Political and economic considerations

The alpha proposal projected that cost savings compared with conventional rail would come from a combination of several factors. The small profile and elevated nature of the alpha route would enable Hyperloop to be constructed primarily in the median of Interstate 5. However, whether this would be truly feasible is a matter of debate. The low profile would reduce tunnel boring requirements and the light weight of the capsules is projected to reduce construction costs over conventional passenger rail. It was asserted that there would be less right-of-way opposition and environmental impact as well due to its small, sealed, elevated profile versus that of a rail easement; however, other commentators contend that a smaller footprint does not guarantee less opposition. In criticizing this assumption, mass transportation writer Alon Levy said, "In reality, an all-elevated system (which is what Musk proposes with the Hyperloop) is a bug rather than a feature. Central Valley land is cheap; pylons are expensive, as can be readily seen by the costs of elevated highways and trains all over the world". Michael Anderson, a professor of agricultural and resource economics at UC Berkeley, predicted that costs would amount to around US$100 billion.

The Hyperloop white paper suggests that US$20 of each one-way passenger ticket between Los Angeles and San Francisco would be sufficient to cover initial capital costs, based on amortizing the cost of Hyperloop over 20 years with ridership projections of 7.4 million per year in each direction and does not include operating costs (although the proposal asserts that electric costs would be covered by solar panels). No total ticket price was suggested in the alpha design. The projected ticket price has been questioned by Dan Sperling, director of the Institute of Transportation Studies at UC Davis, who stated that "there's no way the economics on that would ever work out." However, some critics have argued that, being designed to carry fewer passengers than typical public train systems, it could make it difficult to price tickets to cover the costs of construction and running.

The early cost estimates of the Hyperloop are a subject of debate. A number of economists and transportation experts have expressed the belief that the US$6 billion price tag dramatically understates the cost of designing, developing, constructing, and testing an all-new form of transportation. The Economist said that the estimates are unlikely to "be immune to the hypertrophication of cost that every other grand infrastructure project seems doomed to suffer."

Political impediments to the construction of such a project in California will be very large. There is a great deal of "political and reputation capital" invested in the existing mega-project of California High-Speed Rail. Replacing that with a different design would not be straightforward given California's political economy. Texas has been suggested as an alternate for its more amenable political and economic environment.

Building a successful Hyperloop sub-scale demonstration project could reduce the political impediments and improve cost estimates. Musk has suggested that he may be personally involved in building a demonstration prototype of the Hyperloop concept, including funding the development effort.

The solar panels Musk plans to install along the length of the Hyperloop system have been criticized by engineering professor Roger Goodall of Loughborough University, as not being feasible enough to return enough energy to power the Hyperloop system, arguing that the air pumps and propulsion would require much more power than the solar panels could generate.