The world's first Hyperloop factory still features mainly bare floors. Image source: Hyperloop One.

Hyperloop is coming. In fact, someone just set up a factory to build it.

Hyperloop One (for brevity's sake, let's call it "H1"), the company formerly known as Hyperloop Technologies and one of three companies now known to be working on making Elon Musk's 800-mph electromagnetic subway concept a reality, announced this week that it has just opened for business the world's first Hyperloop factory. Dubbed the Hyperloop One Metalworks, the new factory sitting on the outskirts of North Las Vegas boasts 105,000 square feet of workspace, a size equal to "two football fields under one roof."

Here, says H1, the company's team of "engineers, machinists and welders" -- 170 strong -- "will build and test many of the components going into DevLoop, the full-system Hyperloop prototype" that H1 plans to debut in early 2017. (At last report, engineering firm AECOM (NYSE:ACM) is still favored to do the work of putting that prototype together into operating Hyperloop systems.) And yet, while H1 describes Metalworks as "open for business," it's not quite ready for prime time yet. As the photo above shows, most of Metalworks' 105,000 square feet of floor space is currently bare floor, and production of Hyperloop parts won't actually begin until at least a "few months" from now. 

Once production does begin, though, company co-founder and President of Engineering Josh Giegel says that Metalworks will give the company "an advantage" over rival Hyperloop builders such as SpaceX and Hyperloop Transportation Technologies, each of which is also allied with AECOM, and each of which is hard at work on competing Hyperloop plans.

Who's on first?

As the first company to build a production factory, even if it's not currently operative, H1 appears to have leaped into the lead in the Hyperloop game. It's also the company with the most irons in the fire, having feasibility studies currently under way for building Hyperloops in Finland, Sweden, and Switzerland, the Netherlands, Dubai, the United Kingdom, and even the Port of Los Angeles, and a Memorandum of Understanding signed with the City of Moscow in Russia.

H1 is not, however, without its problems.

First thing, let's hire all the lawyers

In September, H1 hired former Cisco Systems executive Rob Lloyd to serve as its CEO, relegating its own colorfully named co-founder Brogan BamBrogan to the role of CTO. Then, last month, H1 fired BamBrogan entirely, naming Giegel CTO in his stead, and replaced its general counsel, Afshin Pishevar (brother to yet another co-founder, current company chairman Shervin Pishevar), as well.

BamBrogan and three other H1 employees (Pishevar not included) promptly filed suit against the company and its officers, alleging breach of contract, wrongful termination, defamation, and other charges. Of special concern to those of us who see H1 as a potential investing opportunity, the plaintiffs say that "those in control of" H1 today aim only to "augment their personal brands, enhance their romantic lives, and line their pockets (and those of their family members)." Says the complaint, these "money men" are "focusing ... on puffery -- turning the company into a marketing-driven exercise, instead of the engineering-driven enterprise it should be."

All of which implies that, under current leadership, H1 is less a real company and more a smoke-and-mirrors show -- the kind of company that might, for example, buy an empty warehouse and issue a press release declaring it a factory "open for business."

What it means for investors -- and commuters

Granted, H1 denies all the allegations leveled at it, has countersued, and calls BamBrogan everything from "profane, erratic, sexist, and inebriated" to "a slightly below average engineer." And H1 says it only fired the four employees preemptively, because they were themselves planning to leave H1 to set up a competing Hyperloop venture. That would have multiplied the number of rival "Hyperloop" companies to four, none of which yet have a working product, and further complicated the process of picking a winner.

Whichever lawsuit has the right of things, one thing is clear: H1 today is not so bright and shiny as its press releases try to imply. In fact, the company is a bit of a mess -- and maybe not a venture that investors will want to patronize. Should H1's legal troubles end up starving the company of needed funding, this will delay the arrival of faster-than-jet-speed Hyperloop commuting for travelers far beyond 2017.

The long and the short of all this appears to be that, despite all the fanfare surrounding H1's Metalworks announcement, the advantage in the race to build a Hyperloop is shifting away from H1 and Nevada. It's shifting back to California, toward H1's rivals at Hyperloop Transportation Technologies and at Elon Musk's SpaceX itself.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.