The Impact of Environmental Regulation on Technological Innovation of Automobile Industry in China’s Market- A Case by Tesla

Abstract

With the negative externalities of the development of the automobile industry increasingly obvious, the government's environmental regulations will force the technological innovation of the automobile industry, the case of Tesla. The paper collects the R&D investment data, environmental regulation intensity data, and sale revenues data of Tesla from 2012 to 2020 and tests the impact of environmental regulations on the automobile industry by constructing the econometric regression model in Excel. The results show that environmental regulations significantly positively impact technological innovation input (R&D) and output (Sale) on Tesla. On this basis, the paper cuts forward the suggestions for the continuous development of automobile companies. The company should invest more in R&D to make constant technological innovation with the help of the government's environmental regulations.