Elon Musk enthused that this was no ordinary tunnel opening, but something epic and “incredibly profound”. Skeptics wondered whether it was just a hyped-up coming-out party for a hole in the ground.

In the end, the first public viewing of Musk’s latest visionary project – an underground “loop” track that promises to revolutionize transport in the 21st-century city – turned out to be a grand mixture of imaginative futurism and showbiz razzmatazz, not to mention a showcase for a novel tunnel-boring technology that may be the most significant development of all.

Whether the technology succeeds in increasing the speed of tunnel construction fifteenfold, as Musk said he hoped it would, or heralds the beginning of a vast underground network of transport channels beneath our cityscapes, is anybody’s guess.

Musk, for one, didn’t sound completely sure. “We’re obviously in the early stages here,” he told reporters. “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.”

The test tunnel, a 1.1-mile underground track that runs near the headquarters of Musk’s SpaceX company in an unlovely corner of south Los Angeles, was built with relatively conventional tunnel-boring technology for about $10m. But Musk’s underground construction arm, known as the Boring Company, has already envisioned a second- and third-generation technology that would simultaneously dig the hole, move the dirt out, and automatically install the reinforced concrete tunnel walls.

The idea is that, one day, cities will have so many underground layers of tunnel networks that a driver of an autonomous electric car could join the loop at any point and be whisked at speeds of up to 150 miles per hour to a destination programmed in advance. Musk said a station could be just a glorified parking spot with an elevator to take the driver down into the system, or something grander with double-helix spiral ramps.

Tunnel boring equipment is displayed before the unveiling event on Tuesday. Photograph: Robyn Beck/AP

Musk was vague about the timeline and vaguer still about the costs. True to his wayward reputation, he suggested at one point that anyone could copy the technology he was developing free of charge because all he cared about was alleviating traffic congestion. At another point he fantasized about building “infinite real estate underground” on Mars.

“I hope we’re one day building tunnels on Mars,” he said. “That would be a glorious day.”

Back on planet Earth, a small army of black-clad Boring Company employees was on hand to escort journalists and a crowd of VIP guests down into an area known as the Pit, hop into a Tesla X fitted with special tracking wheels that attached to the sides of the track, and make the test run into the narrow, all-white tunnel.

The ride was bumpy – according to Musk, they’ve had problems with their paving machine – and the vehicles went no faster than 40 or 50 miles per hour. Some participants likened it to an amusement-park ride, others to an airport shuttle, or one of those TV hospital dramas where a patient under the knife undergoes the beginnings of the journey to the Great Beyond.

Just a couple of minutes into the ride, the tunnel lit up with an eerie green glow to indicate the terminus, and an elevator carried each car up into a residential back alley. It took at least twice as long to make the drive back through traffic, past the Hawthorne municipal airport and the SpaceX building, lined with more white tubing where the company experiments with ultra-high-speed transport technologies.

Watch Elon Musk's underground 'loop' test track launch - video

Several cities have expressed strong interest in Musk’s vision – whether to provide a high-speed transportation link, as Chicago hopes to do between O’Hare airport and downtown, or to create a more mundane tunnel network for sewage, electricity and gas lines that could be serviced without the need to break up roads and create more congestion.

Everything, though, depends on whether Musk and his colleagues can deliver on their promise of a tunnelling technology that cuts the dizzying cost of installing new light rail or underground train tracks. Musk himself called this “the proof of the pudding”.

“We definitely do not have all the answers here,” he added. He even appeared to make fun of would-be funders who have offered to sink their assets in the Boring Company without the usual process of due diligence. “We have people hounding us to invest nonstop,” he said, “which is weird because they haven’t seen the financials. They just assume this will work, and they’re probably right.”

The tunnel opening looked, in many ways, like a proof-of-concept demonstration for those investors. And it was plainly a struggle for Musk and his colleagues to get even this far.

The opening was originally scheduled eight days ago, only to be scrapped for what the company at the time said was completion of a snail habitat required under environmental regulations. On Tuesday, though, Musk said straight out the system had not been ready.

He also appeared to give a more honest answer to the question of why the public was not being invited to try out the tunnel free of charge, as originally promised. The Boring Company explained: “Due to unbelievably high demand, tours through the Hawthorne test tunnel are by invitation only.” Musk said, flatly, that the change of plans was because of “regulatory constraints”.

For the grand opening, employees of all three Musk companies – Tesla, the Boring Company and SpaceX – did their best to create a carnival atmosphere, with a large outdoor bar, a museum-style display of the various drilling technologies, and a wall of Elon Musk’s tweets charting the loop project’s progress, all adorned with theatre-style black velvet curtains.

One of the weirder landmarks near the tunnel entrance is a medieval-style watchtower, with a brick facade and heavy wooden door – a nod, apparently, to Musk’s love of all things Monty Python. A couple of months ago, Musk said he wanted to hire someone to dress up as a knight, stand at the top of the tower like John Cleese in Monty Python and the Holy Grail and “yell insults at people in a French accent”.