The leader of the electric car manufacturer Tesla Motors (TSLA, Financial) is positioned for a significant transformation as the incoming Trump administration prioritizes the development of artificial intelligence (AI) and autonomous vehicles. According to Wedbush analysts, Tesla stands out as the most undervalued AI-driven stock in the current market. With an estimated $1 trillion in potential AI-related value, the firm is projected to reach a $2 trillion market valuation within 18 months.

Analysts at Wedbush have increased the price target of Tesla's car maker to $400 while retaining the Outperform' rating. They pointed to the belief that the Trump administration will provide a clear federal picture on self-driving cars. This will help clear the CAV regulatory albatross preventing Tesla from deploying the FSD suite and the planned Cybercabs.

The report also recommended that the administration propose an AI Czar to spur technological growth. However, possible obstacles are expected to worsen during the EV tax credit rollbacks, such as abolishing the $7,500 tax credit for Tesla. Wedbush also highlighted the increased affiliation between Elon Musk and President Trump as boosting Tesla's regulation.

These advancements fit in Tesla's strategic plan to corner the market for AI mobility, although competitors, notably from China, are also improving. These regulatory changes have attracted much attention from investors and market observers as they may well recast the competitive landscape of the global autonomous vehicle market.

This article first appeared on GuruFocus.