Elon Musk, an inventor and the CEO of Tesla Motors, is working on an amazing transportation system. Having published a detailed design of Hyperloop back in 2013, Musk is keen to get things off the ground. In the latest move, he tweeted about plans to develop a test track for futuristic high-speed transportation system in Texas. However, given that Musk also recently conceded that Tesla was facing sales pressure in China, it remains to be seen whether investors will be kind to the company in the wake of the Hyperloop announcement.

Tesla Motors Inc ’s CEO has a vision for a transportation system that can move travelers with amazing speeds and great level of safety. Hyperloop is designed in the form of pneumatic tubes, which are sometimes used in places such as hospitals to move samples and documents.

For Musk, Hyperloop pods could be the solution to moving people, say, between Los Angeles and San Francisco, in just about half an hour. Perhaps that could be much better than the expensive high-speed rail transportation.

Hyperloop test track

Musk hinted that the planned test track for Hyperloop would be used by companies and students to try their Hyperloop pod designs. The project is estimated to anywhere between $6 and $7.5 billion, quite a substantial amount, but not far off. Remember Musk is building a Gigafactory in Nevada at the cost of $5 billion.

Distress in China as Model S sales cool

The announcement about Hyperloop comes at a time when investors were getting concerned about Tesla Motors Inc ’s performance in China, one of the important markets for the company. Musk revealed that sales of Model S in China declined in 4Q, the reason being that Chinese drivers appeared concerned about the availability of charging stations.

Additionally, some analysts also pointed out that Model S does not fit properly with Chinese wealthy drivers who love big vehicles. The analysts said that could be another challenge for Tesla in China. However, the upcoming Mode X SUV to sale well among rich Chinese drivers.

It will be interesting to watch how the sudden Hyperloop update would affect trading in Tesla Motors Inc.

One Response

  1. Haggy

    Again, investors are missing the point. This has nothing to do with Tesla and isn’t even the same company. Deliveries in China had nothing to do with sales. The plant is running at capacity and fewer cars delivered to China meant more cars delivered elsewhere but it didn’t make the backlog shrink. Just as many vehicles were sold either way and it quickly became clear to the Chinese that it was an issue of education about charging. Once that cleared up, the orders started coming in.

    It will be a long time before Tesla can make cars faster than it can sell them. As long as people keep buying them faster than Tesla can make them, Tesla sales will do fine. Getting their foot in the door is important for the long term so the market can get established. But most “investors” who look no further than the next quarterly profit have nothing to worry about. Neither does Tesla.


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