Nevada regulators’ restrictions are complicating The Boring Company’s (TBC) ability to meet contractual commitments for its LVCC Loop, Elon Musk’s first subterranean transportation system.

The Loop system at the Las Vegas Convention Center (LVCC) is designed to transport 4,400 passengers per hour between show halls using more than 60 completely autonomous high-speed vehicles. Clark County regulators have authorized only 11 human-driven automobiles to yet, imposed severe speed limitations, and prohibited the use of on-board collision-avoidance technology included in Tesla’s “fully self-driving” Autopilot advanced driver assistance system. Tesla’s Autopilot system is technically not completely autonomous, despite the fact that it is marketed as such. It is considered — even internally, according to communications between Tesla and California regulators — a sophisticated driver assistance system capable of automating some elements.

The LVCC’s parent company, the Las Vegas Convention and Visitors Authority, drafted a contract intended at motivating Musk and ensuring that contractual obligations are honored. The contract has a fixed value, and TBC must meet certain milestones in order to receive all of its payments. The contract provides funding at several points in the process, such as when the naked tunnels are completed, the full operating system is completed, the inspection interval and security report are completed, and the system is demonstrated to be capable of transporting passengers. The final three milestones pertain to the maximum number of passengers that it can transport. TBC will receive $4.4 million if the Loop demonstrates the ability to transfer 2,200 passengers per hour, followed by the same amount if the Loop demonstrates the ability to transfer 3,300 passengers per hour, and the same amount again if the Loop demonstrates the ability to transfer 4,400 passengers per hour. These capability funds collectively account for 30% of the fixed-price contract.

Rather than transporting more than 4,000 passengers per hour, the limited system may limit capacity to less than 1,000, exposing TBC to significant fines for failing to meet contractual requirements. TBC does not earn money from charging passengers (the rides are free).

For example, during a large trade show such as CES, the LVCC can pay TBC $30,000 a day for operating and managing the system, according to a management agreement . However, the exclusive deal negotiated by TBC in 2019 includes a $300,000 penalty for each large conference at which TBC is unable to transfer 4,000 attendees every hour.

This means that throughout the course of a three- or four-day event, TBC stands to lose hundreds of dollars in revenue, in addition to the cost of operating the system. In a normal year prior to the pandemic, LVCC would host almost a dozen of these massive shows. It is unknown if TBC has any additional plans for wealth creation, such as revenue from advertising in its autos.

TBC is already incurring financial losses as a result of this competence issue. According to the deal, if TBC falls short of its efficiency target by this margin, Musk’s company will receive no more than $13 million in construction funds. per its contract, it is delaying payment on the building until TBC can demonstrate the ability to transfer hundreds of people every hour.

Reduced displays, roughly 20 per year, entail no potential penalties but earn TBC a significantly smaller reward of just $11,500 per day, according to the settlement. Additionally, TBC receives a monthly fee of $167,000 to keep the system running well regardless of the number of conventions taking place.

This week’s capability check of the Loop apparently featured only 300 individuals; yet, a Convention Center official stated that the 4,400 persons-per-hour figure was “perfectly within our sights.”

Along with its human drivers, TBC is required to operate an operations center, a maintenance and charging facility, and to provide uniformed customer service personnel, safety workers, and a full-time resident supervisor, according to the administration settlement.

By the end of 2021, the payment structure is scheduled to be renegotiated — likely downward — to account for the “expected transition to autonomous automotive operations.”

Image Credits: Ethan Miller / Getty Images

Warnings about collisions

The Clark County Department of Building and Fire Prevention imposed some limits on the Loop’s preliminary operation. These apparently include a 40 mph maximum speed limit, which drops to 10 mph inside each of the Loop’s three stations, and a limit of only 11 automobiles.

TBC informed Deputy Fire Chief Warren Whitney of the Clark County Fire Department that the company was not permitted to deploy Tesla’s collision warning systems within the Loop. Clark County awarded a transportation system certificate this week requiring the Loop to employ “non-autonomous” “manually pushed” automobiles. It was issued in conjunction with the deliberate 62 autos. Neither Clark County officials nor TBC provided specific responses to concerns about the operational limits, nor did they indicate when or if they may be relaxed.

Toyota has cautioned that its radar-based collision warning system would not function properly in tunnels.

It is unclear whether or not the Teslas are capable of safe and “completely autonomous operation” without their collision-warning radars, despite Musk’s recommendation — and subsequent implementation — to remove radar sensors from the vehicles and replace them with cameras. Tesla began shipping Model 3 and Model Y vehicles without radar sensors in May. Due to a lack of radar sensors, the National Highway Traffic and Safety Administration has stated that Model 3 and Model Y vehicles built on or after April 27, 2021 will be unable to receive the agency’s check mark for automated emergency braking, ahead collision warning, lane departure warning, and dynamic brake assist. Additionally, the resolution prompted Consumer Reports to de-list the Model 3 as a Top Pick, while the Insurance Institute for Highway Safety announced plans to de-list the Model 3 as a Top Safety Pick+.

Additionally, the Fire Department has concerns about responding to crises inside the tunnels, including battery fires that may last several hours. “There have been instances where electrical autos caught fire without being involved in an accident

Whitney famously equipped the system with several cameras and smoke detectors, as well as a “sturdy” air flow system capable of transporting 400,000 cubic feet of air per minute in both directions down the tunnels. This should allow passengers and drivers to flee the autos on foot. For considerably less serious occurrences, TBC has a tow vehicle (along with a Tesla) that it uses to recover broken-down autos.

Firefighters have previously conducted exercises within the underground system, as well as simulated accidents away from a station using two or three different automobiles. “Eleven autos is undeniably doable,” Whitney asserts. “However, when the number of autos increases, this may become a problem. [TBC] is a for-profit enterprise, and as such, they will seek to maximize effectiveness; hence, additional discussions may occur as they endeavor to expand capability.”

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