Multi-scale analysis of the co-movement between China's new energy vehicle industry and Tesla: Evidence from capital market

Abstract

China is currently the world's largest new energy vehicle market, and the development of its new energy vehicles is crucial to the sustainable development of mankind. As a leader in the new energy vehicle industry, Tesla's entry into the Chinese market has an important impact on its new energy vehicle industry, and the study of the relationship between the two is of great significance in promoting the development of China's new energy vehicle industry. Therefore, we analyzed the complex relationship between Tesla and China's new energy vehicle industry from 2013 to 2022 based on the stock market perspective using modal decomposition, Maximum mutual information coefficient, and transfer entropy. Mutual information coefficient results show that Tesla has stronger co-movements with China's New Energy Vehicle Manufacturing sector, and its strength is highest in the medium- and long-term time scales, up to 0.196 and 0.529, respectively. whereas the transfer entropy results show that Tesla has a stronger information transfer effect on the Vehicle Manufacturing sector and Charging Pile sector than on the New Energy Vehicles Battery sector and New Energy Vehicles Parts sector. However, in general, Tesla's information overflow to the whole Chinese new energy vehicle industry is on the rise. The Chinese government can appropriately give Tesla certain favorable policies and encourage Chinese enterprises to cooperate with it, giving full play to Tesla's catfish effect and technology demonstration effect, and then promoting the further development of China's new energy vehicle industry.