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Key Takeaways

• Tesla stock rose 1.94% to $325.31 after the U.S. eased rules on autonomous vehicles.
• The NHTSA will simplify exemption processes for self-driving cars without human controls.
• Tesla plans to launch its robotaxi service in Austin, Texas, on June 22.
• Competitors like Uber and Lyft fell amid concerns over robotaxi competition.
• Waymo leads in active robotaxi services, but Tesla eyes future dominance.

Tesla Inc. (TSLA) stock closed at $325.31 on June 13, up 1.94% after reports emerged that the U.S. government is moving to ease restrictions on self-driving cars.

Image Source: Yahoo! Finance

This regulatory shift should boost Tesla’s ambitious plans to roll out its robotaxi service, potentially transforming the future of ride-sharing and autonomous transportation.

US Eases Regulations on Autonomous Vehicles

The National Highway Traffic Safety Administration (NHTSA) announced its intention to streamline the exemption process for self-driving cars without steering wheels or brake pedals. Previously, this process delayed manufacturers for years. Now, the NHTSA expects to approve most exemption requests within months.

This is a significant development for Tesla, which has faced challenges in deploying autonomous vehicles due to outdated federal safety standards. These regulations currently mandate human driving controls, hindering efforts to mass-produce self-driving cars.

Impact on Tesla and Ride-Hailing Rivals

Tesla’s stock price reacted positively to the news, while shares of Uber and Lyft dipped. Investors foresee potential disruption to traditional ride-hailing as Tesla prepares its self-driving “Cybercab” fleet. Elon Musk recently confirmed that the robotaxi service will debut in Austin, Texas, on June 22, subject to final adjustments.

Musk emphasized the company’s commitment to robotaxis, projecting market dominance. However, experts warn that economic factors, like maintaining costly technology versus human-driven cars, could limit profitability.

Competition From Established Players

Tesla lags behind Waymo, Google’s self-driving unit, which operates robotaxis in multiple cities. Waymo has delivered over 10 million paid rides, showing significant growth compared to Tesla’s yet-to-launch service. Waymo’s vehicles are active in San Francisco, Los Angeles, Phoenix, and Austin.

Despite this, Musk remains confident in Tesla’s potential to dominate the sector, citing technological superiority during the April earnings call. He boldly projected Tesla could capture “99% market share” in the robotaxi field.

Skepticism Over Robotaxi Viability

Industry observers question the business model for robotaxis, citing high operational costs and competition from low-wage human drivers. Companies like General Motors and Ford abandoned their autonomous vehicle projects after massive investments yielded limited returns.

Musk acknowledged that Tesla’s June 22 robotaxi rollout date is tentative, suggesting delays remain possible. While Tesla aims high, it must catch up with more established robotaxi networks that are already providing services.

Performance Overview

Tesla’s trailing total returns show mixed performance. Year-to-date, Tesla is down 19.45%, while its one-year return is a strong 78.28%. Over three years, Tesla returned 50.79%, compared to the S&P 500’s 59.40%. However, the five-year return remains impressive at 421.73%, dwarfing the S&P 500’s 96.53%.

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