What Happened?

Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 10.4% in the afternoon session after the National Highway Traffic Safety Administration (NHTSA), rolled out new rules to speed up the launch of home-built self-driving cars. As part of this push, the group planned to cut red tape in crash reports, making it easier for firms like Tesla to test their autonomous vehicles. NHTSA also wants to stretch an old rule that lets some cars skip standard checks, so more US-made driverless cars can join. These moves were designed to offer a clear plan to put the US ahead in the autonomous vehicle market, especially as China steps up its game. 

For companies like Tesla, this regulatory easing could significantly accelerate the commercialization of autonomous mobility solutions across the US.

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What The Market Is Telling Us

Tesla’s shares are extremely volatile and have had 128 moves greater than 2.5% over the last year. But moves this big are rare even for Tesla and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 2 days ago when the stock gained 8.9% on the news that CEO Elon Musk announced plans to limit his involvement at the Department of Government Efficiency, suggesting a shift in focus toward his business ventures, especially Tesla. Musk added during the Q1 2025 earnings, "I think starting probably in next month, May, my time allocation to DOGE will drop significantly." 

The quarter itself was underwhelming as Tesla delivered fewer vehicles than forecasted, its revenue in all three segments (Services, Automotive, and Energy) missed, and its EPS fell short of Wall Street's estimates. 

Still, investors cheered Musk's renewed focus on the business, especially as the company continued to make significant operational adjustments towards delivering more vehicles and keeping to its promise to introduce more affordable EVs while also fending off rising competition.

Tesla is down 25.1% since the beginning of the year, and at $284.05 per share, it is trading 40.8% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $5,334.

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