Musk has addressed this:
Similarly, the proposal briefly discusses thermal expansion: as the steel of the tubes heats in the hot California sun, the metal expands. That expansion needs somewhere to go. In high-speed railways, rails are allowed to overlap at the ends, but that’s not possible in the Hyperloop, and so Musk has a different solution:
“Specially designed slip joints at stations will be able to take any tube length variance due to thermal expansion,” he explained. “This is an ideal location for the thermal expansion joints as the speed is much lower nearby the stations. It thus allows the tube to be smooth and welded along the high speed gliding middle section.”
https://www.theguardian.com/technology/2016/may/12/hyperloop...
I think the hand-wringing over expansion is a bit over the top right now. Seems like its a relatively solved problem and one the Hyperloop team is taking seriously. I imagine the cost of engineering and building giant slip joints is just part of the overall cost package and probably a non-trivial part. I find it hard to believe someone as relatively trustworthy and technical as Musk is selling this concept knowing full well its impossible.
Most likely, this is a solvable problem the same way many difficult problems were solved for cars, planes, and rails during their inception. I read an analysis somewhere that the Wright brothers solved 4 or 5 'hard' problems with their first plane. Their competitors at the time weren't able to solve even one. I'm not saying Hyperloop is guaranteed to work, but declaring it 100% impossible seems overly pessimistic.
My worry is a bit more prosaic, if we gain progressive leadership in congress, we may be looking at Euro-style high speed rail in many US regions, which would invalidate the hyperloop concept. This seems less likely, imo, but by far the saner move.