As the political temperature cools down in the aftermath of Donald Trump’s victory, analysts are now starting to evaluate the possible implications. Everyone saw Elon Musk’s involvement in the political campaign and it is clear he intends to be an integral part of policymaking going forward. But Elon Musk shouldn’t be the only one eager to see the US progress when it comes to autonomous vehicles. America’s biggest rival, China, is racing ahead in this field and that might prompt the nation’s policymakers to come together and improve regulation. That Elon Musk finds himself right at the center of this scenario may just be the icing on the cake for Tesla.
China is home to companies like Baidu and Huawei, both of which are making significant strides in developing autonomous vehicle technology. Just last month, Baidu received a license to test its Apollo robotaxi in Hong Kong. Since its inception, Apollo has completed 8 million autonomous rides compared to Alphabet’s Waymo’s 5 million rides. Waymo operates in just 4 US cities while Apollo operates in over 10 cities across China. On top of this, the company is now expanding its operations globally, starting with Hong Kong.
As we saw with Tesla, a headstart in autonomy is a big deal. As the tech grows exponentially, the first-mover advantage is amplified. Of all the people on the planet, Elon Musk knows this. After all, he achieved this with Tesla. But now the company faces a new challenge: regulation. The US is slow in deploying autonomous vehicles because of very strict regulations. Elon Musk has been critical of this strictness in the past and has always believed the government needs to consider the importance of this technology and ease the rules.
As Trump takes charge of the country, defeating China in AI seems to be the top priority. AI is an integral part of autonomous vehicle technology, especially in object detection, adaptive behavior, and decision-making algorithms. America cannot challenge China in AI while losing the autonomy battle on the roads. It wouldn’t be wrong to say that China’s technological progress may finally prompt US lawmakers to ease up on regulations and help Elon Musk accelerate the commercial deployment of robotaxis. If that starts to happen, Tesla may well become a multi-trillion company within a few months, if not weeks.
Tesla is 23rd on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 99 hedge fund portfolios held TSLA at the end of the third quarter which was 85 in the previous quarter. While we acknowledge the potential of TSLA as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
