Tesla shares rose nearly 7% in pre-market trading on Monday, after Bloomberg News reported that President-elect Donald Trump’s transition team plans to establish federal regulations for autonomous vehicles.
The report comes days after Trump named the automaker’s CEO., Elon Musk, co-director of the incoming government’s government efficiency department.
Last month, Musk criticized the state-by-state approval process that self-driving vehicles must go through as “incredibly painful.”weeks after presenting a two-seater “Cybercab” robotaxi without a steering wheel or pedals, which will go into production in 2026.
Trump’s team is looking for political leaders for the transportation department to develop a federal regulatory frameworkaccording to the report, citing people familiar with the matter.
“A unified federal regulation could streamline this (the approval process), allowing Tesla to more quickly push forward with FSD testing,” said Quilter Cheviot analyst Mamta Valechha, using the acronym Full Self-Driving (FSD).
However, regulations are not the main obstacle holding Tesla back at the moment, but rather its FSD driver assistance technology., which is not yet fully autonomous and requires driver supervision.
The FSD technology, which has been in development for more than four years, is also under investigation by the United States automotive safety agency, after four reported collisions involving Tesla vehicles equipped with the software, including a fatal accident in 2023.
Trump’s victory has propelled the company to surpass $1 trillion in market valuation, with shares up nearly 28% since November 5,as investors hope Musk’s close ties to the White House will make it easier to regulate autonomous vehicles.
The sharp rise has also boosted the stock’s price-earnings multiple, a common benchmark for valuing stocks, far above automakers like Ford Motor and General Motors, and even technology giants like Apple and Nvidia.
