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Tesla Soars Over 6% In Premarket Trading As Trump Administration Reportedly Seeks To Ease FSD Norms

Benzinga ·  Nov 18, 2024 12:50

Tesla Inc. is trading up over 6% in premarket trading after a report on Sunday suggested that the upcoming regulatory framework might ease mandates for self-driving vehicles.

What Happened: The transition team of President-elect Donald Trump has told advisors that it aims to make a framework for fully self-driving vehicles a priority for the Transportation Department, reported Bloomberg, citing people familiar with the matter.

Tesla CEO Elon Musk recently secured a position to lead the newly created Department of Government Efficiency (DOGE) in the Trump administration, supported federal rules for autonomous vehicles in Tesla's third-quarter earnings call, saying he would use any role to push the government to allow autonomous vehicles to be used nationwide.

National Highway Traffic Safety Administration allows automakers to deploy only 2,500 autonomous vehicles per year, while efforts to increase this number have repeatedly failed.

Why It Matters: In October, Musk unveiled Tesla's long-awaited robotaxi, which aims to mass produce 'Cybercabs' by 2026. Investors and market analysts are considering robotaxi's success as a major factor for the company's valuation, while some investors remain skeptical about robotaxi's success in regulatory approval.

In October, ARK Investment Management said that Tesla's driverless ride-hailing plans could unlock $11 trillion in revenue potential, exceeding the total addressable market that ride-hailing companies Uber Technologies Inc. and LYFT Inc. are targeting.

The Future Fund Managing Partner Gary Black has repeatedly voiced skepticism about Tesla maintaining a monopoly in the unsupervised autonomy market, citing competition from Alphabet Inc -backed Waymo, Baidu and Mobileye Global who has already received approval to deploy their autonomous vehicles.

Price Action: Tesla is trading 6% higher at $340 in premarket trading. The stock closed at $320.72 in a regular trading session on Friday, gaining 3.07% for the day. In after-hours trading, the stock edged up 0.0062%. Year to date, Tesla's stock has risen by 29.10%, according to data from Benzinga Pro.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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