The same technology – which is shaped like a small rocket – could be used as an escape pod in emergency space evacuations, the billionaire has claimed.
Mr Musk has been trying to come up with solutions to try and save the children as the Thai government works to save them from being stuck underground.
Mr Musk had initially suggested that the boys could be rescued by inflating a giant tunnel through the caves that would displace the water and allow them simply to move through as if they were on land. He suggested on Twitter that the plan was still in place, but that it was probably not going to work.
"Also building an inflatable tube with airlocks," he wrote. "Less likely to work, given tricky contours, but great if it does."
He has now suggested that the tiny, "kid-sized submarine" could be used instead. The children would climb into the submarine and then be escorted out by divers, meaning that they would still be able to breathe and swim despite not being trained to use the equipment.
Musk posted videos on Twitter of the aluminium sub being tested at a swimming pool Sunday mid-afternoon California time. If the tests were successful, the sub was to be placed on a 17-hour flight to Thailand.
A spokesman for Musk's Boring Company tunnelling unit, which has four engineers at the cave, has said Thai officials requested the device, which could potentially help the children through narrow, flooded cave passageways. However, it is unclear if the device is part of any current rescue plans.
The official operation to rescue the boys from the cave is currently in its second stage. Four have already successfully been extracted from the cave, and their condition remains unknown.
President Donald Trump tweeted Sunday: "The U.S. is working very closely with the Government of Thailand to help get all of the children out of the cave and to safety. Very brave and talented people!"
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