Future FinTech Announces Agreement to Develop Advanced Rail Transport System

Rhea-AI Summary

Future FinTech (NASDAQ: FTFT) has announced a significant Project Cooperation Agreement through its subsidiary Future Commercial Group Co. Ltd. with Innovatelab LLC to develop an advanced rail transport system. The joint venture, with FTFT holding a 55% stake, will commercialize the patented 'Vacuum Parcel' technology for ultra-high-speed rail transportation.

The technology differs from traditional Hyperloop concepts by utilizing an open pipeline with a moving low-vacuum layer, potentially achieving aircraft-like speeds while being more cost-effective than existing high-speed rail systems. The innovation is protected by US Patent No. US11,220,278 B2, granted in January 2022. The project has already completed critical model tests, including static vacuum wrap experiments and 200-meter motion vacuum wrap experiments.

Positive

• None.

Negative

• Significant capital investment required for development and commercialization
• Technology still unproven at full commercial scale
• Ambitious two-year commercialization timeline may face challenges
• Potential competition from established transportation companies and systems

Insights

Transportation Technology Analyst

FTFT ventures into ultra-high-speed rail with unproven vacuum technology, representing high-risk diversification from its fintech core business.

Future FinTech, primarily a financial technology company, has made a surprising pivot into transportation technology by securing exclusive rights to 'Vacuum Parcel' technology through a joint venture with Innovatelab. This represents a significant and unexpected diversification from FTFT's core business model.

The technology claims to solve fundamental problems that have plagued vacuum tube transportation concepts like Hyperloop by using an "open pipeline" with a "moving low-vacuum layer" to reduce air resistance. This approach allegedly addresses safety issues, construction difficulties, and evacuation problems that led to Hyperloop One's shutdown.

While the press release cites successful model tests, the technology remains largely theoretical with no full-scale prototype demonstration. Dr. Liu's credentials and patent (US11,220,278 B2) provide some technical legitimacy, but the ambitious timeline of "first commercialization step within the next two years" appears highly optimistic given the complexity of such transportation systems.

The joint venture structure gives FTFT 55% equity while requiring them to provide investment capital and external financing, creating substantial financial exposure for a company primarily focused on fintech services. This appears to be a high-risk, high-reward diversification strategy with significant capital requirements and uncertain technological feasibility.

FTFT's public invitation to Elon Musk suggests they're seeking additional validation and possibly investment, indicating they recognize the need for additional expertise and capital beyond their current resources. Investors should carefully evaluate whether this dramatic shift in business focus represents strategic diversification or concerning mission drift.

Financial Analyst

FTFT takes on significant financial risks by diversifying into unproven transportation technology with substantial capital commitments and uncertain returns.

Future FinTech's venture into ultra-high-speed rail transportation represents a material financial commitment with uncertain return potential. As a financial technology company pivoting into capital-intensive transportation infrastructure, FTFT has positioned itself to be responsible for "investment capital and external financing" in the joint venture, while holding a 55% equity stake.

This arrangement creates substantial financial exposure for FTFT shareholders. Transportation infrastructure projects typically require massive capital expenditures with extended development timelines before generating revenue. The press release provides no specific investment figures, projected costs, or revenue models, making it impossible to assess the financial impact or potential returns.

The technology remains in early testing phases, with only "model tests" completed thus far. The pathway from current status to commercial operation will likely require billions in development funding—a significant undertaking for a company primarily focused on financial technology services. FTFT's financial commitment to fund both development and seek external financing suggests potential future dilution for existing shareholders.

The press release's emphasis on inviting additional collaborators with "technology, capital and vision" indicates FTFT recognizes it cannot fund this initiative independently. The ambitious two-year timeline for initial commercialization seems unrealistic given typical infrastructure development cycles, suggesting potential future delays and increased capital requirements.

Without clear monetization plans, development cost estimates, or market analysis, this represents a high-risk financial diversification with uncertain returns and significant capital allocation away from FTFT's core business.

NEW YORK, Sept. 2, 2025 /PRNewswire/ -- Future FinTech Group Inc. (NASDAQ: FTFT; "Future FinTech", "FTFT", or the "Company"), a comprehensive financial and digital technology service provider, today announced that its wholly-owned subsidiary, Future Commercial Group Co. Ltd., has signed a Project Cooperation Agreement with Innovatelab LLC, securing the global exclusive license for the revolutionary 'Vacuum Parcel' technology for ultra-high-speed rail transportation. The two parties will collaborate to commercialize this potentially groundbreaking innovation which the Company believes is a game-changer in ultra-high-speed rail development. FTFT holds a 55% equity position and Innovatelab LLC holds a 45% position in the new joint venture. FTFT will be responsible for investment capital and external financing, while Innovatelab LLC will focus on technology and R&D.

The planned rail system is an ultra-high-speed ground transportation network that will utilize pipelines as operational tracks with the potential to achieve operational speeds comparable to aircraft as it provides a solution to the technical challenge of reducing drag in low-vacuum pipelines. The successful implementation of this technology is expected to be significantly more cost-effective than existing high-speed rail systems. In addition, it is anticipated to have a strong competitive edge in the rail transit industry through its high-speed operation, and enhanced safety and effectiveness. Furthermore, it will drive rapid development in related industries and service sectors.

Elon Musk put forward the concept of the Hyperloop high-speed transportation system in 2013, with vacuum steel tube transportation as its theoretical core. By combining maglev technology, low-vacuum pipelines and linear motor drive, it aimed to achieve passenger and cargo transportation at near-sonic speeds. Subsequently, multiple countries and regions, including China Aerospace Science and Industry Corporation, followed up with development efforts. However, the need to maintain a low-vacuum state throughout the pipeline led to various technical challenges that remain unsolvable at present. Among these, the major technical bottlenecks hindering the development and implementation of the Hyperloop system include safety operation risks caused by massive energy accumulation in the fully enclosed low-vacuum pipeline, difficulties in construction, challenges in addressing thermal expansion and contraction for pipeline connections, and problems related to passenger evacuation in case of failures. Hyperloop One, the main developer of the project based in Los Angeles, has ceased operations due to technical obstacles.

Unlike Elon Musk's Hyperloop system that relies on low-vacuum tube propulsion, the core principle of the joint venture's technology significantly surpasses conventional approaches. The technology uses an open pipeline to establish a vacuum wrapped state, with its body wrapped by a moving low-vacuum layer, so that the train can achieve low air resistance and achieve speed close to that of an aircraft. For more information about the joint venture, please visit http://skyline-express.tech.

Dr. Marvin Liu, the inventor of this technology, is an internationally renowned authority in vacuum transportation physics with a Ph.D. from Dartmouth College and over 20 years of cutting-edge research experience. The invention was granted a patent by the U.S. Patent Office on January 11, 2022 (Patent No.: US11,220,278 B2).

Dr. Marvin Liu stated, "This technology simplifies Hyperloop's vacuum tube transportation into conventional steel pipe transport, significantly reducing development cycles and costs while enhancing technical feasibility. It also represents the optimal solution to Hyperloop's current technical bottlenecks. This project will be implemented step-by-step as per careful planning to include model testing, system integration, performance limits and commercial feasibility operations."

"We have completed critical model tests including static vacuum wrap experiments, 200-meter motion vacuum wrap experiments and computer simulations, all achieving expected results. We believe this innovation not only breaks through existing low-vacuum ultra-high-speed transportation science but also serves as the key to making rail transport safe, scalable and commercially viable."

Mr. Li Hu, CEO of FTFT, commented, "The existing China high-speed rail has demonstrated advantages such as large transportation capacity, comfort and convenience, low energy consumption, speed, good safety and high punctuality. However, the demand for high-speed rail worldwide is growing stronger, and technical requirements are becoming increasingly stringent. We believe Dr. Liu's invention not only represents a leap forward in current high-speed rail technology but also serves as the key to ushering in an era of safe, economical and widely accessible ground transportation which will further meet society's demand for ultra-high-speed and convenient transportation."

"We welcome governments, enterprises and entrepreneurs with technology, capital and vision to collaborate with us. And we particularly invite Mr. Elon Musk and his team to validate or participate in this technology. FTFT will spare no effort to drive this revolutionary technology to take its first commercialization step within the next two years!"

About Future Fintech Group Inc.

Future FinTech Group Inc. (NASDAQ: FTFT) is a comprehensive financial and digital technology service provider. The Company, through its subsidiaries, conducts brokerage and investment banking services in Hong Kong, and engages in supply chain trading and finance businesses in China and efficient digital financial services. For more information, please visit www.ftft.com.

Safe Harbor Statement

Certain statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements regarding our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties, and other factors that may be beyond our control, which may cause the actual results, performance, capital, ownership, or achievements of the Company to be materially different from those implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements by our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions relating to the future.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, the risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2024 and our other reports and filings with the SEC. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise, or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements are otherwise made.

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SOURCE Future FinTech Group Inc.

FAQ

What is Future FinTech's (FTFT) new rail transport technology?

FTFT's 'Vacuum Parcel' technology uses an open pipeline with a moving low-vacuum layer to achieve aircraft-like speeds, differing from traditional Hyperloop systems by avoiding the need for fully enclosed vacuum tubes.

What is the ownership structure of FTFT's new rail transport venture?

Future FinTech holds a 55% equity position in the joint venture, while Innovatelab LLC holds the remaining 45%. FTFT will handle investment capital and external financing, while Innovatelab focuses on technology and R&D.

Who invented FTFT's vacuum transport technology?

Dr. Marvin Liu, a Ph.D. from Dartmouth College with over 20 years of research experience, invented the technology. He is an internationally renowned authority in vacuum transportation physics.

What patents does FTFT hold for its rail transport technology?

The technology is protected by US Patent No. US11,220,278 B2, granted by the U.S. Patent Office on January 11, 2022.

When does FTFT expect to commercialize its rail transport technology?

FTFT aims to achieve the first commercialization step within two years from the announcement date.

How is FTFT's technology different from Elon Musk's Hyperloop?

Unlike Hyperloop's fully enclosed vacuum tubes, FTFT's technology uses an open pipeline with a moving low-vacuum layer wrapper, potentially offering a more practical and cost-effective solution to ultra-high-speed rail transport.