The billionaire entrepreneur’s mile-long tunnel is designed to help ease traffic jams and revolutionise transport. It is the first tunnel to be competed as part of the underground transit project Mr Musk launched two years ago. Modified electric cars would drive through the tunnel at speeds of up to 150mph.
The prototype tunnel has been built by Mr Musk’s Boring Company using state-of-the-art techniques.
Mr Musk called the design “incredibly profound” at its unveiling in LA in Tuesday.
He said: “We’re obviously in the early stages here.
“This is a prototype. We’re figuring things out.
“What’s really important is that there is a path, finally, finally, finally… to alleviating traffic congestion in cities.
“If what we’re saying is true, and we think it is, there is finally a solution.”
Mr Musk, head of the Tesla Inc electric car manufacturer and energy company, launched his project after complaining on Twitter in December 2016 that LA’s traffic was “driving me nuts.”
The test tunnel runs from his SpaceX company’s headquarters in south Los Angeles.
It was constructed for around £7.9 million ($10 million) using tunnel boring technology.
More traditional engineering methods would have cost up to £790 million ($1 billion) and taken three to six months to complete, Mr Musk claimed.
During Tuesday’s launch, he arrived in a Tesla car that had been modified to travel on the tunnel’s loop system.
Cars are lowed into the tunnel before being fixed onto the loop’s track.
Two wheels are fitted to the vehicles to keep it stable and stop it hitting the side of the tunnel.
Mr Musk said: “We used Tesla vehicles because I run Tesla. What I am going to do? Use someone else’s car?
“The profound breakthrough is very simple: it’s the ability to turn a normal car into a passively stable vehicle by adding the deployable tracking wheels, stabilising wheels, so that it can travel at high speed through a small tunnel.”
In the future, the entrepreneur hopes cities will have networks of underground tunnel networks to allow electric cars to join the loop at any point.