Tesla Inc TSLA shares are racing higher Monday morning following reports that President-elect Donald Trump plans to ease restrictions for self-driving vehicles.
What To Know: Members of Trump’s transition team have said they plan to prioritize a federal framework for autonomous vehicles, according to Bloomberg.
The report indicates that the Transportation Department can issue rules through the National Highway Traffic Safety Administration that would make it easier to operate self-driving cars, but a bipartisan piece of legislation from Congress would clear the way for mass adoption.
Former Uber executive Emil Michael is reportedly one candidate being considered for Transportation secretary. Michael has already spoken with Trump’s team and potential staffers, according to people familiar with the matter.
Tesla CEO Elon Musk, who donated to Trump and supported him throughout his campaign, announced plans in October to begin producing the Cybercab robotaxi in 2026. Current regulations pose challenges to Musk’s plans, including a cap on how many autonomous vehicles can be deployed.
The National Highway Traffic Safety Administration (NHTSA) currently allows for the deployment of 2,500 self-driving vehicles per year under a granted exemption. Efforts to increase those limits have failed multiple times. The report indicates that a bill for self-driving cars was floated during Trump’s first term, but did not make it through the Senate. Another attempt at the beginning of the Biden administration failed as manufacturers pushed to include language preventing consumers from forming lawsuits.
Last week, Tesla shares moved lower on reports that Trump was planning to get rid of consumer tax credits for EVs. Trump's team is reportedly planning to squash the $7,500 EV tax credit on vehicle purchases as part of a broader tax-reform plan.
Getting rid of the tax credit could significantly impact the United States' EV transition efforts, but Musk reportedly told Trump's team that he supports putting an end to the EV tax credit. Although it may impact sales in the short term, it will hurt Tesla competitors much more, according to Wedbush analyst Dan Ives.
"We expect Musk to have a big seat at the table as these EV discussions happen within the Trump transition team. We believe any sell-off in Tesla from these reports is the wrong knee-jerk reaction and we would be buyers," Ives said in a note last week.
TSLA Price Action: Tesla shares were up 6.75% at $342.38 at the time of publication, according to Benzinga Pro.
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Photo: courtesy of Tesla.
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