Tesla (TSLA) shares surged early Monday following reports that President-elect Donald Trump’s transition team is considering a federal framework for regulating self-driving vehicles, Investor’s Business Daily reports.
The news, which could pave the way for a more streamlined path to autonomous vehicle adoption, was welcomed by investors, pushing Tesla’s stock up nearly 5% in early trading.
According to a Bloomberg report on Sunday night, Trump’s team is seeking input from policymakers at the US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) to create a cohesive framework for regulating self-driving cars. Currently, autonomous vehicle regulations are handled state-by-state, leading to a patchwork of policies. While states like Texas and Florida have no restrictions on self-driving vehicles, other states have more stringent rules. A national set of guidelines could help ease the path toward broader adoption of self-driving technology.
Tesla CEO Elon Musk, a vocal Trump supporter and advisor to the incoming administration, has long advocated for regulatory clarity in the self-driving space. The potential for a unified federal framework could be seen as a win for Tesla, which has been at the forefront of autonomous driving efforts. Musk’s company has already made significant strides with its Full Self-Driving (FSD) system, although it is currently classified as a Level 2 driver-assist system, rather than a fully autonomous solution.
Tesla’s goal has been to roll out fully autonomous robotaxis in cities like Texas and California by mid-2025. However, the company’s FSD technology still requires human intervention approximately every 100-200 miles, a significant gap from the level of autonomy needed for a fully functional robotaxi service.
While regulatory frameworks have not been the primary barrier to Tesla’s robotaxi rollout, they could become an important factor for other companies in the space. Alphabet’s Waymo and Amazon’s Zoox are two major competitors already testing robotaxi services in cities like San Francisco, Phoenix, and Las Vegas. Waymo has begun offering autonomous rides to passengers in these cities, while Zoox is just starting its public tests in Las Vegas and San Francisco.
A national set of guidelines could benefit these companies as they look to expand their services. Furthermore, such regulatory clarity might accelerate the rollout of Tesla’s own robotaxi fleet, should its technology advance to the necessary level of safety and reliability.
Tesla’s stock has been volatile in recent weeks, with the stock edging down 0.2% last week after a massive 29% surge following Trump’s election win. However, the news of a potential federal self-driving framework provided a boost to the stock on Monday, as investors remain optimistic about Tesla’s future prospects in the autonomous vehicle market.
While regulatory challenges remain, the broader self-driving vehicle industry appears to be gaining momentum, with both established companies like Tesla and new entrants such as Waymo and Zoox positioning themselves for future growth. The push for a federal framework signals that the US government may be taking steps to support this rapidly advancing sector, which could have long-term implications for both the automotive and tech industries.
As of early Monday, Tesla’s stock was up nearly 5%, meanwhile, stocks of other tech giants like Google and Amazon saw slight gains overnight.
