Tesla surged 10%, with the market speculating that it will launch new vehicles in India, and the Trump administration will relax regulations on autonomous driving

On Friday, Tesla surged 10% during intraday trading. Two major news items boosted Tesla's rise on Friday. First, reports indicated that the Trump administration would ease regulations on autonomous driving; second, Tesla refunded early reservation users in India, sparking market speculation that Musk would launch new vehicles in India.

Tesla closed up 9.8% that day, ending at $284.95, with a cumulative increase of 18% for the week.

Previously, Tesla's stock price had fallen 50% from the historical high set last December. Even with this week's gains, the stock is still expected to decline by about 30% by 2025.

Trump Administration to Ease Autonomous Driving Regulations

According to earlier media reports, the Trump administration will ease regulations on autonomous driving, reducing the cumbersome accident reporting process. U.S. Transportation Secretary Sean Duffy stated that as long as autonomous vehicles are used for "testing, demonstration, and research" for non-commercial purposes, some compliance procedures can be skipped.

The latest measures are seen as the largest deregulation of autonomous driving in the U.S., meaning that road testing of autonomous vehicles will be easier and faster, allowing car companies to experiment and demonstrate more easily, without being bogged down by red tape. The new regulations directly address the core demand for Tesla, giving the green light for Musk's plan to launch the Cybercab autonomous taxi fleet in Texas this June.

Tesla CEO Musk stated during the company's earnings call this week that Tesla expects to sell fully autonomous vehicles in Austin, Texas, in June.

Market Speculation on New Vehicle Launch in India

On the same day, according to an email seen by the media, Tesla's office in India is refunding early reservation users for the Model 3, raising speculation that the electric vehicle manufacturer is about to launch new vehicles in India.

The email stated: "We would like to temporarily refund your reservation fee. We will reach out to the market again once we finalize our sales plan in India. We hope to see you again when we are ready to launch and deliver in your country."

The email came from Tesla's domain, signed by "Tesla India." According to a customer who received a call, Tesla is also calling users who reserved the Model 3. These reservations date back to 2016, and the refunds are due to the discontinuation of the older Model 3.

Earlier this week, during Tesla's earnings call, the company stated that given the current tariff structure would double the price of Tesla vehicles, the company is being very cautious in determining when the right time to enter the Indian market would be.

Tesla's Earnings Report Earlier This Week

This week, Tesla released its first-quarter earnings report, which can be described as a "disaster," with revenue declining by 9% instead of increasing, and profits plummeting by 40%, far below expectations, while automotive revenue fell by 20%; however, the energy storage business remained strong, with deployment capacity increasing by 154%, and Powerwall installations hitting a record high for four consecutive quarters, but Tesla pointed out that the impact of tariffs on the energy business exceeded that on automotive Tesla no longer expects its vehicle delivery volume to return to growth this year, stating that the second quarter report updates this year's guidance, and changes in trade policies and political sentiment may severely impact product demand in the short term.

This financial report has raised serious concerns at JP Morgan regarding its growth prospects and high valuation. JP Morgan pointed out that the various signs presented in the report are no longer characteristic of a growth company, and the deterioration of its fundamentals will bring significant downside risks, lowering its target price to $115 and reiterating a "underweight" rating.

However, Morgan Stanley holds a different view. Although the bank has also lowered its recent earnings forecast for Tesla, it maintains an "overweight" rating and significantly raises the company's target price to $410, remaining optimistic about Tesla's advantages as the "king of electric vehicles" and looking forward to Musk's return as well as the long-term vision for autonomous driving and robotics