Yahoo Finance

On the financial front, Boring has since put its self-driving vehicle plans on the back burner—meaning it’s racking up costs to pay a driver for every one to three people it moves underground at relatively mild speeds of under 40 miles per hour in Vegas. Not to mention, employees say that the company has suffered from a nearly constant churn of staffers and executives. Perhaps most important, the company seems to have lost the close attention of the man who started it all: Musk.

Fortune spoke with four former Boring Company executives and staffers, as well as politicians and lobbyists who worked with Musk’s tunnel company on various projects, local Las Vegas residents, and engineers to report this story. We also reviewed thousands of pages of emails between Boring Company employees and local government officials, lobbying records, maps, and Boring contracts.

One former employee summed up the company’s predicament in a nutshell: “Elon’s idea for the Boring Company was a good one. It just hasn’t been executed on.”

Betting it all on Vegas

The Boring Company has approvals to build an intricate matrix of tunnels but thus far has completed only a 2.4-mile stretch. Meanwhile potential projects from California to Florida have fizzled.

‘Soul-crushing’ traffic

Musk’s tunneling venture was allotted all of three pages in Walter Isaacson’s recently published 615-page biography—an apparent testament to how Musk’s attention has been diverted elsewhere over the past few years. While he occasionally defends or promotes the Boring Company on X, the last time Musk tweeted any kind of new detail about it was in April 2022. Steve Hill, CEO of the public agency that runs the Las Vegas Convention Center (LVCVA), told Fortune that Musk has been to Las Vegas a “couple of times” to look at the Loop. Three former employees say it has been rare for Musk to show up on-site.

It hasn’t always been that way. In 2016, Musk became obsessed with fixing what he called “soul-crushing” traffic. Though the name (and the 20,000 Boring Company–branded flamethrowers he sold) may have sounded like a joke, Musk was serious about the idea. He poured $100 million of his own money into the project, according to Isaacson’s Elon Musk, and requested Davis place an order for two boring machines, at $5 million a pop, that he had transported immediately to SpaceX headquarters in Hawthorne, Calif., to start digging. Musk would say in 2018 that he paid around $10 million to build that first 1.14-mile demo project outside Los Angeles.

As Musk would go on to say over and over again, these tunnels would be the early beginnings of Hyperloop, the tube he envisions will eventually shoot people into cities at speeds of hundreds of miles per hour. The Boring Company was Musk’s first stepping stone to get there—an underground maze of tunnels with small stations all across a city. People would be able to enter the tunnels in their own autonomous vehicles and travel at 150 miles per hour to get where they wanted to go. Boring Company would be able to build one mile of tunnel in a week, Musk said.

“Finally, finally, finally there is something that I think can solve the goddamn traffic problem,” Musk said to a cheering crowd while presenting Boring’s demo tunnel in 2018. Boring would manage every layer of the design, construction, and operation itself—just like Tesla or SpaceX—and build tunnels faster, cheaper, and better than ever before.

Tunnel No. 1

When Boring Company landed its official first project with the LVCVA, Davis moved from Washington, D.C., where he had been focused on a Baltimore Loop, to Las Vegas. Davis is somewhat awkward as a presenter, but employees say he is matter-of-fact and extraordinarily intelligent. He is known to pace around the office or around Boring’s R&D property in Bastrop, Texas, while he talks on the phone. One former employee recalls Davis’s partner bringing in eggs and bacon for breakfast after a particularly long night in the office. When he is in town, he’s always working, former employees say, and he has a little house on the Bastrop property where he will sleep as well as a condo in a sky-rise in downtown Austin.

But former employees say that Davis generally doesn’t delegate decision-making authority, and that he is the sole person overseeing every detail at the company, even the minutiae. “Even parts orders of a few thousand dollars required personal direct approval from Steve,” one former employee said.

Like at other Musk companies, Boring employees, of which PitchBook estimates there are 270, were expected to put in long hours and work on weekends. Another former employee said that he would hear people brag about working 18-hour days. “When I worked my first 16-hour day, it was presented to me like a badge of honor,” the person said, noting that their manager had told them when they joined that lasting six months at the job would be longer than most people. Another person said they saw people quit after just a week—or sometimes even a day. “It was a very unpleasant place to work,” the person said.

But there are a few key reasons why Boring Company has struggled to retain the people it’s hired. At SpaceX, Musk hired on Gwynne Shotwell as president to run day-to-day operations and Mark Juncosa to oversee all the engineering. At Boring Company it is just Davis wearing all the hats. While he is a strong engineer, some employees say he lacked people skills. “He did not understand empathy,” one of the people said.

“Working at Boring Company is like a big fire drill every single day—or something to that extent—because of how Steve manages,” one of the former executives says. They say it stems from a deep-rooted anxiety, an anxiety that comes from the urge to please an ever-demanding Musk.

“Working at Boring Company is like a big fire drill every single day.”

The other former executive added that it’s harder to hire people at Boring Company than some of Musk’s other ventures. “Tunnel engineers are different than those hired at Elon’s other companies in that they have a much lower risk profile and are much more conservative in their thinking—so it’s hard to attract people with a moonshot … If you want to work for Elon, Boring Company is your last choice,” they said.

Although some of Boring Company’s early executives have left, others have stuck around, like legal guru Ashley Steinberg. And several staffers have been promoted into senior roles, including project development manager Tyler Fairbanks, HR manager Cayle Turpen, and mechanical engineers Stuart Donnelly and Julius Callender.

Many of Boring’s investors—who include Shaun Maguire of Sequoia Capital, Antonio Gracias of Valor Equity Partners, and investors at Vy Capital—either declined or didn’t return Fortune’s requests for an interview, so it’s unclear what investors think about Boring Company’s performance or Davis’s leadership. If they are unhappy, it wouldn’t really matter: It doesn’t seem like there is much they can do about it. Venture capitalists have deployed more than $790 million for a minority stake in the company, but it’s unclear whether even major investors have a seat on the board. Boring Company was last valued at $5.6 billion in 2022, though a tender offer recently reported in The Information now implies a valuation of more than $7 billion.

The Vegas Loop project opened in June 2021 at Boring’s central station. A slew of media were invited to descend an escalator into a neon-lit 10-stall station (which Hill estimates cost the Boring Company $20 million to $30 million) and take their first ride. In the station, a Boring Company employee ushers riders into an available Tesla vehicle, and a Boring driver chauffeurs them through the narrow, single-lane tunnels at a speed of up to 40 miles per hour. The tunnels are white-walled, 12 feet wide, and feature funky pink, blue, and green lights.

Hill, who in an earlier government role had worked with Tesla to open its gigafactory in northern Nevada, was the first city official to take a leap with the Boring Company and is evidently still enthusiastic about the project. He describes it as “an underground highway system that runs like an Uber or Lyft.” The LVCVA reports that approximately 1.2 million conference attendees have ridden through the Las Vegas Loop below its convention center since it was opened to the public in 2021, and give it an average of 4.9 out of 5 stars on surveys.

Boring is in the process of opening two new tunnel stops—one at the Wynn and Encore Resort on Las Vegas Boulevard, and one to the Westgate, a hotel one block off the Las Vegas Strip. The first tunnel to the Westgate is finished, but the second one can’t be completed until the leases are up on the parking lot right across from Hill’s office. Hill said it’s “a little bit of a dance” to coordinate all the moving parts. “That takes some time to figure out.”

Autonomy no more

It’s no small feat to build a tunnel under a city. You have to figure out where to put it, navigating around electrical lines, gas lines, or enormous restaurant grease traps. You have to find places for safety hatches and stairwells, then get building approvals and land use permits. Then you have to do the actual digging, managing for risk of collapse and worker safety.

But first you need buy-in from politicians, the relevant government agencies—and the general public. And just because you have buy-in one year doesn’t mean you keep it: A Chicago airport project Boring was negotiating faced certain death after Mayor Lori Lightfoot was elected in 2019.

No other project lays out the juggling act so clearly as the highly anticipated Baltimore-Maryland Loop. That was the high-speed 35.3-mile twin tunnel system that Boring wanted to dig at least 30 feet underground to connect Baltimore to Washington, D.C., with stops along the way. Boring predicted autonomous vehicles would be able to travel at speeds of up to 150 miles an hour, making a one-way trip take approximately 15 minutes to complete. Musk had announced tentative plans via Twitter, and had the buy-in from then–Maryland Gov. Larry Hogan. In April 2019, Boring submitted a 505-page environmental assessment to government officials, detailing its plans for the project.

The backlash was swift. Maryland’s Department of Transportation State Highway Administration received at least 468 complaints, questions, or comments about Boring Company’s proposal from local government agencies, according to emails obtained by Fortune via a Freedom of Information Act request. Then there were the community public comments from fans and critics. “Don’t let these rich transportation gurus use our community as an experiment—that in the end won’t benefit us,” one Maryland resident commented.

Engineers weighed in, too. Peter Muller, an autonomous transportation system consultant, reviewed Boring’s assessment when it came out. In an interview with Fortune, Muller explained that the curves of the tunnel Boring had designed were too great to warrant the high speeds it was suggesting. “They hadn’t taken account of the simple geometry,” Muller says. “That is Engineering 101, and they ignored it.”

“They hadn’t taken account of the simple geometry. That is Engineering 101, and they ignored it.”

The Boring Company responded to all the relevant questions and comments, according to the documents, though the project fell apart almost immediately after. The federal highway regulator did not approve Boring’s draft environmental assessment. The Baltimore Loop Project website has since been taken down.

Boring turned all of its attention to a drastically scaled-down version of the Loop in Las Vegas and to developing the next iteration of its tunnel boring machine, the Prufrock. Since 2017, Boring Company has worked with at least 12 lobbyists and lobbying firms in Maryland, Texas, Nevada, and Florida, according to public records—none of whom appear to be working with the company anymore after initial political interest in those states.

Slower than a snail

Since the Maryland plan fell apart, the Boring Company has walked back plans for self-driving vehicles and larger robo-taxis that could carry around 12 people at a time—meaning that Boring has to hire a part-time driver to chauffeur every one to three people who use the tunnel. Right now, the convention center is paying $4.5 million a year to Boring for operating the system (the equivalent of $7.50 per ride, based on the LVCVA’s fiscal 2023 ridership data and its financial statements). At Resorts World, the Boring Company is charging riders $5 for a day pass to use its Boring tunnels from Resorts World to the convention center (riders can pay using Dogecoin). It’s likely the Boring Company may be subsidizing the costs in order to maintain the low price it is charging per ride.

Last year, Boring raised $675 million—so it probably doesn’t have to worry about subsidizing costs yet. But for how long? “This is part of the problem of public transportation, is that it’s very expensive to operate,” Muller said. “[Pretty much] no public transportation system in the U.S. makes money.”

If Boring Company disbands its project, the LVCVA has hedged risk in its contract, and the system will be handed over to the city, county, or LVCVA depending on the jurisdiction. The problem is that the tunnels are so small they can’t accommodate large vehicles. They’re also made particularly for EVs—not gas-powered cars. Finding a replacement operator may be tricky.

But the bigger risk is reputational. Should a Boring Company tunnel ever collapse, former employees recognize the impact would be devastating—even if there are no fatalities. This echoes the concerns of Mayor Goodman, who told Fortune in an interview at her office that she was concerned about the lack of exit routes in the Loop tunnel, or what happens if the lights go out and everything goes dark.

“They’re in Florida trying to get [a tunnel], and Texas, [and] to the airport in Chicago. And nobody bit. Nobody took up the offer except us,” she said, adding later: “It’s not proven. And I don’t want to be a guinea pig.” LVCVA’s Hill says the concerns he has seen raised about the Boring Company are more about track record than real operational or engineering concerns. “Safety obviously has to be the number one priority, because all eyes are on this,” he said.

Even in Las Vegas, the whole Loop project still seems elusive to many of the city’s own residents. As I sat in traffic on East Tropicana Avenue in Las Vegas, right above where Boring hopes to eventually dig a tunnel to the airport, I asked my Uber driver whether he had gotten to ride in Musk’s tunnel yet.

“That’s real, huh?” he responded.

This story was originally featured on Fortune.com