Amidst Tesla’s recent bad press, Chief Executive Officer Elon Musk prepares for another big week of news. It has been reported that the Prime Minister of India has given Musk land to test his next big idea: the Hyperloop.

The Hyperloop is a transit concept built around creating a system where capsules are propelled, using air, along a magnetic track. Essentially, there is less friction between moving parts because the capsule is levitating between air cushions and can therefore travel at high speeds. A Hyperloop will allow for speeds of up to 700 mph, but the logistics of transporting people at these speeds are daunting. Simple transportation realities like turns, which cause high G-forces, as well as acceleration and deceleration between stops need to be carefully considered with the Hyperloop before it is deemed anywhere near safe for riders. Yet, if the Hyperloop were to only ships goods, then this would not be as big of an issue. The project is moving rapidly, and CNBC suggests that the Hyperloop will be here in the year 2020.

Musk has had difficulty gaining space for the testing, however, after Indian Prime Minister Narendra Modi visited a Tesla factory in California recently, he offered Musk’s other firm, SpaceX, the opportunity to develop Hyperloop operations in India. Pune, 118 kilometers away from Mumbai, is where the Hyperloop testing will be done. The Prime Minister hopes that projects like this in the future can create cleaner transport for India. The Indian government is going to have to focus on utilizing more ‘green’ transportation options by providing incentives for things like bio-fuels and electric cars in order to avoid the kind of pollution troubles that have befouled much of China.

India’s next move is to work with Tesla to produce batteries and solar panels. Large demand there has created huge potential for Tesla’s efficient batteries. Musk could possibly set up an entire infrastructure system for India, as the country's current energy and transportation system is neither efficient nor good for the environment. First, though, Modi is trying to induce Musk to bring the Hyperloop to India.

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Musk is not the only one pursuing the Hyperloop of course – there a couple of other firms that have jumped on the concept after Must initially introduced it, but SpaceX has the resources to take the Hyperloop to commercialization faster than the smaller firms do.

The Hyperloop could change the way we think about transportation. People would no longer have to spend long periods of time on trains, and for cargo the shipping costs could be very cheap. India’s offer could accelerate the development of the Hyperloop in an area of the world that still needs significant transportation infrastructure development. The U.S. has adequate highways and air travel options, meaning that the Hyperloop would be a major development, but not necessarily one that would change the national economic outlook overnight. For countries like India, the Hyperloop would be truly revolutionary if it were successfully implemented.

Unfortunately, SpaceX is not publicly traded so investors cannot capitalize directly on this news, but it is worth watching Tesla to see if they become involved in the project in some way as that could impact investment opportunities in the market.

By Michael McDonald of Oilprice.com

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