Tesla Rides Higher on Self-Driving Regulation Report

The Trump trade might have settled down at the end of last week, but Tesla keeps on truckin’.

Tesla’s stock popped almost 6% on Monday following a Bloomberg report that Donald Trump’s transition team is planning to make an overhaul of self-driving automobile regulation a top priority once he re-enters the White House. Specifically and unsurprisingly, that means a big loosening of the rules around cars that can operate without human drivers.

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Although Trump himself has reportedly expressed a certain unease about self-driving cars in the past, this wouldn’t be the first time he’s paved the way for more autonomous driving tech. In 2017, the first Trump administration dropped Obama-era rules policing the technology, and on his way out the door in 2021, the administration exempted self-driving cars from a handful of crash standards.

Now, sources told Bloomberg, the incoming Trump administration is hunting for people to quickly assemble a new regulatory framework. The news sent Tesla’s stock up, thanks to Trump’s ongoing alliance with CEO Elon Musk, who has linked the company’s future to its ability to bring a robotaxi service to market:

• Tesla’s stock has continued to rise even as the broader Trump Trade has gently deflated. By Friday, US markets had slumped to pre-election levels. The downturn was partly due to Trump’s nomination of noted vaccine skeptic Robert F Kennedy Jr. as health secretary, which hit Big Pharma stocks with a bear-dumping, whale-decapitating force.
• Other companies with big investments in the future of self-driving cars didn’t fare as well as Tesla on Monday. Uber and Lyft shares both dropped around 5%. Google parent Alphabet’s stock did tick up, but only 1.7% despite its well-established robotaxi wing Waymo. It seems for the moment, the markets value Musk’s bromance with Trump above all else.

Trust Issues: A major obstacle for getting self-driving tech on the road is building public trust, which will happen only when autonomous cars stop hitting actual obstacles on the roadways. Submitting a false report about a crash won’t help anybody’s cause, but that’s exactly what General Motors admitted to doing last week. The company conceded that it failed to disclose key details about a 2023 crash in San Francisco where a self-driving car from GM’s automated driving unit Cruise struck a pedestrian and dragged her 20 feet down the road, the US Department of Justice said. GM will pay a $500,000 criminal fine as a result, plus it’ll have to open its doors to investigations and submit yearly reports to the US Attorney’s Office.