Shares of Tesla (TSLA) are jumping in premarket trading Monday on a report that President-elect Donald Trump's transition team is planning a federal framework for fully self-driving vehicles, as investors bet on easier rules for the company's robotaxi.
Tesla Chief Executive Officer (CEO) Elon Musk, who is part of Trump’s inner circle, benefits under such a framework as he has made the robotaxi, a vehicle that will be able to drive itself without human supervision, a key focus of the electric vehicle (EV) maker’s future.
According to Bloomberg, Trump’s transition team members have told advisers they plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities.
At the moment, companies looking to sell vehicles without steering wheels or foot pedals en masse, something Tesla is planning, face significant regulatory hurdles, the report said. Present U.S. rules also pose big obstacles for Tesla’s plans for a robotaxi, including a cap that limits their deployment, the report added.
Musk announced plans in October to produce the robotaxis from 2026 onward.
Wedbush analysts led by Dan Ives reiterated their outperform call on the EV maker, saying a federal framework would be "bullish for Tesla" and a "huge step forward in easing US rules for self-driving cars."
The analysts, who also stuck with their $400 price target on the EV maker, reiterated that they estimate the autonomous vehicle and artificial intelligence (AI) opportunities to be worth $1 trillion for the company.
Wedbush analysts said last week that Tesla, which is less reliant on credits than smaller upstarts, could even benefit from less government support for EVs. Investors expect a Trump presidency to roll back EV credits given under the Biden administration.
Tesla shares are rising 6.4% in pre-market trading and have gained almost 30% this year.
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