Tesla Inc (NASDAQ: TSLA) shares were up more than 7 percent in early Monday trading following a report that Trump intends to implement a structure of fully autonomous cars. Bloomberg cited the proposal as offering a vision that sees autonomous driving as one of the agenda items for the Department of Transportation under Trump.
This change in regulation could prove particularly advantageous for Tesla, which has said it plans to offer its Robotaxi service by 2026. Present-day laws governing the United States restrict the operations of vehicles that lack controls, such as pedals and steering wheels. A cleaner structure might reduce barriers that have previously constrained Tesla's growth. Since Elon Musk of Tesla Motors is in Trump's cabinet, he is believed to be spearheading the implementation of pro-autonomous vehicle policies.
Self-driving cars have been another key innovation at Tesla, with Musk underlining them as crucial for the electric car maker's future. The proposed federal framework could offer Tesla a clear roadmap for speeding up its self-driving car and Robotaxi ambitions.
Analysts at Wedbush, who work under Daniel Ives's supervision, mentioned that such a framework would represent a 'major' step in easing restrictions on the use of self-driving vehicles. The company stood behind its recommendation to 'buy' Tesla shares and kept the price target at $400. The analysts also projected that Tesla's self-driving and AI businesses could be worth $1 trillion.
Its share had already appreciated significantly, by almost 30% so far this year, as investors speculated on positive policy changes under Trump.
The shift on the federal level to promote self-driving vehicles reflects that lawmakers are slowly looking to liberalize the EV sector. Current regulatory policies have challenged makers of electric vehicles and autonomous technologies. Eliminating barriers will improve competition and product development in the sector.
Moreover, the incoming administration's stance may shift incentives away from traditional EV subsidies toward fostering technological advancements in AI and autonomy. Tesla, being less reliant on government credits than smaller competitors, could benefit from these changes.
The Trump administration's focus on a federal framework aligns with its broader agenda to modernize U.S. transportation infrastructure. Former Uber executive Emil Michael and Republican Representatives Sam Graves and Garrett Graves are reportedly being considered to lead these regulatory efforts