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Elon Musk’s Boring Company breaks ground for garage-elevator construction
Last month, Elon Musk’s tunneling startup, The Boring Company, was granted an approval by the city council of Hawthorne, CA to build a prototype garage-elevator concept that would be linked to one of the company’s high-speed tunnels. Recent photos from Teslarati photographers Tom Cross and Pauline Acalin reveal that construction of the prototype elevator concept has already begun.
The Boring Company’s prototype garage-elevator is being built west of SpaceX’s Hawthorne facility. The location of the futuristic garage is no accident, as the startup plans to have cars enter the tunnel from the SpaceX campus, move through the tunnel and on to the garage-elevator, and then travel back to SpaceX as part of the concept’s tests. Adopting such a process allows The Boring Co. to avoid creating additional traffic on the street.
Photos captured by Teslarati photographers reveal that The Boring Company has broken ground on the site of its recently-announced garage-elevator. While the startup has not officially announced that the construction corresponds to the planned elevator concept, the site’s location on 120th St. near Prairie Avenue matches the address of the project that the company confirmed to The Mercury Times last month. Furthermore, the pit’s sheer scale fits well with the company’s plans to dig a hole to extract segments of its tunnel boring machine (TBM).
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- The excavation site of the Boring Company’s garage-elevator prototype. [Credit: Tom Cross/Teslarati]
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- The excavation site of the Boring Company’s garage-elevator prototype. [Credit: Tom Cross/Teslarati]
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- The excavation site of the Boring Company’s garage-elevator prototype. [Credit: Pauline Acalin/Teslarati]
The site of the Boring Company’s excavation for its garage-elevator prototype. [Credit: Tom Cross and Pauline Acalin/Teslarati]
Looking at the images of the construction in progress, it appears that the hole being excavated is around 30 feet or more in diameter. This is quite substantial, considering that graphics provided by the tunneling startup show the garage-elevator transporting cars one at a time. As noted by AutomobileElevator, a company in the business of providing car elevators, lifts that are designed for large vehicles like full-sized SUVs usually have dimensions of 9.3 x 20 x 7 feet – significantly smaller than the pit in the Boring Company’s ongoing excavation. With this in mind, it appears that the tunneling startup’s garage-elevator, once complete, would have enough space to accommodate large mainstream vehicles like full-sized SUVs and trucks.
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- The Boring Company’s proposed prototype garage. [Credit: The Boring Company]
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- The Boring Company’s proposed prototype garage. [Credit: The Boring Company]
The Boring Company’s proposed prototype garage-elevator concept. [Credit: The Boring Company]
In a comment about the garage-elevator, Boring Company representative Jane Labanowski noted that the prototype concept would be an essential part of the tunneling startup’s vision for the future. The garage-elevator, if any, would serve as convenient entry point for the company’s high-speed tunnel system, particularly for those in residential areas.
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“It’s an important part of the longer-term vision the company is trying to build,” she said.
The Boring Company might be a newcomer in the transportation industry that is more well-known for its quirky merchandise such as the Boring Company Not-a-Flamethrower, but the tunneling startup is already starting to gain contracts for high-profile projects. Earlier this year, for example, the Boring Company won a contract for the construction of the downtown Chicago-O’Hare high-speed transport line, beating larger, more experienced conglomerates which were also bidding on the project. The Chicago project would feature the Loop system, which features Tesla-made fully-electric pods capable of transporting up to 16 people at a time at speed of up to 150 mph.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
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Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
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.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
