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Tesla stock jumped on Monday after a Bloomberg report said President-elect Donald Trump's transition team is prioritizing the creation of federal framework for fully autonomous cars .

Shares leapt 8% to $346.81, bringing the electric car maker's market cap to $1.1 trillion, and Wedbush analyst Dan Ives thinks that's just the start of a rally that will eventually send the valuation to $2 trillion.

That's after CEO Elon Musk contributed more than $100 million to help elect Trump and has emerged as a top adviser in his inner circle.

"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," he wrote in a note on Sunday.

Trump clears the regulatory "spiderweb"

His thesis estimates that autonomous driving alone represents a $1 trillion opportunity for Tesla as the federal government under Trump clears the regulatory "spiderweb" that has been weighing on Musk's vision for self-driving cars.

A spokeswoman for the Trump transition didn't directly address the report about a federal self-driving framework, only saying that Trump will deliver on the promises he made during the campaign.

Musk has been teasing autonomous capabilities in Tesla vehicles for years. In 2019, the company was preparing an entire ride-sharing vehicle fleet and predicted there would be over a million robotaxis on the road by 2020.

That didn't happen. But last month, he unveiled the Cybercab , a self-driving EV with no steering wheel or pedals that he said would carry a $30,000 price tag. Musk speculated it could be available "before 2027" though he admitted he tends to be optimistic with timelines.

While gauging Tesla's outlook under Trump, Ives maintained his outperform rating and $400 price target on the stock.

He added that the path to a $1.5 trillion and then a $2 trillion valuation will play out over the next 12 to 18 months, with the Cybercab representing "the golden goose." For now, he thinks Tesla is the most undervalued AI play in the stock market today.

"In essence, Musk made a strategic and big bet on a Trump White House win that will be known as a 'bet for the ages' for TSLA bulls as now Tesla and Musk are set to reap the benefits from a new friendlier regulatory era in the Beltway ahead," Ives wrote.

"The autonomous fast-tracking will be front and center for investors as many of the 2026/2027 goals for Tesla could be accelerated to stay on track with the China timeline for autonomous currently underway."