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Open-source car firm proposes new business model

Date: 30 November 2009   |   Author: Farah AlKhalisi

British start-up Riversimple has posted the first diagrams of its hydrogen-powered city car online in a so-called 'open-source' project, whereby anyone can take and develop the design and manufacture it under licence - as long as upgrades or improvements are fed back into the communal system.

Riversimple founder Hugo Spowers says this makes financial sense for company and customers alike, as production costs are reduced the more licensees sign up. Riversimple will make money by leasing rather than selling the cars, retaining ownership throughout a 15-20-year lifespan. "At the moment the auto industry doesn't make money from building cars", he explains, "but from the brands."

It's a new relationship between manufacturer and consumer. Users, business or private, will face a fixed-rate monthly charge of £200 plus a pay-as-you-go fee of 15p a mile for this first car due 2013; it's an all-in deal covering maintenance and even fuel. The car itself comes free bar a small refundable deposit.

This type of contract should ease anxieties over hydrogen refuelling (Riversimple is working with suppliers and local authorities to establish infrastructure) as well as residual values. Expect such mobile phone-style pay-as-you-go deals to appear in the mainstream motor industry in future, whatever the influence of open-source.