the MBA at Cranfield cope with all your new ideas? But that’s a whole other podcast. Let’s let that go. Thank you so much for coming on to the Accidental Gods podcast and for doing all that you’re doing. It’s brilliant.

Hugo: Well, thankyou very much for the opportunity Manda. I’ve really enjoyed the conversation.

Manda: We’ll come back in 27 when we’ve got cars on the road. We’ll maybe do a live one in the car. That would be really exciting also. Super. Thank you.

Manda: Well, there we go. That’s it for another week. Yet again we could easily have talked on for another hour. There’s so much else I wanted to know about hydrogen production and storage and transport and availability. And so much more that I wanted to go into around the Future Guardian governance model. And how could we spread it around the world? Sometime in the future, when we’re nearer to this car coming into production, we will have another conversation for sure. In the meantime, I have put links in the show notes. If you want to explore it, please go there. Have a look. If you have any way of bringing something like this into your work, into your business, please do it. Because asking the questions is the beginning of a radical act. Why are we not giving an equal voice to our staff, to our customers, to our supply chain, to the environment? To our local and national communities. Why are we not? Why is it just the vulture capitalists who get to benefit? So that yet again we are socialising the risks and privatising the profits. And that’s what got us to here. So go on the website, see if you can get your head around what they’re doing and how and why, and then see if you have any leverage to bring this out into the world.

Manda: There is no point now in waiting for our political leaders to rescue us from the crisis of the moment. That’s not going to happen. I don’t know that anybody listening to this podcast ever thought that it would, but it quite clearly isn’t now. It’s up to us. We are the people we have been waiting for. So please go on to the Riversimple website, sign up to the newsletters, explore what they’re doing, see how we can magnify this out in the world. Thank you.

Manda: And that apart, we’ll be back next week as ever, with another conversation. In the meantime, huge thanks to Caro C for the music at the Head and Foot. To Alan Lowells of Airtight Studio for the production. To Anne Thomas for the transcripts. To Faith Tilleray for all the amazing work behind the scenes, below the radar. And as ever, enormous thanks to you for being there, for caring, for getting it, and for listening. And if you know of anybody else who would be even remotely excited about this new concept of how we can do business, or excited by the new ideas of how we could create cars that are not going to destroy huge swathes of the planet, then please do send them this link. And that’s it for now. See you next week. Thank you and goodbye.

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