Founder of Riversimple Hugo Spowers: ‘We plan never to sell a car, only ever a service’

“Reduction of environmental impact is simply not an adequate goal, in that being less unsustainable is still not sustainable,” said Hugo Spowers last November at a lecture organised by the Oriel Environmental Group.

The lecture was the first to be held by the committee, which is made up of leading academics and graduate students based at Oriel College and working in the fields of energy and environmental research.

Hugo is the Founder of Riversimple, a car manufacturer aimed at pioneering the next generation of zero emission cars while also transforming vehicle ownership. He spoke at length about the technology behind his cars, which harness the power of hydrogen fuel cells, and also the business’s circular usership model.

After the talk, Professor Charlie Wilson, Frank Jackson Senior Research Fellow in Energy at Oriel College, led a short Q&A.

Hugo’s full lecture and a segment of the Q&A can be viewed on the Oriel College YouTube channel.

Riversimple is a for-profit company, and Hugo hopes that he can demonstrate that sustainable business models can in fact be more profitable than traditional ones.

“We want people to copy us,” he said. “But to do that, you’ve got to demonstrate you can make more money from doing the right thing than business as usual makes from doing the wrong thing.”

Hugo explained that Riversimple is not just about designing cars, but also about designing a system that delivers them sustainably.

He also expressed that he thinks that designing systems that deliver new sustainable technologies is the biggest design problem faced today, arguing that businesses need to adopt a “whole system design approach,” giving thought not only to technology, but also to business strategy and corporate governance.

“The purpose [of a business] defines what you’re trying to do. And that feeds down into the business models for how you’re going to do what you’re trying to do, which in turn shapes the product or service that you develop” he added.

At Riversimple, customers are charged a fixed rate for use of cars and also a variable mileage rate, including fuel. At the end of contracts, the cars go back to Riversimple, who go on to provide them to successive customers, using the same subscription model. They stay on the same balance sheet from design to end-of-life and all operating costs are internalised on the same P&L.

This model, by design, aligns the interests of the business and its shareholders with those of customers and the environment, since the more sustainable the cars are, the greater the revenue.

It also apparently influences the design of the cars themselves. “We know [a car] is going to be ours at end of life, so we design for maximum recovery of value… We design to maximise the length of the revenue stream. We design it to minimise operating costs,” Hugo said.

The Founder of Riversimple argued that the subscription model generates more resilient revenues compared to a traditional selling model, since people stop buying cars when the economy softens but they don’t stop driving them.

In the Q&A, Hugo answered questions on, among other things, shifting consumer preference towards SUVs, the compatibility of his subscription model with the nascent car sharing industry, and the UK’s industrial strategy.

Riversimple’s flagship hydrogen-powered car, the Rasa, was parked in First Quad, and attendees had the opportunity to view it before and after Hugo’s talk.