Surprising robotaxi news sends Tesla stock surging

Tesla finished a strong week with a nearly 10% jump on April 25, driven by a government push toward self-driving vehicles.

U.S. Transportation Secretary Sean Duffy introduced a new framework for autonomous vehicles on Thursday that eases some rules. 

The new rules now allow some self-driving cars without rearview mirrors to operate on roads and let carmakers report minor crashes monthly, with a new property damage threshold for less serious incidents.

Duffy said the new framework boosts autonomous vehicles so U.S. automakers can compete with Chinese rivals.

“This Administration understands that we’re in a race with China to out-innovate, and the stakes couldn’t be higher,” Duffy said in a news release.

“As part of DOT’s innovation agenda, our new framework will slash red tape and move us closer to a single national standard that spurs innovation and prioritizes safety.”

The news is a boost for Tesla, which has made a big bet on self-driving technology.

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The electric vehicle maker plans to roll out a robotaxi service in Austin this June and begin producing its Cybercab robotaxi in 2026.

Tesla  (TSLA)  stock surged 18% this week, yet remains down 29% year-to-date.

Tesla received more good news this week

This year, Tesla CEO Elon Musk's move into politics has frustrated many long-time Tesla fans, leading to weaker sales in major markets like Europe, China, and California.

Decreased demand for Tesla cars and concerns about Musk’s focus on the company have fueled a sharp sell-off in Tesla’s stock this year.

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Tesla reported weak earnings earlier this week, including a 20% year-over-year decline in automotive revenue and a 71% plunge in net income. Still, Musk gave investors some good news: He would spend more time at Tesla.

"Starting next month, I will be allocating far more of my time to Tesla," he said, adding that "the major work of establishing the Department of Government Efficiency is done."

Musk said the robotaxi debut this June will have an initial fleet of “maybe 10 to 20 vehicles,” and the operations will “scale up rapidly after that.”

According to Musk, the goal is to expand the service to many U.S. cities by the end of this year, with “millions of Teslas operating fully autonomously in the second half of next year.”

With regard to tariffs, Musk said Tesla is in a stronger position than most rivals.

“Something that Tesla has been working on for several years is to localize supply chains,” Musk said. “Tariffs are still tough on a company when margins are still low, but we do have localized supply chains in both America, Europe, and China, so that puts us in a stronger position than any of our competitors.”

Tesla closed at $284.95 per share on April 25.

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