President-elect Donald Trump announced former Congressman Sean Duffy to oversee the Department of Transportation (DOT) on Monday.
Here's a look at how the latest Trump selection could affect companies in the transportation sector.
The Details: Duffy, who served in the U.S. House of Representatives from 2011 to 2019, most recently worked as Fox News Media host. He left the position on Monday, according to the New York Times.
Duffy is the second Fox News employee to be nominated by Trump for a cabinet position. Last week, Trump picked Fox News host Pete Hegseth as Defense Secretary despite lack of government experience.
In 1997, he was a cast member on MTV's "The Real World: Boston.”
As Transportation Secretary, Duffy would be in charge of major federal agencies, including the Federal Aviation Administration (FAA) and the National Highway Traffic Safety Administration (NHTSA).
"He will prioritize Excellence, Competence, Competitiveness and Beauty when rebuilding America's highways, tunnels, bridges and airports. He will ensure our ports and dams serve our Economy without compromising our National Security, and he will make our skies safe again by eliminating DEI for pilots and air traffic controllers," Trump said in his announcement.
Air Travel
If approved by the Senate, Duffy can be expected to address ongoing aviation safety issues. This could include matters relating to Boeing Co. BA and air traffic control challenges. As part of Trump's focus on efficiency, Duffy could potentially work to enhance safety measures while streamlining regulations.
Major airline companies like Delta Air Lines, Inc. DAL, United Airlines Holdings, Inc. UAL and American Airlines Group, Inc. AAL may be affected by potential policy and regulatory changes, as well.
‘Overall Negative For EV Industry’
The DOT also oversees the National Highway Traffic Safety Administration (NHTSA) which is expected to focus on regulatory frameworks for electric vehicles and autonomous driving technologies in the near term. The NHTSA is likely to establish guidelines for emerging technologies like Tesla, Inc.'s TSLA autonomous driving software.
Recent reports suggest Trump has plans to ease restrictions on self-driving vehicles, which could help companies like Tesla expand FSD and bring robotaxis to the market.
Tesla CEO Elon Musk campaigned heavily for Trump and provided millions to his campaign coffers ahead of Election Day.
At the same time, it seems likely that the incoming Trump administration will eliminate or reduce many of the EV purchase incentives included in the Biden administration’s Inflation Reduction Act (IRA).
Wedbush analysts said that Tesla’s rivals, U.S.-based EV startups like Rivian Automotive, Inc. RIVN and Lucid Group, Inc. LCID, could face a major set-back if Trump rolls back current EV tax incentives and rebates, as reports suggest.
"We believe a Trump presidency would be an overall negative for the EV industry as likely the EV rebates/tax incentives get pulled," Wedbush analysts wrote.
Railroads
If Duffy is confirmed, he will also oversee the Federal Railroad Administration (FRA), which is responsible for safety measures across the rail network. He may address safety concerns following incidents like the East Palestine derailment in 2023.
Duffy will also manage billions in federal grants aimed at improving rail infrastructure and upgrading aging rail systems to enhance efficiency and safety. Railroad companies including CSX Corp. CSX, Norfolk Southern Corp. NSC and Union Pacific Corp. UNP may benefit from such improvement projects.
Investors can also monitor the broader transportation sector through ETFs which track its performance including the iShares Trust iShares U.S. Transportation ETF IYT and the First Trust Nasdaq Transportation ETF FTXR.
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