Elon Musk’s Boring Company Ghosts Cities Across America

Elon Musk’s Boring Company Ghosts Cities Across America

Ted Mann and Julie Bykowicz — Read time: 11 minutes

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Elon Musk’s Boring Company Ghosts Cities Across America

The tunnel venture has repeatedly teased local officials with a pledge to ‘solve soul-destroying traffic,’ only to back out

ONTARIO, Calif.—The unsolicited proposal from Elon Musk’s tunnel-building venture arrived in January 2020. To the local transportation authority, it felt like finding Willy Wonka’s golden ticket.

Officials had started planning for a street-level rail connection between booming Ontario International Airport and a commuter train station 4 miles away, with an estimated cost north of $1 billion. For just $45 million, Mr. Musk’s Boring Co. offered to instead build an underground tunnel through which travelers could zip back and forth in autonomous electric vehicles.

Dazzled by Boring’s boasts that it had revolutionized tunneling, and the cachet of working with the billionaire head of EV maker Tesla Inc., TSLA 0.03%increase; green up pointing triangle the San Bernardino County Transportation Authority dumped plans for a traditional light rail and embraced the futuristic tunnel.

When it came time to formalize the partnership and get to work, Boring itself went underground—just as it has done in Maryland, Chicago and Los Angeles. Boring didn’t submit a bid for Ontario by the January 2022 deadline.

The six-year-old company has repeatedly teased cities with a pledge to “solve soul-destroying traffic,” only to pull out when confronted with the realities of building public infrastructure, according to former executives and local, state and federal government officials who have worked with Mr. Musk’s Boring. The company has struggled with common bureaucratic hurdles like securing permits and conducting environmental reviews, the people said.

“Every time I see him on TV with a new project, or whatever, I’m like: Oh, I remember that bullet train to Chicago O’Hare,” said Chicago Alderman Scott Waguespack. Boring had backed away from its proposal for a high-speed tunnel link to the airport there.

Mr. Musk and Steve Davis, president of Boring, didn’t respond to requests for comment.

Boring’s only tunnel open to the public is a 1.6-mile “loop experience” under the Las Vegas Convention Center. There, Teslas with hired drivers ferry convention-goers through neon-lit white tunnels at speeds of about 30 miles an hour.

Boring has yet to make good on its most ambitious pitch: that it can design tunnel-boring machines that are so fast to operate that they will drive down costs and shake up the industry. Tunneling industry veterans question some of Mr. Musk’s claims.

The company has believers. This spring, tech-focused venture-capital firms Sequoia Capital and Vy Capital led a $675 million fundraising round that valued Boring at $5.7 billion. Major real-estate firms including Brookfield, Lennar and Tishman Speyer are among the investors.

“Their technology is now past the state-of-the-art, and improving at an exponential rate,” Sequoia partner Shaun Maguire wrote in a post on the firm’s website, announcing the round.

Mr. Maguire declined to comment and the other investors didn’t respond to detailed requests for comment.

Mr. Musk has frequently criticized government regulation, calling it an impediment to building new infrastructure. At a WSJ CEO Council event in 2020, he said he had moved from California to Texas, where Tesla was building a new factory, in part because of government regulations. Government should “just get out of the way,” he said.

The Boring Co., based in Pflugerville, Texas, occupies an odd place in Mr. Musk’s business empire, which includes Tesla, Space Exploration Technologies Corp., or SpaceX, and most recently Twitter Inc. He launched the tunneling venture with a tweet in December 2016 that many took as a joke. “Traffic is driving me nuts. Am going to build a tunnel boring machine and just start digging…” Mr. Musk wrote.

“I am actually going to do this,” he added in a second tweet.

At Boring’s helm is Mr. Davis, a longtime lieutenant to Mr. Musk who came from SpaceX. Some of the space contractor’s investors have complained about Boring soaking up SpaceX’s resources, including employees and equipment purchased with SpaceX funds.

Mr. Musk’s leadership style—he recently told his Twitter employees they must be “extremely hardcore” or resign—pervades Boring, too, several former senior executives said. Boring employees work long hours and weekends, and the company has struggled to retain employees, particularly in technical positions such as engineering, they said.

For years, the San Bernardino County Transportation Authority had sought a solution to an enviable problem: Freight-focused Ontario International was steadily gaining passengers. Airport officials decided a link to a nearby commuter rail station would help it grow even more.

The authority issued a request for proposals for a light rail line, estimated to cost between $1 billion and $1.5 billion, when Boring’s pitch showed up.

The authority struck a preliminary deal with Boring in February 2021 for a narrow-diameter tunnel filled with autonomous EVs for $45 million.

“When I went to the public and shared this, the enthusiasm was overwhelming, just for something new and different,” said Janice Rutherford, a county supervisor and transportation authority board member. “And it’s the Boring Company, so Elon Musk brings that kind of sexiness to it, if you will.”

Over time, the company and the transportation authority dropped references to autonomous vehicles. By late 2021, cost projections rose to almost $500 million, agency documents show.

The authority asked for a third-party environmental review, required by state law, of the Boring proposal’s impact, records show. That’s when the process came to a halt.

“We tried to reach agreement with them,” said Carrie Schindler, the authority’s deputy executive director. “We went through the standard request for proposal process. And ultimately at the end of that process, they decided not to propose.”

Boring had powerful boosters from the time Mr. Musk declared his war on traffic in late 2016. Trump administration officials counseled the billionaire on how to pursue his stated goal of building an underground Hyperloop from New York to Washington. The Hyperloop, a concept Mr. Musk revived based on a proposal from the 1970s, calls for moving passengers through vacuum tubes at around 700 miles an hour. Despite an influx of investor interest, no commercial system has ever been constructed.

Mr. Musk tweeted in July 2017 that he had “verbal govt approval” for Boring to begin building the Hyperloop. Besieged by calls from the media and government officials, White House staff helped come up with a follow-up tweet, according to former government officials. “Still a lot of work needed to receive formal approval, but am optimistic that will occur rapidly,” Mr. Musk later tweeted.

That fall, Maryland Gov. Larry Hogan was standing at a fenced-off site affixed with Boring signs near Fort Meade and telling a videographer to “get ready” for a high-speed train from Baltimore to Washington. Mr. Hogan declined to comment.

An aide to Mr. Hogan toured a parking-lot test site at the company’s then-headquarters near Los Angeles International Airport, getting a look at a tunnel-boring machine the company purchased secondhand. Boring named it Godot, the title character in Samuel Beckett’s play about a man who never shows up.

The Republican Hogan administration sped up the bureaucratic process for Boring, granting a conditional permit in October 2017 and an environmental permit a few months later.

All Boring had to do was bring its machine and start digging, former Maryland officials said. But months, and then years, passed. Maryland was waiting for Godot.

Boring deleted the Maryland project from its website last year.

The company also captured the attention of Chicago’s then-Mayor Rahm Emanuel, who wanted a high-speed rail link between O’Hare International Airport and the downtown business district.

In 2017, Mr. Musk proposed a Hyperloop-like solution, in which 16-passenger pods would be propelled through an underground tunnel on electric “skates” moving up to 125 miles an hour. Mr. Musk said he could do it for less than $1 billion, and that Boring would finance the job and keep the fare revenue for itself.

Mr. Emanuel’s Democratic administration selected Boring to develop the system. At a press conference with Mr. Musk, the mayor dismissed “doubters,” who he said also would have questioned other landmark projects, like the 1900 reversal of the flow of the Chicago River.

Mr. Waguespack, the alderman, and other elected officials challenged the cost estimates as absurdly low, warning that taxpayers would be on the hook if Boring couldn’t build as cheaply as it proposed. “It was a lot of flash and dash and not any kind of public discussion about whether it was even necessary or not,” Mr. Waguespack said.

Mr. Emanuel said in an interview that the company had promised to assume financial risk for building the proposed tunnel. The proposal didn’t go any further after Mr. Emanuel decided not to seek a third term.

Other Boring projects announced with fanfare, including a 3.6-mile underground high-speed transportation link from the Hollywood subway line to Dodger Stadium in Los Angeles, also have failed to materialize.

Some sites where Boring once courted public attention are now abandoned. The entrance to its first demonstration tunnel sits behind a chain-link fence in a lot near SpaceX’s headquarters in Hawthorne, Calif. In the California desert town of Adelanto, where city leaders once hailed the arrival of a Boring research operation, stacks of concrete lining segments sit alongside a short U-shaped section of tunnel partially blocked off with plywood amid rattlesnake warning signs.

For the past year, Boring has been directing potential clients to its work in Las Vegas as a showcase for what systems in their cities could look like.

“We’re fans of the Boring Company,” said Steve Hill, chief executive of the Las Vegas Convention and Visitors Authority. “We’re fans of clean transportation systems that are great. So we want to help.”

The convention authority paid Boring about $50 million to build two 0.8-mile single-direction tunnels connecting different wings of the sprawling convention center. It opened in the spring of 2021. This year, Boring completed a short offshoot between the facility and Resorts World casino and hotel.

The Clark County and Las Vegas city government councils have approved a 34-mile loop of tunnels that Boring will finance. Private casino and resort owners are being asked to pay for stations. The company plans to break ground soon on segments, Mr. Hill said.

Boring signed a 50-year contract to operate the Vegas loop and will collect revenue from ticket sales, sharing a small percentage with the city and county after crossing a quarterly revenue threshold.

To get a permit to begin operating the convention loop, Boring had to run a demonstration showing that it could move 4,400 passengers an hour.

Boring passed the test and received its permit, in a category called ATS, for Amusement and Transportation Systems—the same one that local officials award to roller coasters.

Crowds strain the network of individually driven cars far more than mass transit like light rail, according to some of the former executives. In social media postings, visitors have documented the loop’s Teslas sitting, underground, in traffic. The fleet of required accredited drivers adds to labor and administrative costs.

At the convention’s jam-packed auto products show this month, visitors queued in 10 lines in a subterranean station, waiting to hop into Teslas that drivers steered through a pair of tunnels just inches wider than the sedans themselves.

Boring employees directed attendees into cars. Mr. Davis, in a safety-orange sweatshirt, paced among them and talked to convention officials who later said he often manages operations on site. When approached by a reporter, he declined to comment.

Mr. Musk has lately tweeted videos of a Boring-designed machine, nicknamed Prufrock after the title character of the T.S. Eliot poem, digging test holes in the Texas dirt. Boring says Prufrock is designed to dig at one mile a week, and that a succeeding version will be able to dig 7 miles a day.

Boring says it can improve tunneling speeds with fully electrified machines and by digging continuously, rather than stopping to assemble sections of the tunnel wall. The company also says angling machines in from ground level will help avoid the cost of first digging a shaft to launch the machine.

Veterans of the tunneling industry note that tunnel-boring machines have been electrified for decades, and that neither continuous construction of the tunnel lining nor digging in from aboveground is new.

Boring’s speed claims are “totally unrealistic,” said Lok Home, president of the Robbins Co., a leading maker of tunnel-boring machines. “There’ll be improvements here, for sure, but there’s not going to be a revolution.”

Industry veterans said that in terms of cost, factors like property acquisition, permitting and engineering work, and the sheer complexity of digging through rock or soil matter far more than tunneling speed.

As for most of the tunneling Boring has done, in the desert soils of Las Vegas, Mr. Home said, “That’s about as easy as it gets.”

Public officials across the country remain eager to land Boring projects, and some are eyeing the roughly $1 trillion federal infrastructure law as a source of potential funding.

In Fort Lauderdale, Democratic Mayor Dean Trantalis is pointing to the availability of the funding as he tries to sell the public on a $100 million pair of Boring-built tunnels that would ferry beachgoers back and forth from downtown. Mr. Trantalis said that he was awe-struck by Boring’s Las Vegas project, which he toured last year.

North Miami Beach officials want to use federal infrastructure money to pay Boring for a tunnel project to reduce traffic.

On a lark, Vice Mayor Michael Joseph tweeted at Boring and Mr. Musk in February 2021. Company officials quickly expressed interest. “They just called me out of nowhere and said, ‘Hey, this is Boring,’ ” Mr. Joseph said. “I was very surprised they responded to my tweet.”

In Ontario, the San Bernardino County Transportation Authority hasn’t abandoned its tunnel dream. The authority is seeking bids from other construction companies to build tunnels, and from operators to run electric vehicles inside.

Ms. Schindler credited Boring with introducing local officials to the possibility of subterranean transportation that might cost less than more conventional aboveground systems.

“While I’m disappointed we’re not in design at this point and headed towards construction, I’m grateful for the disruption that I think got us going in a really viable direction,” she said.

The authority said it would still welcome a bid from the Boring Co.

Write to Ted Mann at ted.mann@wsj.com and Julie Bykowicz at julie.bykowicz@wsj.com

Appeared in the November 29, 2022, print edition as 'Musk’s Boring Co. Has Cities Waiting'.

Elon Musk’s Boring Company Ghosts Cities Across America

The Wall Street Journal

ted mann

julie bykowicz

michelle goldberg

casey newton

jonathan weisman