Tesla Inc (NASDAQ:TSLA) shares revved up 7% ahead of Monday’s first trades on a report that president-elect Donald Trump will prioritise loosening the legal framework around self-driving cars.
Trump’s transition team has told advisors a federal framework around fully self-driving vehicles will be a priority for the Department of Transportation, according to Bloomberg.
This could make it easier for manufacturers to obtain self-driving licenses across state lines, directly benefiting Trump ally Elon Musk, as well as Waymo, the self-driving company owned by Google parent Alphabet Inc (NASDAQ:GOOG).
Wedbush analyst Daniel Ives said the framework would be a “huge step forward” in easing rules over self-driving technology and mark a “significant tailwind” for Tesla.
“Musk's significant influence in the Trump White House is already having a major influence,” Ives added.
Tesla’s artificial intelligence-trained cars are largely able to drive on their own already with human supervision and Musk’s company has planned to launch a self-driving taxi service in late 2025.
“The golden path for Tesla around Cybercabs and autonomous is now within reach with an emboldened Trump-Musk strategic alliance playing out,” Ives said.
The Trump transition team have also leaked plans to discontinue a $7,500 consumer tax credit for EVs as part of larger strategy on tax-reform legislation, which would be a negative for the EV industry - though Ives thinks it would hit Tesla's rivals GM, Ford, Stellantis and Rivian harder over time.
Shares ticked up 7.3% to $344.02 in pre-market trading, adding to a near-28% gain since the November 5 election.