Tesla Gains as Trump Administration Eyes Federal Framework for Autonomous Vehicles
In This Article:
Tesla (TSLA, Financials) shares rose sharply in premarket trading Monday following reports that the incoming Trump administration plans to prioritize a federal framework for fully autonomous vehicles.
According to sources, the Department of Transportation could start giving the framework priority attention.
According to Wedbush Securities analyst Dan Ives, the advancement in rules on driverless cars marks a major turning point. Under the expected legislative changes, Ives observed that Tesla's strategy orientation in autonomous and artificial intelligence sectors might help.
Particularly for Tesla's autonomous projects, including Cybercabs, "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," Ives added.
With Tesla in a prime position to profit, Wedbush projects the market potential for autonomous and artificial intelligence-driven applications at $1 trillion. Under the Trump administration, the company expects faster regulatory clearances, thereby overcoming obstacles Tesla has encountered lately.
With a price target of $400 per share, Wedbush maintains Tesla's "Outperform" rating. Tesla shares are up 7% in Monday's early market trading.
In other news, Tesla just revealed the Cybercab, a totally driverless electric car meant for ride-hailing companies, with manufacturing intentions starting before 2027. Plans call for the business to extend a ride-hailing service it is testing in California using driver-supervised Model 3 and Model Y vehicles once autonomous cars are operational.
Third quarter net profits for Tesla was $2.2 billion, a 17% rise from year before. The business delivered 462,890 cars during the quarter, a 6.4% year-over-year rise; revenue climbed by 8% to $25.2 billion.
In the United Kingdom, the business has opened 17 self-service test facilities where consumers may try autonomous electric cars free from direct human involvement. This project intends to simplify test-driving procedures and enhance consumer experience.
This article first appeared on GuruFocus.