Actions of Tesla (Tsla 9.95%)) Climb Friday. The stock of the electric vehicle manufacturer (EV) had won 8.7% at noon he. The climb occurs while S&P 500 was mainly flat and the Nasdaq Composite Pink modestly.
What fueling optimism? Yesterday, the Trump administration announced regulatory changes that could help Tesla make its autonomous ambitions earlier.
Relax
The Transport Department has announced that it will serve some of its rules to help car manufacturers deploy autonomous cars more quickly. The administration seems eager to beat China in a race to develop new generation technology. The new rules allow exemptions from certain federal standards for security tests, and accident declaration requirements for autonomous software will be rationalized.
“We are in a race with China to innovate, and the issues could not be higher,” wrote Trump’s transport secretary Sean Duffy in a statement, saying that rule changes “cut administrative formalities and bring us closer to a single national standard”. Investors seemed to believe that the new frame will accelerate the Tesla autonomous calendar.
Do or break?
The announcement arrives at a critical moment for Tesla. The company has seen its sales fall on the key markets, even if sales of electric vehicles in general are increasing. In the recent call for results of the company, Elon Musk said that he would spend more time to his CEO functions after the growth of investors’ discontent; Many consider its role in Trump administration as removing its ability to effectively direct Tesla. And there were reactions to consumption in the cup movements of the Musque government.
Tesla faces increased competition from manufacturers of Chinese electric vehicles as Byd as well as inherited car manufacturers. It seems that the first domination that Tesla is appreciated, was eroded, but the longtime promise of Musk of full autonomous capacity in Teslas would undoubtedly help the company to find an advantage. The question is when it happens. I am not convinced that it will be soon, and I continue to think that the stock is overvalued.
Johnny Rice has no position in the actions mentioned. The Motley Fool has positions and recommends Tesla. The Motley Fool recommends Byd Company. The Motley Fool has a policy of disclosure.
