Shares of Tesla TSLA.O rose more than 5% on Monday after Bloomberg News reported that President-elect Donald Trump’s transition team plans to implement federal regulations for autonomous vehicles.
The report comes days after Mr. Trump named the automaker’s chief executive, Elon Musk, as co-head of the incoming administration’s government efficiency department.
Mr. Trump’s team is seeking policy appointees for the Transportation Department to develop a federal regulatory framework, the report said, citing people familiar with the matter.
Last month, Musk criticized the state-by-state approval process required for self-driving vehicles, calling it “incredibly burdensome,” weeks after unveiling a two-seat “Cybercab” robotaxi without a steering wheel or pedals, production of which is planned for 2026.
“Unified federal regulations could streamline the approval process (), allowing Tesla to move forward with FSD testing more quickly,” said Mamta Valechha, an analyst at Quilter Cheviot.
However, regulation is not the main obstacle holding Tesla back at the moment, it is the company’s Full Self-Driving (FSD) driver assistance software which is not yet fully autonomous and requires the supervision of a driver.
FSD technology, in development for more than four years, is also the subject of an investigation by the US auto safety agency, after four reported collisions involving Tesla vehicles equipped with this software, including a fatal accident in 2023.
Mr. Trump’s victory propelled the company past the $1 trillion market valuation mark, with shares surging nearly 28% since Nov. 5 as investors hoped the company’s close ties Mr. Musk and the White House will relax regulations relating to autonomous vehicles.
The surge has also pushed the stock’s price-to-earnings multiple, a common benchmark for valuing stocks, well above automakers such as Ford Motor FN and General Motors GM.N , and even automotive giants technology such as Apple AAPL.O and Nvidia NVDA.O.
((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Updated actions in paragraph 1) by Akash Sriram
