Elon Musk’s Tunnel System Works, but the Real Test Is Still to Come

This week, the Consumer Electronics Show in Las Vegas was an important milestone for Elon Musk's Boring Company, which maintains an underground network of tunnels that transports people in Tesla Inc. cars around the vast convention center.

The Vegas Loop operated wonderfully, despite minor hiccups captured on video that attracted derision on Twitter for a corporation whose stated aim is to "fix traffic." Another aspect of Musk's early vision appears to be disappearing as well: the cars still require human drivers, a requirement that is unlikely to alter very soon.

Officials in Las Vegas, on the other hand, expressed satisfaction with last week's results. According to data supplied to Bloomberg by the Las Vegas Convention and Visitors Authority, the transportation system successfully conveyed between 15,000 and 17,000 passengers every day during CES, accounting for about half of the show's attendance. The Boring Company reports that the average wait time at its three stations is less than 15 seconds. The LVCVA anticipated that rides would take less than two minutes, as predicted when reporters visited the site in April.

The figures indicate that Boring Co. performed admirably, while CES did not have all testing of its equipment that some had hoped for. Due to the fact that a Covid-19 case spike significantly reduced participation and curtailed the event, much fewer individuals used the tunnels than would have done otherwise. It is unknown how the system would fare in the face of significantly increased demand.

The Boring Company's Las Vegas tunnel system's throughput and endurance are critical for various reasons. To begin, the business is in talks with numerous communities around the country, all of which are likely keen to test how the startup's technology functions in the real world before agreeing to a contract.

Second, the company's pay for the Las Vegas project is contingent on its performance at significant industry gatherings such as CES. Boring issued a $4.5 million letter of credit to the LVCVA in accordance with the terms of its contract. Boring Co.'s debt to the authority will be lowered by $300,000 for each hour the firm carries an average of 3,960 passengers for 13 hours at a big conference.

Since this year's expo drew only roughly 40,000 participants, compared to 170,000 in 2020, the lesser audiences very definitely indicate that Boring was unable to demonstrate that it could reach the contract's passenger requirement. The LVCVA said that it would not give hourly averages.

However, the agency said that the corporation met those targets during a recent test. Ed Finger, the chief financial officer of the LVCVA, told the authority's audit committee in December that accounting firm BDO certified the system transported 4,431 people per hour during a May test. That was more than enough to ensure Boring received the final installment of its $44.25 million contract payment.

The hour-long test drew more than 300 people, Finger explained. As the contract proves, Boring will conduct experiments utilizing 10% of the vehicles necessary for system capacity, along with an engineering analysis to determine what rates would be if additional vehicles were utilized. Following the testing, the county approved increasing the transportation system's Tesla fleet to 70 vehicles.

If the Las Vegas project succeeds, it may inspire other communities to enter into contracts with Boring Co. Fort Lauderdale, Florida, and San Bernardino County, California, are now negotiating their own tunnels. Boring Co. has until the end of this month to submit a proposal in San Bernardino County, where the plans remain in limbo.

"Negotiations have been difficult," Carrie Schindler, the county transportation authority's director of transit and rail initiatives, said Thursday during a public hearing. She stated that, while the Boring Company initially suggested autonomous cars, it was "no longer committed to autonomous technology," which would have an impact on the county's budget for the project's final operation. Historically, autonomous technology was a major selling feature for Boring Loop systems.