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Musk outlines cost-cutting plan for Boring Co: cheaper, faster tunnel digging
One of the large reveals made by Tesla and SpaceX Chief Elon Musk at TED2017 was his plan to create a multi-layer high-speed tunnel infrastructure to support mobility by way of electric skates and Hyperloop tubes.
A key point that he drove home for the underground tunnel network was the integration of the system into cities.
“You have to be able to integrate the entrance and exit of the tunnel seamlessly into the fabric of the city. So, by having an elevator, sort of a car skate that is on an elevator, you can integrate the entrance and exits to the tunnel network just by using 2 parking spaces.”
Musk shared a video demonstrating how skate elevators would be integrated into city streets where they await vehicles looking to be transported through the underground labyrinth of tunnels. The serial tech entrepreneur envisions loading docks wherein vehicles would simply pull into the skate, get lowered into the tunnel network, and be sent along a slot car-like track at speeds of 200 km/h ( 124 mph). The Boring Company’s tunnel network won’t simply alleviate surface congestion, it will completely transform the way we move cars, people and freight, says Musk.
It is worth noting that The Boring Company and Tesla are under control of Musk, while the Hyperloop project has been open sourced, but with support from SpaceX.
Eliminating human drivers allows the skates to move at much faster speeds than human-controlled vehicles. Fixed routes within the tunnel network further improve safety beyond the dynamic nature of human-determined driving routes. The tunnel network is also infinitely scalable. “You can alleviate any arbitrary level of open congestion with a 3D tunnel network.” and that “There’s no real limit to how many levels of tunnels you can have.”, says Musk from TED2017.
The key barrier to creating tunnels today is the exorbitant cost. The recent 2.5 mile expansion to the Los Angeles subway system came at a cost of nearly $1 billion per mile. Musk and team at the Boring Company hope to cut the cost of tunneling by a significant amount by streamlining the tunneling process and reinventing the machines that help facilitate the digging.
https://www.youtube.com/watch?v=u5V_VzRrSBI
Building Tunnels For Less
First, the team is looking to cut the diameter of the tunnels they dig, moving from the traditional tunnel diameter for passenger vehicles of 26 to 28-feet to a 12-foot standard diameter which would be sufficient for the Tesla skate. On the surface, this might not seem like a lot, but cutting the diameter by 50% cuts the cross sectional area by a factor of four. This is significant as the speed and cost of tunneling is largely driven by the amount of cross sectional area to dig. Being able to cut out 75% of the time associated with digging comes with enormous cost savings.
Second, the team plans to attack head-on the way tunneling machines currently dig. Traditional machines dig, slowly and incrementally, then stop to install reinforcements to support the newly exposed earthen walls. Musk and team are working to install the reinforcements continuously thus eliminating the need to pause operations. This integration is expected to increase the speed of the overall process by as much as 50%.
The Boring Company tunneling machine spotted in front of SpaceX in April, 2017
Finally, the team believes that current digging machines are nowhere near their power and thermal limits, and is looking to ‘jack up the power’ to the digging machines. Doing this, the team hopes to increase the speed by a factor of 4 or 5 on top of the other improvements being suggested by Musk.
Musk also revealed that The Boring Company has a pet snail named Gary who can currently travel at 14 times the speed of existing tunneling machines. While this is more a testament about how slow the boring process is than the amazing speed of Gary, it is a fun target for the team, to be able to build tunnels quicker than Gary can crawl, and continues the comedic spin on the new company.
These tunnels could be kept at or near a vacuum to reduce or eliminate air resistance for all the moving objects within it. Curiously, Musk shared that,
“To withstand the water table, you have to design a wall to be able to withstand 5 or 6 atmospheres. To go to vacuum, you only need to be able to withstand 1 atmosphere.”
It is clear that Musk is very excited about this new Boring Company. He indicated during his sit down at TED2017 that he spends 2-3% of his time on the project, noting that it’s essentially being run as not much more than an intern project with a used boring machine and a few people dedicating partial effort to it.
Elon Musk
Tesla CEO Elon Musk drops massive bomb about Cybercab
“And there is so much to this car that is not obvious on the surface,” Musk said.
Tesla CEO Elon Musk dropped a massive bomb about the Cybercab, which is the company’s fully autonomous ride-hailing vehicle that will enter production later this year.
The Cybercab was unveiled back in October 2024 at the company’s “We, Robot” event in Los Angeles, and is among the major catalysts for the company’s growth in the coming years. It is expected to push Tesla into a major growth phase, especially as the automaker is transitioning into more of an AI and Robotics company than anything else.
The Cybercab will enable completely autonomous ride-hailing for Tesla, and although its other vehicles will also be capable of this technology, the Cybercab is slightly different. It will have no steering wheel or pedals, and will allow two occupants to travel from Point A to Point B with zero responsibilities within the car.
Tesla shares epic 2025 recap video, confirms start of Cybercab production
Details on the Cybercab are pretty face value at this point: we know Tesla is enabling 1-2 passengers to ride in it at a time, and this strategy was based on statistics that show most ride-hailing trips have no more than two occupants. It will also have in-vehicle entertainment options accessible from the center touchscreen.
It will also have wireless charging capabilities, which were displayed at “We, Robot,” and there could be more features that will be highly beneficial to riders, offering a full-fledged autonomous experience.
Musk dropped a big hint that there is much more to the Cybercab than what we know, as a post on X said that “there is so much to this car that is not obvious on the surface.”
And there is so much to this car that is not obvious on the surface
— Elon Musk (@elonmusk) January 2, 2026
As the Cybercab is expected to enter production later this year, Tesla is surely going to include a handful of things they have not yet revealed to the public.
Musk seems to be indicating that some of the features will make it even more groundbreaking, and the idea is to enable a truly autonomous experience from start to finish for riders. Everything from climate control to emergency systems, and more, should be included with the car.
It seems more likely than not that Tesla will make the Cybercab its smartest vehicle so far, as if its current lineup is not already extremely intelligent, user-friendly, and intuitive.
Investor's Corner
Tesla Q4 delivery numbers are better than they initially look: analyst
The Deepwater Asset Management Managing Partner shared his thoughts in a post on his website.
Longtime Tesla analyst and Deepwater Asset Management Managing Partner Gene Munster has shared his insights on Tesla’s Q4 2025 deliveries. As per the analyst, Tesla’s numbers are actually better than they first appear.
Munster shared his thoughts in a post on his website.
Normalized December Deliveries
Munster noted that Tesla delivered 418k vehicles in the fourth quarter of 2025, slightly below Street expectations of 420k but above the whisper number of 415k. Tesla’s reported 16% year-over-year decline, compared to +7% in September, is largely distorted by the timing of the tax credit expiration, which pulled forward demand.
“Taking a step back, we believe September deliveries pulled forward approximately 55k units that would have otherwise occurred in December or March. For simplicity, we assume the entire pull-forward impacted the December quarter. Under this assumption, September growth would have been down ~5% absent the 55k pull-forward, a Deepwater estimate tied to the credit’s expiration.
“For December deliveries to have declined ~5% year over year would imply total deliveries of roughly 470k. Subtracting the 55k units pulled into September results in an implied December delivery figure of approximately 415k. The reported 418k suggests that, when normalizing for the tax credit timing, quarter-over-quarter growth has been consistently down ~5%. Importantly, this ~5% decline represents an improvement from the ~13% declines seen in both the March and June 2025 quarters.“
Tesla’s United States market share
Munster also estimated that Q4 as a whole might very well show a notable improvement in Tesla’s market share in the United States.
“Over the past couple of years, based on data from Cox Automotive, Tesla has been losing U.S. EV market share, declining to just under 50%. Based on data for October and November, Cox estimates that total U.S. EV sales were down approximately 35%, compared to Tesla’s just reported down 16% for the full quarter. For the first two months of the quarter, Cox reported Tesla market share of roughly a 65% share, up from under 50% in the September quarter.
“While this data excludes December, the quarter as a whole is likely to show a material improvement in Tesla’s U.S. EV market share.“
Elon Musk
Tesla analyst breaks down delivery report: ‘A step in the right direction’
“This will be viewed as better than feared deliveries and a step in the right direction for the Tesla story heading into 2026,” Ives wrote.
Tesla analyst Dan Ives of Wedbush released a new note on Friday morning just after the company released production and delivery figures for Q4 and the full year of 2025, stating that the numbers, while slightly underwhelming, are “better than feared” and as “a step in the right direction.”
Tesla reported production of 434,358 and deliveries of 418,227 for the fourth quarter, while 1,654,667 vehicles were produced and 1,636,129 cars were delivered for the full year.
Tesla releases Q4 and FY 2025 vehicle delivery and production report
Interestingly, the company posted its own consensus figures that were compiled from various firms on its website a few days ago, where expectations were set at 1,640,752 cars for the year. Tesla fell about 4,000 units short of that. One of the areas where Tesla excelled was energy deployments, which totaled 46.7 GWh for the year.
🚨 Wedbush’s Dan Ives has released a new note on Tesla $TSLA:
“Tesla announced its FY4Q25 delivery numbers this morning coming in at 418.2k vehicles slightly below the company’s consensus delivery estimate of 422.9k but much better than the whisper numbers of ~410k as the…
— TESLARATI (@Teslarati) January 2, 2026
In terms of vehicle deliveries, Ives writes that Tesla certainly has some things to work through if it wants to return to growth in that aspect, especially with the loss of the $7,500 tax credit in the U.S. and “continuous headwinds” for the company in Europe.
However, Ives also believes that, given the delivery numbers, which were on par with expectations, Tesla is positioned well for a strong 2026, especially with its AI focus, Robotaxi and Cybercab development, and energy:
“This will be viewed as better than feared deliveries and a step in the right direction for the Tesla story heading into 2026. We look forward to hearing more at the company’s 4Q25 call on January 28th. AI Valuation – The Focus Throughout 2026. We believe Tesla could reach a $2 trillion market cap over the coming year and, in a bull case scenario, $3 trillion by the end of 2026…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
It’s no secret that for the past several years, Tesla’s vehicle delivery numbers have been the main focus of investors and analysts have looked at them as an indicator of company health to a certain extent. The problem with that narrative in 2025 and 2026 is that Tesla is now focusing more on the deployment of Full Self-Driving, its Optimus project, AI development, and Cybercab.
While vehicle deliveries still hold importance, it is more crucial to note that Tesla’s overall environment as a business relies on much more than just how many cars are purchased. That metric, to a certain extent, is fading in importance in the grand scheme of things, but it will never totally disappear.
Ives and Wedbush maintained their $600 price target and an ‘Outperform’ rating on the stock.
Tesla CEO Elon Musk drops massive bomb about Cybercab
Tesla Q4 delivery numbers are better than they initially look: analyst
