Tesla (NASDAQ: TSLA) investors have had a lot to digest this week. The U.S. election results sparked a rally in the stock. That’s because it has ramifications that could directly impact Tesla’s business — and many think it will be in a positive way.

That led Tesla stock to soar by 27.7% as of late Friday morning, according to data provided by S&P Global Market Intelligence. It’s not just because CEO Elon Musk looks to have gotten close to the president-elect, but rather how that could meaningfully impact Tesla’s business.

Tesla can reap the benefits

On the surface investors could think that policies in a Donald Trump presidency will negatively impact Tesla. It’s possible, if not likely, that electric vehicle (EV) tax credits will be reduced or eliminated, and Trump has signaled tariffs imposed on Chinese imports may be significant. That could lead to a backlash from Chinese leaders, and Tesla’s largest production plant is in Shanghai, China.

Yet a reduction or elimination in EV tax credits could be beneficial for Tesla. It could reduce competition as companies with unprofitable EV businesses throttle back. That would be a win for the sector leader. But the real gold at the end of Tesla’s rainbow is the potential with its self-driving technology.

Tesla unveiled its self-driving “Cybercab” robotaxi last month, which it expects to put into production by 2027. But investors now think that timeline could be compressed. That’s because Musk might have more of a say in the regulatory and approval process. In Tesla’s third-quarter conference call last month, Musk stated, “There should be a federal approval process for autonomous vehicles.” That currently is done at the state level.

He could use his standing with the upcoming administration to push for faster approval. His company also may receive less scrutiny from other areas of the federal government. Investors are now betting that if Tesla can begin selling its full self-driving technology and fully autonomous vehicles sooner than planned, it will be a boon for the company’s bottom line.

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Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.