Tesla Shares Surge on Trump Administration Plans for Self-Driving Vehicles

Investing.com — Tesla Inc (NASDAQ:TSLA) shares rose over 7% in premarket trading on Monday following Bloomberg reports that the incoming Trump administration aims to establish a federal framework for fully self-driving vehicles, prioritizing it for the Department of Transportation.

This move is considered a significant advantage for Tesla, the leader in autonomous driving technology. CEO Elon Musk, a strong supporter of President-elect Donald Trump and part of his inner circle, along with Vivek Ramaswamy, is involved in the new Department of Government Efficiency (DOGE), focused on reducing government spending waste.

Wedbush analysts, led by Daniel Ives, indicated that this initiative would significantly ease U.S. regulations for self-driving cars, positively impacting Tesla's autonomous and AI aspirations heading into 2025.

The Trump administration is looking for leadership to craft the regulatory framework for self-driving vehicles. Presently, federal regulations impose strict limitations on cars lacking foot pedals and steering wheels. Former Uber executive Emil Michael is reportedly a candidate to lead the department, with Republican Representatives Sam Graves and Garrett Graves also under consideration.

Tesla has outlined plans for a Robotaxi service to launch in 2026, but current regulations may hinder its potential. However, Musk's role in the new administration could set the foundation for the successful rollout of this service.

Wedbush estimates that the AI and autonomous opportunity represents a $1 trillion market for Tesla, anticipating these initiatives will be accelerated in a Trump-led environment as regulatory obstacles diminish.

The investment firm considers Tesla stock "the most undervalued AI play in the market today."

Tesla shares have increased by 28% since Trump's election victory on November 5th.