Tesla stock is surging as Trump looks to hand Elon Musk another win

Tesla (TSLA+3.10%) stock was popping again early Monday as President-elect Donald Trump’s team reportedly plans to hand key ally Elon Musk another win.

Members of Trump’s transition team have said they plan to make a federal framework for fully autonomous vehicles a priority for the incoming Department of Transportation, Bloomberg News reported. Current federal rules make it difficult to deploy vehicles without steering wheels or pedals like Tesla’s advertised Cybercab.

That could be a major boon for Musk, who has repeatedly touted Trump’s election win as a victory for the U.S. and his own companies. In October, he told investors that he would use a task force dedicated to slashing government inefficiency to push for a national approach to regulating driverless vehicles.

“National approval is important,” Musk said during an earnings call. “If there is a Department of Government Efficiency (DOGE), I will try to make that happen.”

Although the federal government has looked at national regulations for autonomous vehicles in the past, standards and guidance issued by federal regulators have been relatively scarce, leaving it up to local governments to figure out their own approaches. Nineteen states currently have laws on the books allowing driverless vehicles to operate on public roads.

Musk has said he expects Tesla to get approval to launch rideshare services in California, Texas, and “some other states” in 2025, along with approval for a “fully autonomous” version of the company’s driver-assist software. In October, he said he would be shocked if Tesla failed to get approval in California, where rivals like Google’s Waymo and Amazon’s Zoox have some operations.

Bloomberg reports that bipartisan legislation is being discussed to design federal rules around autonomous vehicles. Without legislation, the Transportation Department would need to issue rules through the National Highway Traffic Safety Administration to make deployment easier. The agency currently allows companies to deploy up to 2,500 self-driving vehicles each year.

Tesla stock gained almost 6% in pre-market trading Monday. Shares are up 29% year-to-date, largely thanks to a stock surge following Trump’s election victory.

Musk has significant influence over the president-elect, although it’s unclear exactly how far that goes. He’s joined many of Trump’s meetings and meals since his victory, including meetings with foreign leaders and ambassadors, and has reportedly requested that SpaceX employees be hired as top government officials, including at the Department of Defense.

Last week, Trump tapped Musk and former presidential candidate Vivek Ramaswamy to lead DOGE, which has been described as an outside-of-government group. They aim to cut some $2 trillion from the budget, or about one-third of all federal spending, according to Musk.

Musk is expected to play a role in guiding the Trump administration’s artificial intelligence initiatives, something that would help both X (META-4.03%), Tesla, and xAI, and participate in discussions over tariffs on Chinese products. Trump’s team also plans to kill the $7,500 tax credit for electric vehicle purchases, which has helped both Tesla and its rivals, although Musk expects his company to be less affected than others.

Musk’s SpaceX could also benefit from Trump’s presidency, given its CEO’s comments signaling his belief that regulations should be changed so that companies don’t need to repeatedly get permits to launch rockets.

And over the weekend, Trump appointed Musk ally and Commissioner Brendan Carr to lead the Federal Communications Commission, which will likely help SpaceX’s Starlink subsidiary.