• Matt Soule, co-founder and CEO of Parallel Systems, spent 13 years with SpaceX before leaving in July 2019.
  • Transporting freight by rail uses significantly less energy than transporting the same freight by long haul vehicle. Furthermore, the self-driving rail car pods open the door to micro-terminals, that have the ability to make train transit more focused in terms of products delivery.
  • On Wednesday, the pre-revenue start-up from Los Angeles will make its public debut, announcing a $50 million Series A fundraising round headed by Anthos Capital.

Three former SpaceX engineers are forming a startup to develop and manufacture electric self-powered train carriages, with the goal of improving freight rail efficiency and lowering emissions.

Electric Freight trains use far less energy than trucks. According to CEO and creator Matt Soule, moving one unit of freight by rail requires one-quarter of the energy it takes to carry it by truck, because of improved aerodynamics.

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

said CEO and founder Matt Soule

Changing the freight system from fuel to electric power might help to reduce carbon emissions, which contributes to climate change. As shown in a report released by the Environmental Protection Agency in December 2021, transportation accounts for 29 percent of total greenhouse gas emissions in the United States. Medium and heavy-duty vehicles account for over a quarter of the total.

Soule was the Head of Avionics at SpaceX when he arrived in 2006, which means “we created the electronics that helped the rocket fly straight.” Soule was waiting for a buddy, technologist, and product designer Brian Ignaut, for coffee after he departed in 2019 while watching videos on his phone. A film on freight trains was provided to him at random by the search algorithm. That got him thinking about the freight rail system’s potential as well as the need to reduce emissions.

By Thanksgiving 2019, the business’s concept was solidifying, and in January 2020, Soule and two other SpaceX workers, John Howard and Ben Stabler, launched the company.

Until Wednesday, when they unveiled the firm to the public and announced a $50 million fundraising round headed by Anthos Capital, the trio stayed relatively quiet about what they were up to.

The business is still in the prototype stage, with no clients or income. Parallel Systems will use the new amount of money to expand its fleet of rail cars, perform sophisticated testing programs, and expand its team, which was previously funded with $3.6 million in initial capital.

Parallel Systems has created multiple prototypes and tested its first-generation car on a confined track in the Los Angeles region with a workforce of roughly 25 engineers from firms including Google, Tesla, and Uber.

The cars are connected in pairs. Each pair transports one conventional shipping container, the same box that is transported into and out of ships in port towns all around the world.

The containers are transported in self-powered vehicles, however, the system will operate ideally if the vehicles are linked together. Parallel Systems sees a “platoon” of 10 to 50 self-powered freight vehicles instead of a large freight train driven by a few diesel engines, Said Soule.

Self-Powered Freight Train EV

Traditional freight trains, which can carry up to 200 vehicles or more, are much longer. Today, Electric freight trains favor length so the more a single train can pull, the less each unit of cargo costs to transport. However, Soule said that parking and unloading them is a major hassle.

For unloading and loading freight, an extremely long train needs a very large train station. This can be a concern since ports and loading facilities are frequently located in densely populated locations, such as Los Angeles, where land and space are limited.

Train platoons with autonomy might enhance train terminal logistics and save expenses.

“Because the cars self-position beneath the crane and self-clear, the terminal dwell time and necessary land capacity are substantially lower,” said Dean Wise, a former vice president of network planning at BNSF Railway and a consultant to the firm.

Having the cars electric does not always make the system completely green; as Soule clearly concedes, it relies on how the energy that supplies that section of the grid is generated.

However, although diesel trains would always produce some greenhouse emissions, an electric rail vehicle has the potential to emit none.

Furthermore, since electric rail cars consume 25% less energy than a long-haul truck, their batteries only require 25% of the storage capacity of a long-haul electric truck. The group hasn’t chosen what sort of batteries to employ yet, according to Soule, but is looking at storage technology from the utility sector.

Transitioning from his prior position at SpaceX entails getting acclimated to directing and guiding the entire organization forward, as well as becoming used to selling.

However, witnessing industry professionals respond to the prototypes has been positive, according to Soule.

“No matter how many PowerPoint presentations we give them, you can see the lightbulb go out when they see it in person,” Soule added.

According to Wise, the former SpaceX engineers have seized on a concept that others in the industry had considered.

“We brainstormed at BNSF that a self-powered autonomous rail vehicle would be a game-changer, greatly boosting rail’s ability to compete with the highway and defend against the coming challenge of autonomous trucks — now accepted by most as a question of when, not if,” Wise said.

Parallel Systems has received calls from 30 “big firms” in the field thus far, according to Wise, including class one railways, shortline rail holding companies, motor carriers, ocean carriers, ports, and industrial shippers.

“The conclusion for me was that these interactions were always favorable and discovered more value, enhancements, and future uses,” Wise said. “As a result, multiple firms have sought strategic development collaborations and investment opportunities with Parallel.”