205 / 2024-04-23 10:13:38

Optimal Strategies in Electric Vehicle Battery Closed-Loop Supply Chain Considering Government Subsidies and Echelon Utilization

Closed-loop supply chain; Waste electric vehicle battery; Echelon utilization; Government subsidy; Game theory

With the thriving adoption of electric vehicles, the disposal of waste power batteries has become an environmental concern. These batteries, although unsuitable for vehicular use, hold potential for secondary applications through echelon utilization and remanufacturing. Therefore, this study examines an electric vehicle battery closed-loop supply chain including a battery manufacturer and a retailer. Optimal pricing strategies and technological effort decisions of the supply chain members are derived based on a Stackelberg game. Four government subsidy policies are considered to promote recycling and reuse of waste electric vehicle batteries, namely, no subsidies, subsidies for production research and development (R&D), recycling and remanufacturing, respectively. Results reveal that both echelon utilization and subsidies for recycling can significantly increase the recycling rate of waste electric vehicle batteries. While echelon utilization boosts the profit of retailer and the whole supply chain, it may have a negative impact on manufacturer’s inclination to remanufacturing and its profit. Moreover, subsidies for production research and development are preferred by the supply chain and its members from the profit-oriented perspective.