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The Boring Company testing its “Teslas in Tunnels” and Why we love it

Today, let's talk about The Boring Company testing its "Teslas in Tunnels" system in Las Vegas, financial hurdles, and why we

Last week, Elon Musk’s The Boring Company started shuttling passengers via the twin tunnels it built under the LVCC, Las Vegas Convention Center as part of a test to get the system ready for its full debut in June.

Elon Musk's Boring Company Demonstrates Transport Tunnel Underneath Las Vegas Convention Center
Source: VitalVegas

About 300 people who showed up for the test shared images (1), videos (2), and accounts (3) across the internet (4), offering us a coherent glimpse at Elon Musk’s solution for traversing the LVCC campus.

Even though, as the critics point out that it is only Teslas driving through two 0.8 miles (about 1.3 km) tunnels, yes, which is still far from the autonomous sled-and-shuttle ideas that Elon Musk proposed (5) for The Boring Company, we love it.

There are a total of three stops to the “LVCC Loop” system. The stations at either tail are above the ground, while the middle one is at 30 feet deep as the tunnels. The Boring Company has used a few dozen Tesla cars during the test, including Model 3 sedans and Model X and Model Y SUVs.

While the company had talked about making riders call for cars via an app, the test only needed them to walk up to the next available car. Test riders could then hop in and go to one of the other two stations and repeat. It seemed most riders got about seven or eight to a dozen rides during the test.

Notably, schlepping around the LVCC campus is not easy on foot, especially after the LVCVA, Las Vegas Convention, and Visitors Authority added a whole new wing. There are notoriously long ride-hailing and taxi lines.

Hence, any solution that makes it easier to get around the campus will likely appeal to convention visitors even if the amenity would cost the LVCVA 52.5 million USD, 48.6 million USD of which went to The Boring Company (6). But, we will come back to it later.

According to The Boring Company, the Loop will ultimately turn a 45-min walk into a two-minute ride. However, it is not down to that much efficiency yet, hence the test.

In one video, one of the test rides had to wait about three to five minutes for a few rides. While the top speed was about 40 mph, trips between stations seem to have taken around a minute to a minute and a half.

One of the things that caused an increase in the total travel time was the underground station. There were times when test riders pulled into it only to run into some congestion. The drivers have to maneuver around other parked Teslas, cars queuing up to reenter the tunnels, and people getting in and out. It is a tight fit.

There were also other general confusions as people got used to the working of the system. Passengers needed constant reminders to leave the doors open when exiting the Tesla to speed up the next ride transition. Notably, one person also got bonked on the head (0:57) by one of the Tesla Model X’s Falcon Wing doors (7).

The Financial Hurdles

While The Boring Company is doing its best, Nevada regulators are making things difficult for the company to meet its contractual targets.

The LVCC Loop System is supposed to use over 60 fully automated high-speed vehicles to transport 4,400 riders an hour between exhibition halls. However, according to TechCrunch (8), Clark County regulators have only authorized 11 human-driven vehicles so far, with strict speed limits and restricted the use of on-board collision avoidance tech, a part of Tesla’s full self-driving Autopilot advanced driver assistance system.

Technically, even though branded as such, Tesla’s Autopilot system does not rise to the fully autonomous level. According to exchanges between California regulators and Tesla (9), it is considered an advanced driver assistance system that can automate some functions.

The LVCVA created a contract looking at incentivizing Elon Musk and ensuring promises are met. The contract is for a set price, and The Boring Company has to hit set milestones to receive all of its payments.

The contract offers payments at different process points like completing the bare tunnels, working system, finishing a test period and safety report, and then demonstration. The final three milestones are about how many passengers it can carry in an hour.

For instance, if the Loop can demonstrate moving over 2,200 riders an hour, The Boring Company will receive 4.4 million USD, then the same payment again for moving 3,300 passengers, and the same again for 4,400 riders an hour. Together, these capacity payments indicate 30% of the fixed price contract.

The constrained system will limit the capacity to less than 1,000 instead of moving above 4,000 passengers an hour, exposing The Boring Company to hefty penalties for missing contractual targets. Notably, the company won’t generate revenue from charging riders as they are free.

According to a management agreement TechCrunch recently obtained (10), during a large trade show such as CES, the LVCC will pay The Boring Company 30k USD every day it operates and manages the system. But, the original contract The Boring Company signed in 2019 specifies a 300k USD penalty for each large convention if the company fails to move around 4,000 people per hour.

It means that for a three or four-day event, The Boring Company stands to lose hundreds of thousands of dollars which goes above and beyond the cost of running the system.

In a typical pre-pandemic year, LVCC would host about a dozen such large shows. And there is no clarity if the company is looking at other means to making money, like revenue from advertising in its cars.

Notably, the capacity issue is already costing The Boring Company money. According to the contract, if the company misses its performance target by such a margin, it will not receive more than 13 million USD of its construction budget.

The authority at the convention center confirmed to TechCrunch that, as per the contract, they are withholding the construction fee until the company can demonstrate moving thousands of people an hour.

Smaller shows, on the other hand, numbering approximately 20 a year, have no capacity penalties but offer the company a much smaller fee, 11,500 USD, as per the agreement. Additionally, the company receives a monthly 167k USD payment to keep the system working regardless of how many conventions are running.

Apart from its team of human drivers, The Boring Company also has to staff an operation center, a charging facility, and a maintenance facility. It also has to offer uninformed customer service personnel, a full-time resident manager, and security staff, as per the management agreement.

There will also be a renegotiation on the fee structure, presumably downwards, by the end of 2021 to incorporate the “expected transition to autonomous vehicle operations.”

Source: Ethan Miller / Getty Images / TechCrunch
Source: Ethan Miller / Getty Images / TechCrunch

Collision Warnings

Some of the Loop’s initial operation restraints came from the Clark County Department of Building and Fire Prevention. Reportedly, these include a 40 mph overall speed limit, dropping to 10 mph within each of the Loop’s three stations and restraint to only 11 vehicles.

Warren Whitney, Clark County Fire Department’s Deputy Fire Chief, stated that The Boring Company had told him the company could not use Tesla’s collision warning systems within the Loop. According to a transportation system certificate (11) issued by Clark County earlier this week specified that the Loop must use “manually driven” “non-autonomous” vehicles. Notably, it was issued for the planned 62 vehicles.

There has been no answer from both The Boring Company and Clark County officials regarding the operational restrictions and when they would be lifted.

Toyota had previously warned that the radar-based collision warning system might not function well within tunnels.

There is no clarity whether the Teslas can safely run “fully autonomous operation” without their collision-warning radars, even though Elon Musk has suggested and now executed a plan to remove radar sensors from Teslas and only use cameras.

Tesla Model 3 and Model Y vehicles delivered in May do not have radar sensors (12). The lack of rada sensors has urged the National Highway Traffic and Safety Administration to say that Model Y and Model 3 vehicles built on and after April 27, 2021, will no longer get the agency’s checkmark (13) for forward collision warning, automatic emergency braking, dynamic brake support, and lane departure warning. The decision also incited Consumer Reports to no longer list the Model 3 as Top Pick. The Insurance Institute for Highway Safety also said that it considers removing the Model 3’s Top Safety Pick+ designation.

Additionally, the Fire Department has concerns about dealing with emergencies within the tunnels, such as battery fires that can last several hours. Whitney points out that there have been cases where electric vehicles have caught fire without an accident. And the team, at present, only has the plan to get people out, pull back, and allow the fire to burn.

Whitney noted that the system has several smoke alarms, cameras, and a “robust” ventilation system that can move 400k cubic feet of air per minute in either direction down the tunnels. It should allow riders and drivers to escape on foot around the cars. For less serious events, The Boring Company has a tow vehicle; also a Tesla, to extract broken-down vehicles.

There has been no response from Clark County nor The Boring Company on whether the Loop would transport children or infants using car seats, wheelchair users, people with other mobility issues, or pets and support animals.

It is also worth highlighting that Firefighters have already performed multiple drills in the underground system, including simulated accidents far from a station with multiple vehicles in the way. Whitney says that “while eleven cars are doable, it may be a problem when we start increasing the car numbers. The Boring Company is a for-profit firm and is going to want to maximize efficiency. Hence, there may be further discussions as they look to increase the capacity.”

Expansion Strategies

The Boring Company wants to use more vehicles in the Loop; it also plans to expand the system.

At the end of March, The Boring Company had told Clark County that it had broken ground on an extension from LVCC station to the new Resorts World hotel. It also has permission for a similar spur to the Encore nearby.

What is even more significant is that the company also wants to build a transit system that will cover much of the Strip and Las Vegas downtown with over 40 stations connecting dozens of attractions, hotels, and ultimately airports. The Boring Company will finance the system and get the needed support from ticket sales.

Here is where Elon Musk’s tunnel system is headed if everything goes according to the plan:

Source: VitalVegas
Source: VitalVegas

A monorail may offer all the things, but it is not covering all the major attraction points. On the other hand, it is Las Vegas, people will use the tunnel, plus if a part drops off in a tunnel, no one will get hurt.

However, the viability of these expansions would depend on how soon the company can meet the operational and technological promises it made for its relatively simple LVCC Loop and demonstrate whether taxis in tunnels can generate similar revenue as they do column inches (14).

Nonetheless, the company claims that this massively scaled-up version of its underground highway would handle over 50k passengers per hour. It also claims that it plans to allow a max speed of 150 mph (241 km/h). However, the company has limited speeds during the tests so far. And even though the goal is to have the Teslas drive themselves, the system will have to rely on human drivers for the foreseeable future.

The Boring Company says that reaching that top speed is one of the crucial things that will set its “Teslas in Tunnels” idea apart from, say, a subway system. Another is cost, which the company touted in its most recent proposal in Miami (15).

However, it will be more attainable when the company can automate the driving since the tunnels can be tight for a human driver to carefully and continuously navigate at such high speeds (16).

Why Do We Love The Vegas Loop Despite The Critics Saying Otherwise

When media members were invited to try Elon Musk’s underground tunnel system recently, it took a major PR hit.

Critics tore The Boring Company, Elon Musk, and LVCVA (17). However, it appears that critics didn’t grasp the boldness and creativity of the project. We believe that it will be one of the most popular and most attractive places in the history of Las Vegas.

Let’s take a look inside Elon Musk’s futuristic-looking Loop.

Source: VitalVegas 
Source: VitalVegas

Here are some fun facts about the Vegas Loop (18):

  • Both tunnels, in each direction, are 0.8 miles long.
  • There are three stations, one underground and two at either end above ground.
  • It is about a 90-second ride between each station.
  • All vehicles are Teslas.
  • While all vehicles are completely under manual control, they can be autonomous in the foreseeable future.
  • The cars travel up to 40 mph at present in the tunnel’s straight section and up to 30 mph in turns at present.
  • More than 1,500 drivers applied for the Vegas Loop, only about 60 made it.
  • Most driver applicants failed the driving test, which required candidates to drive the entire tunnel backward within a five-minute time limit. It was put there since drivers may need to do it if a vehicle ever stalls in one of the tunnels and needs to reverse their way out.
  • Drivers get 17 USD per hour, plus tips.
  • Tesla is also developing larger vehicles that can accommodate 12 riders, further increasing the capacity.
  • While the Vegas Loop is free, when it expands to hotels and places, it will cost about five to ten dollars, according to the company.
  • Notably, the Vegas Loop construction cost about 52.5 million USD, while New York City’s Second Avenue cost about 2.5 billion USD a mile.

Let’s take a look at the photogenic below-ground station.

Source: VitalVegas
Source: VitalVegas

Critics who call the project too ambitious and nothing promised delivered, Vegas Lopp is a public relations tool that will move people around during their B2B convention, not some magical technology coming from unicorns for mass transit.

First, let’s see how everything will turn out as the project expands before we go pointing fingers. We will ask questions then, but at present, let’s take a look at Vegas Loop tunnels filled with Teslas, which looks super cool to us.

Why? Well, because they are Teslas, the project is the brainchild of Elon Musk, and it is in Las Vegas. And its stations look like a nightclub.

While conventions are incredibly boring, Vegas Loop is not.

Source: VitalVegas
Source: VitalVegas

People from across the globe will come to experience the Vegas Loop even if they are not attending a convention.

Instead of walking over 40 minutes across the campus, the Tesla ride can take people there in two minutes. And there is no doubt that the ride will be exhilarating.

Yes, it may not work well in cities with underground transportation already available or claustrophobic people, but we wish India to build something cool like this.