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Elon Musk’s Boring Company extracts TBM segments as tunnel debut nears
On November 27, a large crew of Boring Company employees and contractors converged upon the company’s Praire Avenue work site, home of a number of recent milestones for the tunneling startup’s 2-mile long test tunnel situated beneath Hawthorne, California. Just a handful of blocks away from SpaceX’s main rocket factory, The Boring Co. completed the removal of its first tunnel boring machine (TBM), allowing the company to begin cleaning up the site, preparing it for the installation of a brand new elevator shaft capable of transporting vehicles or custom sleds into or out of the tunnel.
The extraction of Godot, the tunneling startup’s first TBM, was shared by the company on its official Twitter account. Godot is a conventional TBM, and during the company’s information session earlier this year, Elon Musk noted that the machine would be succeeded by Line-Storm, which is “essentially a hybrid between a conventional boring machine and Proof-Rock, a fully Boring Company-designed machine.” Being electric-powered, Proof-rock is expected have 3x more power and operate 10-15x times faster than Godot.
Godot (our 1st TBM) is out of the ground! Getting excited for Hawthorne test tunnel opening in a few weeks pic.twitter.com/5DF2sDtmIo
— The Boring Company (@boringcompany) November 28, 2018
On the same day as the TBM removal began, news broke that The Boring Company had settled with a number of Los Angeles-based complainants and chosen to cancel a proposed extension of the test tunnel expected to run under Sepulveda Boulevard. Counter to a narrative coming out of several media outlets that TBC had effectively canceled an important tunnel against the company’s will, Elon Musk clarified that the actual explanation for the change in plans was largely positive, with the company believing that it no longer needs additional practice thanks to experience gained through the construction of its first test tunnel.
Instead of pursuing the Sepulveda tunnel extension, The Boring Company instead believes that it can and should move directly to a more ambitious network of tunnels to crisscross subterranean Los Angeles, known as the Dugout Loop thanks to the inclusion of Dodger Stadium as a primary destination.
This is completely backwards. Based on what we’ve learned from the Hawthorne test tunnel, we’re moving forward with a much larger tunnel network under LA. Won’t need a second test tunnel under Sepulveda.
— Elon Musk (@elonmusk) November 29, 2018
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Amidst the Boring Company’s preparations for the December 10 opening party of its Hawthorne test tunnel, the site of the Prairie Ave pit, which is expected to be the location of the Boring Company’s prototype garage-elevator concept, has shown lots of activity. Just recently, Teslarati photographer Pauline Acalin was able to capture images of multiple semi-trucks loading and transporting extricated TBM segments.
Based on the photographs we acquired, dozens of employees and/or contractors were present during the TBM extraction. The removal and transportation of the TBM segments from the Prairie Ave. pit appear to have been completed in ~24 hours from start to finish as well, as other members of the Teslarati team who visited the area not long after the photos were taken noted that the boring machine segments have already been transported elsewhere when they arrived.
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- The Boring Company began removing Godot, its first tunnel boring machine, on Nov. 27 and completed the removal the following day. (Pauline Acalin)
The Boring Company began removing Godot, its first tunnel boring machine, on Nov. 27 and completed the removal the following day. (Pauline Acalin)
The extraction of Godot from the Prairie Ave. site bodes well for The Boring Company’s planned operations in the future. Conventional tunneling practices, after all, usually involve leaving expensive TBM components such as the cutting head underground after work is complete due to high costs associated with their retrieval. In classic Elon Musk fashion, the Boring Company has opted for reusability instead, seemingly using its prototype garage-elevator concept as an exit point for its TBM segments.
The experience gained by The Boring Company in its Hawthorne test tunnel would help the tunneling startup tackle its most ambitious project to date — Chicago’s upcoming downtown to O’Hare high-speed transport line, which is expected to break ground as soon as the project’s permits are completed. Updates about the Chicago project have been scarce so far, though photographs taken by Teslarati photographers suggest that a gantry for the Chicago tunnel line, as well as what appears to be a next-generation TBM, is under construction.
Here’s a little video we made to commemorate our work covering The Boring Company.
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SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
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High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
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Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
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However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Elon Musk
Another Tesla SpaceX merger prediction by ARK Invest has Elon Musk talking
Elon Musk again denies a Tesla China split as new SpaceX merger speculation resurfaces quickly.
Elon Musk restated that Tesla has no plans to separate its China business from the rest of the company, responding to a new round of merger speculation from ARK Invest.
On the firm’s “Brainstorm” podcast, Cathie Wood’s team, including chief futurist Brett Winton and research director Nick Grous, argued a Tesla and SpaceX combination remains likely, with an announcement possible before the end of the year even if the deal itself would not close that quickly. Winton called Tesla’s Shanghai operations a “small ish wrinkle” for a merger rather than a real obstacle, since SpaceX’s national security work with the U.S. government sits uneasily next to Tesla’s manufacturing base in China.
Musk pushed back on the framing directly. “China is awesome. I strongly encourage people to visit,” he wrote on X. He also repeated language he first used in late July, when the Wall Street Journal reported that Tesla executives had been told to prepare for a possible spinoff, sale, or closure of the China business ahead of a SpaceX tie up. Musk called that report “absurdly fake news” at the time, adding that a separation had “never even come up in a discussion ever,” a line he echoed again this week.
The repeated denial has not settled the underlying question, because Shanghai’s role in Tesla’s business is exactly what makes a merger complicated. Gigafactory Shanghai still ships more than half of Tesla’s global deliveries and functions as the company’s main export hub for Europe and Asia. Teslarati previously reported on Musk’s initial denial, and the merger conversation itself has been building since SpaceX’s IPO gave it public shares to use as acquisition currency.
Wedbush’s Dan Ives has pegged the odds of a Tesla SpaceX merger at 80 to 90 percent by early 2027, and ARK’s prediction of a year end announcement adds another data point to that timeline, even as Musk keeps rejecting the specific mechanics reporters have described. Neither position rules out the other. Musk can deny a China spinoff was ever discussed while analysts still expect some form of combination to move forward, since ARK and Ives are both describing convergence at the corporate level, not necessarily the internal restructuring the Journal described in July.
For now, Tesla’s China business remains intact, and Musk’s comments this week make clear he has no interest in publicly walking that position back, no matter how often the merger question resurfaces.
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SpaceX AI investment gamble will make it a big winner, firm says
Tesla headlights cause recall of over 20,000 Model 3 and Model Y
