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Remanufacturing electric vehicle battery supply chain under government subsidies and carbon trading: Optimal pricing and return policy

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  • Tsao, Yu-Chung
  • Ai, Ho Thi Thu

Abstract

The global electric vehicle (EV) market has experienced considerable growth over the last several decades to meet the demand for lower emissions and achieve sustainable development goals. This study considers the remanufactured electric vehicle battery (EVB) supply chain under government subsidies and carbon trading policies. The Stackelberg game theory model was used, in which four decision makers were specified to follow a given sequence. Regular EVB suppliers make decisions based on that of green EVB suppliers to finalize EVB wholesale prices, whereas EV manufacturers and third parties make decisions based on EV selling and return prices to maximize their profits. The results show that carbon trading regulations are important for managing carbon emissions and do not increase the return rate and remanufactured EVB production volume. Moreover, green suppliers obtain a higher profit under government subsidies, which leads to increased EVB return rates and reduces the market price and cost of materials. The total carbon emissions were reduced significantly by combining regular and recycled materials, which demonstrates that remanufacturing operations are among the most efficient methods of mitigating the environmental impacts of used batteries.

Suggested Citation

  • Tsao, Yu-Chung & Ai, Ho Thi Thu, 2024. "Remanufacturing electric vehicle battery supply chain under government subsidies and carbon trading: Optimal pricing and return policy," Applied Energy, Elsevier, vol. 375(C).
    • Handle: RePEc:eee:appene:v:375:y:2024:i:c:s0306261924014466
    DOI: 10.1016/j.apenergy.2024.124063
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