Tesla Stock Lifts on US Federal Autonomous Vehicle Announcement

Tesla shares were up around 10% on the Fed’s announcement.

Seth Goldstein, CFA 29 April, 2025 | 7:48AM
Facebook Twitter LinkedIn

Ladegerät mit Tesla-Logo an einer Supercharger-Schnellladestation für das Elektrofahrzeugunternehmen Tesla Motors.

Editor's Note: This analysis was originally published as a stock note by Morningstar Equity Research.

Key Morningstar Metrics for Tesla

Fair Value Estimate: $250.00

Morningstar Rating: ★★★

Morningstar Economic Moat Rating: Narrow

Morningstar Uncertainty Rating: Very High

The US Department of Transportation announced high-level plans to develop an autonomous vehicle framework, with the goal of creating one federal regulatory framework for AV vendors. Tesla TSLA shares were up around 10% at the time of writing on the news.

Why it matters: There is currently no federal autonomous vehicle regulatory framework in the United States. As a result, AV vendors like Waymo or Tesla must secure separate regulatory approvals in each state. This creates a regulatory barrier that slows AV adoption.

The bottom line: We maintain our $250 per share fair value estimate for narrow-moat Tesla. Our forecast already assumed Tesla’s robotaxi rollout would not be slowed down by regulatory barriers. As a result, we see no reason to change our outlook based on the news.

At current prices, we view Tesla shares as fairly valued, with the stock trading above our fair value estimate but in 3-star territory. We recommend investors wait for the stock to offer a margin of safety before recommending an entry point.

Big picture: The announcement was light on details, but said the DOT plans to create a federal framework to regulate autonomous vehicles that is intended to replace the regulatory process of all 50 states. The framework will be added to the Federal Motor Vehicle Safety Standards.

This mirrors our thesis that the US government would create an AV framework to be run by the National Highway Traffic Safety Administration, the department that currently runs the FMVSS. We think this will help accelerate AV adoption in the ride-hailing market.

As AVs can offer consumers cheaper rides, with reduced regulatory hurdles, we forecast robotaxis will make up 50% of all ride-hailing rides in the US and Canada by 2035.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Seth Goldstein, CFA  Seth Goldstein, CFA, is an equity analyst for Morningstar

© Copyright 2025 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures

OSZAR »