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Tesla stock jumps on report Trump could ease self-driving regulations
Tesla ( TSLA ) stock is jumping on Monday as more news rolls in indicating that CEO Elon Musk’s bet on President-elect Donald Trump is paying off.
Bloomberg News reported Trump’s transition team has told advisers it plans to make a “federal framework” for full self-driving (FSD) or autonomous vehicles one of the Transportation Department’s priorities, according to people familiar with the matter.
Easing rules for the introduction of self-driving vehicles, especially those without pedals or steering wheels, would be a huge boon for Tesla. Musk has repeatedly said that the future of the company hinges on FSD and autonomous technologies.
Tesla stock jumped 6% in midday trade and is up nearly 43% since Election Day (Nov. 5).
Current federal rules by the National Highway Traffic Safety Administration (NHTSA) have eased somewhat recently in regard to autonomous vehicles. However, the rules still dictate that an occupant must be able to operate a "steering control" mechanism to manually control the vehicle if need be.
While the NHTSA does allow companies to petition for allowances or changes for testing purposes, those are hard to come by. GM’s Cruise recently abandoned its Origin autonomous vehicle that uses a steering wheel and pedals due to regulatory uncertainty; Cruise is using Chevrolet Bolt EVs with manual controls in its autonomous drives.
Though the NHTSA and the Department of Transportation can issue rules and regulations to ease driverless driving requirements like physical controls, Bloomberg reported that Congress could step in with “a bipartisan legislative measure being discussed in early stages” that would create federal rules around EVs, per two separate sources.
An act of Congress could preempt current rules by the NHTSA and the DOT and could also be used by state and local governments to develop their own self-driving regulations. Congress and the federal government could also force local governments to use federal rules by threatening to pull highway and infrastructure spending if they aren’t followed.
New federal rules easing autonomous driving and requirements would be a huge win for Tesla and Musk. Last month, at a glitzy event at the Warner Bros.. studio lot, Musk showcased Tesla’s upcoming Cybercab robotaxi and autonomous van concept, vehicles that do not include physical driver controls like a steering wheel or pedals.
Musk said the company has already begun testing its Cybercab, with a potential debut coming in 2026.
“Musk's significant influence in the Trump White House is already having a major influence and ultimately the golden path for Tesla around Cybercabs and autonomous is now within reach with an emboldened Trump/Musk strategic alliance playing out in real time and very in line with our thesis,” Wedbush analyst Dan Ives wrote in a note to investors Monday morning.
Ives and Wedbush predict Tesla’s AI and autonomous business could be worth $1 trillion alone, and the expectation is for a Trump White House to fast-track FSD and robotaxi initiatives, meaning the “federal regulatory spiderweb” Tesla encountered over the past few years could be cleared.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram .