'Race with China to out-innovate': Trump administration eases safety rules for Tesla and other automakers
Representative image
In a policy shift aimed at accelerating US leadership in
autonomous vehicle technology
, the Trump administration is easing federal safety regulations to help domestic automakers like
Elon Musk
's
Tesla
stay ahead of Chinese rivals.
The
US department of transportation
on Thursday unveiled a new framework that allows American companies to seek exemptions from certain safety rules when testing
self-driving cars
for non-commercial purposes—such as research and public demonstrations.
"We're in a race with China to out-innovate, and the stakes couldn't be higher,' said Transportation Secretary Sean Duffy in a statement, justifying the move. 'Our new framework will slash red tape and move us closer to a single
national standard
," he added.
The move is intended to give US automakers greater flexibility as they push to develop fully autonomous vehicles.
The administration is also revising crash reporting requirements for self-driving systems, a move directly addressing longstanding complaints from Tesla CEO Elon Musk, who has argued the rules are overly burdensome. Tesla, as the leading seller of partially automated vehicles in the US, has been disproportionately impacted by current reporting demands.
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While the obligation to report crashes will remain, the Transportation Department says it will be 'loosened' to remove 'unnecessary and duplicative' requirements—striking a balance between regulatory oversight and technological progress.
The announcement comes just a day after Musk told investors that Tesla will begin rolling out self-driving taxis in Austin, Texas, this June. As China's BYD and other rivals rapidly scale up their autonomous vehicle programs, the pressure is mounting on the US to respond.
Previously, such exemptions were granted primarily to foreign vehicles entering the US market whose home-country regulations differed from those in the US.
Also read:
'India a very hot market but...': Elon Musk-led Tesla says 100% car tariffs make customers anxious
The incentive for Tesla comes just days after the automaker reported a stark drop of 71 per cent in profits in its Q1 earnings report. European sales of Tesla vehicles experienced a significant downturn, showing a 45 per cent reduction in the EU market and an even more severe 62 percent decrease in Germany, as reported by the European Automobile Manufacturers' Association (ACEA).
Tesla showrooms throughout Europe and the United States have faced vandalism and boycott actions, triggered by Musk's endorsement of public sector reductions and his alignment with far-right personalities abroad.
Protesters in Milan displayed an effigy of Musk, whilst demonstrators in Berlin and London branded Tesla vehicles as "Swasticars."
Soon after the reports were released, Musk stated his intent on shifting focus back to Tesla. During Tuesday's earnings call, he announced plans to reduce his time working for the 'Department of Government Efficiency' – a post he holds in Trump's administration – to just one or two days per week starting May. Tesla's shares rose nearly five percent following the announcement.
Read more:
Tesla's profits plunged by 71% in Q1 2025. Can Elon Musk turn it around?
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