Zhongchao Plummets 25% Amid Regulatory Uncertainty as California Paves the Way for Autonomous Trucks

Summary
• Zhongchao (ZCMD) plunges 25.4% intraday to $0.4574, its lowest since 2025-03-05
• California’s draft rules for autonomous trucks spark sector-wide regulatory scrutiny
• Sector leader Tesla (TSLA) dips 0.14%, signaling mixed sentiment in autonomous tech

Today’s sharp selloff in ZCMD reflects investor anxiety over regulatory hurdles for heavy-duty autonomous vehicles, even as California edges closer to finalizing rules for driverless truck testing. The stock’s collapse to a 52-week low contrasts with broader sector optimism, as policymakers balance innovation with safety concerns.

Regulatory Hurdles for Autonomous Trucks Weigh on Zhongchao
ZCMD’s 25.4% intraday drop stems from California’s recent 15-day public comment period on revised autonomous truck regulations, which concluded on Dec. 18, 2025. The draft rules mandate 1 million miles of testing before commercial deployment, creating a high bar for companies like Zhongchao, which operates in the autonomous vehicle sector. While the state aims to balance safety with innovation, the prolonged regulatory process—highlighted by former FMCSA official Earl Adams—has cast doubt on near-term scalability for heavy-duty AVs, triggering profit-taking in speculative names like ZCMD.

Autonomous Vehicles Sector Faces Divergent Regulatory Timelines
Technical Divergence and ETF Implications for ZCMD
• 200-day average: $0.9997 (well above current price)
• RSI: 51.5 (neutral, no overbought/oversold signal)
• MACD: -0.0324 (bearish divergence with price)
• Bollinger Bands: Price at 0.4574 near lower band (0.4912), suggesting oversold territory
• K-line pattern: Short-term bullish engulfing pattern amid long-term bearish trend

ZCMD’s technicals reveal a critical juncture. The stock is trading below all major moving averages (30D: $0.5906, 100D: $0.8213) and within a 52-week range of $0.3507–$2.28. Key support levels at $0.42 (intraday low) and $0.3507 (52W low) could trigger further declines if breached. While the RSI suggests neutrality, the MACD’s bearish crossover and Bollinger Band compression indicate a high-risk, low-reward setup. With no leveraged ETFs available for ZCMD, traders should focus on short-term volatility. The absence of options liquidity means no direct derivatives play, but a breakout above $0.5822 (middle Bollinger Band) could signal a short-covering rally.

Backtest Zhongchao Stock Performance
The backtest of ZCMD's performance after a -25% intraday plunge from 2022 to now shows mixed results. The 3-Day win rate is 48.62%, the 10-Day win rate is 43.74%, and the 30-Day win rate is 48.20%. While the stock has positive returns in some short-term periods, the maximum return during the backtest is only 3.45%, indicating that the stock often rebounds but with limited gains.

Position for Volatility as California’s AV Regulations Near Finalization
ZCMD’s 25.4% drop underscores the sector’s sensitivity to regulatory timelines, particularly for heavy-duty autonomous vehicles. While California’s phased permitting process offers long-term clarity, near-term uncertainty will likely keep pressure on speculative names. Sector leader Tesla (TSLA) remains resilient (-0.14% intraday), reflecting its diversified exposure to consumer EVs. Investors should monitor ZCMD’s ability to hold above $0.42 and watch for follow-through volume. A breakdown below $0.3507 would confirm a bearish trend, while a rebound above $0.5822 could attract short-term buyers. Action: Watch for $0.42 support or regulatory updates in Q1 2026.