Tesla's (TSLA, Financial) shares surged by approximately 8% on Monday, fueled by renewed optimism over self-driving regulations. The rally followed a brief statement from President-elect Donald Trump on Twitter, in which he expressed his intention to accelerate the deployment of autonomous technology in the U.S. This announcement has sparked excitement among investors, particularly in Tesla, which has faced significant criticism over its Full-Self Driving (FSD) features following a series of accidents.

• Warning! GuruFocus has detected 7 Warning Signs with GS.

The Trump campaign and potential advisors have suggested that Trump's administration will seek to have looser restrictions on self-driving cars, which will speed up the adoption of technology. Although details on the new regulations are still sketchy, investors seem to agree the policy change will help organizations like Tesla that are already involved in developing self-driving cars. The increase in the stock is in line with the market abundance sparked by Trump's win in the 2024 election and other tech stocks, including those related to the new administration.

Tesla became a symbol of a close relationship with Trump, which means that it can reap the benefits from liberalization that can sweep across the self-driving and electric automobile industry. However, such an increase in Tesla's stock is attended by the following precautions. Their self-driving technologies still experience legal and safety issues even when the authorities have pledged their support for the industry. As Trump's policies start to unveil themselves, investors are going to have to turn their attention to how Tesla will be affected by the changing regulatory landscape for the increasingly crowded EV market.

This article first appeared on GuruFocus.