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The effect of Tesla stock runs on the competition in the automobile and the electric vehicle market

Written by Jannik Schmidt

Paper category

Bachelor Thesis

Subject

Business Administration>Finance

Year

2020

Abstract

Bachelor Thesis: Stock market: bull market and bear market and stock operation The following section explains the nature of bull market and bear market in the context of the stock market. It also provides insights into how stocks operate differently from bull and bear markets. All the numbers mentioned, if they are actual numbers, or just the word "number", are assumed to represent percentage gains rather than total gains. Stocks can develop in three directions: they can rise, they can remain stable, or they can fall. According to the steepness and continuity of these changes, stocks and markets are divided into different stages. For this bachelor's thesis, the flat movement called sideways is considered irrelevant and will not be further involved. The continuous movement of stocks in the same direction is called running. In this case, it does not matter whether the continuous gain or loss is a large number or a small number. A stock movement that moves upward for a duration reaches a certain amount of high returns during this period, which is called a bullish stock run. There is no universal definition of the exact time a stock must gain momentum or how much a stock must gain to be called bullish. A massive decline in stocks for a continuous period of time is called a bearish stock run. As mentioned earlier in the bull market paragraph, there is no clear line to cross the downward movement of the stock to become bearish. There are different types of bull markets and bear markets. Since these runs can range from a few hours to a few days to several decades, they are divided into different groups. In the book "A Little Book of Bull Market Trends in a Bear Market", Peter Schiff (2008, p. xxii & xxiii) explains these groups in the author's notes. These runs are called "trends" and are divided into three different time frames for bull market and bear market trends). The first time frame, the "long-term bull market or bear market trend", illustrates a long-term operation that lasts from five to two decades. Under this trend, the stock price has risen year by year, starting with double-digit numbers from the five-year line. The monthly and annual figures are not considered. The second range covers the time range from five years to several months and is called "major bull or bear market trend". These trends are explained in the same way as long-term bull or bear market trends. Third, the operation of the market may be a "correction" or a "bear market rebound." This means that there is "at least 10% reverse movement" (Schiff, 2008, xxiii), which lasts from a few days to a few weeks. The correction is the above-mentioned strong downward trend of at least 10%, and the bear market rebound represents the other side of the strong upward trend in stocks or markets. 2.3 Electric Vehicles This section provides a framework for the electric vehicle sub-market in the global automotive market. This chapter explains the electric vehicle market in section 2.3.1, including the growth rate and comparison with the fossil fuel vehicle market. It also contains a vision for the future in subsection 2.3.2, which provides a perspective on numbers and prices, and compares them with the prospects of cars made with different technologies. 2.3.1 Electric vehicles This section introduces the nature of electric vehicles and how it is established and defined. There are two types of electric vehicles: "plug-in hybrid vehicles" and "battery electric vehicles." A plug-in hybrid vehicle is a car that uses an internal combustion engine in addition to the battery. When the power of the latter is insufficient, the former will start. Therefore, these cars are mainly powered by electricity, but they are also powered by gasoline. The second type is "battery electric vehicles." A car driven only by electricity. All the electric vehicles mentioned in this bachelor's thesis include these two types, although the correct definitions are quite different as mentioned above. The different definitions of these cars are "new energy cars" for all cars that are not driven by fossils. The market share represented by these types of cars is still trending towards zero, so they are irrelevant for analysis. Subsequently, ele ctric vehicles are divided into public vehicles and private vehicles. Private cars are all vehicles used by individuals or companies for personal use, while public vehicles are electric vehicles that are used by official entities for tasks such as public transportation, cargo transportation, or military transportation. Private cars are the vast majority of products used, and are also related to this paper. In this article, I will focus on the growing private electric vehicle market, so this is what the following chapters will discuss. 2.3.2 Electric Vehicle Market This section describes the electric vehicle market, including the trend, sales volume and market value of the past ten years starting from 2012. It explains the total sales of different electric vehicle types and the market share of vehicles from 2012 to 2019, the industry as well as the electric vehicle industry. In 2012, the electric vehicle market was very small. According to the International Energy Agency, the global total number of “battery electric vehicles in use in 2012” (that is, in 2020) is 110,000. In comparison: the total number of passenger cars and commercial vehicles used worldwide in the same year was close to 1.15 billion (Wagner, 2020). Read Less