The financial pickle facing Elon Musk’s Las Vegas Loop system

Restrictions put in place by Nevada regulators are making it difficult for The Boring Company (TBC) to meet contractual targets for its LVCC Loop, Elon Musk’s first underground transportation system.

The Loop system at the Las Vegas Convention Center (LVCC) is supposed to use more than 60 fully autonomous high-speed vehicles to transport 4,400 passengers an hour between exhibition halls. However, TechCrunch has been told that Clark County regulators have approved just 11 human-driven vehicles so far, set strict speed limits and forbidden the use of on-board collision-avoidance technology that is part of Tesla’s “full self-driving” Autopilot advanced driver assistance system. Tesla’s Autopilot system technically does not rise to the level of fully autonomous, even though it is branded as such. It is considered — even internally, according to exchanges between Tesla and California regulators — an advanced driver assistance system that can automate certain functions.

LVCC’s parent body, the Las Vegas Convention and Visitor’s Authority, created a contract aimed at incentivizing Musk and ensuring promises are met. The contract is for a fixed price, and TBC has to hit specific milestones to receive all of its payments. The contract provides payments at different points in the process, such as completing the bare tunnels, the entire working system, finishing a test period and safety report and then demonstrating it can carry passengers. The final three milestones relate to how many passengers it can carry. If the Loop can demonstrate moving 2,200 passengers an hour, TBC will get $4.4 million, then the same payment again for hitting 3,300, and the same again for 4,400 passengers an hour. Together, these capacity payments represent 30% of the fixed-price contract.

Leave a Comment