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Tesla Motors Inc's Elon Musk Has a Wild New Idea: The 'Hyperloop'


This whole transit system would be impossible to crash, always available on demand, way less expensive than current travel options and, ideally, solar-powered.

Tesla Motors (TSLA) CEO and co-founder Elon Musk started off his week on Monday by tweeting an announcement that, from anyone else, would have sounded like a tease for a bad sci-fi movie: "Will publish Hyperloop alpha design by Aug 12. Critical feedback for improvements would be much appreciated."

If you still think electric cars or rocket ships are cool, you haven't been keeping up with Musk. His "hyperloop" is a proposed "really rapid transit system" that he says will be able to get a passenger from San Francisco to Los Angeles in a half-hour. That would mean travel at 800 miles per hour, or about twice the speed of conventional aircraft.

He has been a little vague on how this works, except to say recently that the concept is "a cross between a Concorde, a railgun, and an air-hockey table."

Also, he says it will be impossible to crash, always available on demand, way less expensive than current travel options and, ideally, solar-powered.

Remember, this isn't Donald Trump talking trash. This is Elon Musk, who has already changed the nature of money, as a co-founder of PayPal, the electronic payments system.

Since selling PayPal to eBay (EBAY), Musk has served as CEO of SpaceX, which is in the business of building rocket ships and spacecraft. The company, which he co-founded, is now under contract with NASA to service the International Space Station.

Of greater interest to today's investors, though, is Musk's role as co-founder, CEO, and CTO of Tesla Motors, the venture that is proving that building all-electric vehicles can be a profitable business.

We'll find out how profitable it is right now on July 22, when Tesla announces its earnings results for the second quarter. The stock, which just made a splashy debut on the Nasdaq-100 Index (INDEXNASDAQ:NDX), has zoomed from $25.52 to $133.26 in a bit less than a year.

That's the kind of price increase that makes for warnings about a bubble market.

But Musk says Tesla is just getting started. His real goal is to produce electric cars at an increasingly economical price. The first Tesla model, launched in 2008, was a roadster with a base price of about $70,000.

At an event for Tesla owners over the weekend, Musk said the company hopes to ship 800 vehicles per week by the end of 2014. It has added a second model, Model S, and has a minivan in the works for next year.

If you think this is sufficient innovation for an entrepreneur who is, after all, only 42 years old, wait until he unveils his plans for what he calls "the fifth mode of transportation," alongside trains, planes, cars and boats.

Speculation is rife about what exactly this mode of transportation could be. Blogger Brian Dodson, who really is a rocket scientist, explains how he thinks it might work, based on the sparse information available.

In short, it sounds like the hyperloop might be a kind of pneumatic tube for people. Musk has to be one of the few people on Earth who could suggest such an idea without getting laughed at.

Ironically, the concept, like that of an electric car, isn't new. Pneumatic tube systems, which use compressed air to move objects through a tube connecting fixed points, are still in use in some industries, but were more common in the late 19th century. In their early years, there was speculation that the technology could be used to transport people, but nobody ever proved it.

Musk hasn't promised proof at this point, just an "alpha design." But he has said that he will make the design available as "open source," and that he will not seek any patents for it.

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