IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v130y2024ics0140988324000112.html
   My bibliography  Save this article

Can “dual credit” replace “subsidies” successfully? -based on analysis of vehicle supply chain decisions under the digital transformation of technology

Author

Listed:
  • Yi, Yongxi
  • Zhang, Meng
  • Zhang, Aoxiang
  • Li, Yuqiong

Abstract

Transportation is the second largest source of carbon emissions today, with more than 80% of the carbon emitted from automobile operations. Hence, reducing the fuel consumption per unit mileage while vigorously developing new energy vehicles has become an inevitable choice for carbon emission reduction. So, this paper applies the differential game approach to investigate the production trade-offs of fuel and new energy vehicles, fuel consumption reduction, and digital technology investment strategies in an automotive supply chain under a dynamic framework. In addition, it further analyzes whether the dual credit policy (DCP) can promote the healthy development of China's auto market after the withdrawal of the purchase subsidy policy for new energy vehicles (PSP). The results show that the implementation of DCP will reduce the sales of fuel vehicles with fuel consumption higher than the critical value (HFCV) but will not promote the willingness of manufacturers to invest in fuel consumption reduction of HFCV; the abolition of the PSP will not reduce the demand for fuel vehicles, nor will it affect the investment in fuel consumption reduction of fuel vehicles, but it will reduce the consumer demand for new energy vehicles. However, assuming that the government appropriately adjusts the intrinsic mechanism of the DCP, such as increasing the requirement for the proportion of new energy vehicles in the sales of cars by manufacturers and the value of the points per unit of new energy vehicles, it will be possible to promote the growth of new energy vehicles while discouraging the production of fuel-intensive vehicles. In addition, If the government abolishes PSP, the maximum rate of change in the profits of the manufacturer, retailer, and the entire supply chain in the parameter change intervals analyzed in our numerical example is only 1.6%, 0.04%, and 0.13%, respectively, which can be said to have minimal impact. The findings provide a theoretical basis for the government's choice of carbon regulation policy for the automotive supply chain.

Suggested Citation

  • Yi, Yongxi & Zhang, Meng & Zhang, Aoxiang & Li, Yuqiong, 2024. "Can “dual credit” replace “subsidies” successfully? -based on analysis of vehicle supply chain decisions under the digital transformation of technology," Energy Economics, Elsevier, vol. 130(C).
    • Handle: RePEc:eee:eneeco:v:130:y:2024:i:c:s0140988324000112
    DOI: 10.1016/j.eneco.2024.107303
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988324000112
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2024.107303?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jian Huang & Mingming Leng & Liping Liang & Jian Liu, 2013. "Promoting electric automobiles: supply chain analysis under a government’s subsidy incentive scheme," IISE Transactions, Taylor & Francis Journals, vol. 45(8), pages 826-844.
    2. Liukai Yu & Xuehai Jiang & Yujie He & Yangyang Jiao, 2022. "Promoting the Diffusion of New Energy Vehicles under Dual Credit Policy: Asymmetric Competition and Cooperation in Complex Network," Energies, MDPI, vol. 15(15), pages 1-20, July.
    3. Ma, Miaomiao & Meng, Weidong & Huang, Bo & Li, Yuyu, 2023. "The influence of dual credit policy on new energy vehicle technology innovation under demand forecast information asymmetry," Energy, Elsevier, vol. 271(C).
    4. Plambeck, Erica L., 2012. "Reducing greenhouse gas emissions through operations and supply chain management," Energy Economics, Elsevier, vol. 34(S1), pages 64-74.
    5. Ou, Shiqi & Lin, Zhenhong & Qi, Liang & Li, Jie & He, Xin & Przesmitzki, Steven, 2018. "The dual-credit policy: Quantifying the policy impact on plug-in electric vehicle sales and industry profits in China," Energy Policy, Elsevier, vol. 121(C), pages 597-610.
    6. Fan, Zhi-Ping & Cao, Yue & Huang, Chun-Yong & Li, Yongli, 2020. "Pricing strategies of domestic and imported electric vehicle manufacturers and the design of government subsidy and tariff policies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    7. Shao, Lulu & Yang, Jun & Zhang, Min, 2017. "Subsidy scheme or price discount scheme? Mass adoption of electric vehicles under different market structures," European Journal of Operational Research, Elsevier, vol. 262(3), pages 1181-1195.
    8. Liu, Weihua & Wei, Shuang & Li, Kevin W. & Long, Shangsong, 2022. "Supplier participation in digital transformation of a two-echelon supply chain: Monetary and symbolic incentives," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    9. Liao, Dongsheng & Tan, Binbin, 2023. "An evolutionary game analysis of new energy vehicles promotion considering carbon tax in post-subsidy era," Energy, Elsevier, vol. 264(C).
    10. Ma, Miaomiao & Meng, Weidong & Li, Yuyu & Huang, Bo, 2023. "Impact of dual credit policy on new energy vehicles technology innovation with information asymmetry," Applied Energy, Elsevier, vol. 332(C).
    11. Yang, Zaoli & Li, Qin & Yan, Yamin & Shang, Wen-Long & Ochieng, Washington, 2022. "Examining influence factors of Chinese electric vehicle market demand based on online reviews under moderating effect of subsidy policy," Applied Energy, Elsevier, vol. 326(C).
    12. Yu, Yi & Zhou, Dequn & Zha, Donglan & Wang, Qunwei & Zhu, Qingyuan, 2021. "Optimal production and pricing strategies in auto supply chain when dual credit policy is substituted for subsidy policy," Energy, Elsevier, vol. 226(C).
    13. Cheng, Yongwei & Fan, Tijun, 2021. "Production coopetition strategies for an FV automaker and a competitive NEV automaker under the dual-credit policy," Omega, Elsevier, vol. 103(C).
    14. Ji, Shou-feng & Zhao, Dan & Luo, Rong-juan, 2019. "Evolutionary game analysis on local governments and manufacturers' behavioral strategies: Impact of phasing out subsidies for new energy vehicles," Energy, Elsevier, vol. 189(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liangui Peng & Ying Li & Hui Yu, 2021. "Effects of Dual Credit Policy and Consumer Preferences on Production Decisions in Automobile Supply Chain," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    2. Yu, Hui & Li, Ying & Wang, Wei, 2023. "Optimal innovation strategies of automakers with market competition under the dual-credit policy," Energy, Elsevier, vol. 283(C).
    3. Ying Xie & Jie Wu & Hannian Zhi & Muhammad Riaz & Liangpeng Wu, 2023. "A Study on the Evolution of Competition in China’s Auto Market Considering Market Capacity Constraints and a Game Payoff Matrix: Based on the Dual Credit Policy," Sustainability, MDPI, vol. 15(4), pages 1-24, February.
    4. Yushi Wang & Licheng Sun & Shilong Li, 2022. "Production Decisions of Automakers Considering the Impact of Anticipated Regret under the Dual-Credit Policy," Sustainability, MDPI, vol. 14(11), pages 1-18, May.
    5. Ma, Miaomiao & Meng, Weidong & Li, Yuyu & Huang, Bo, 2023. "Impact of dual credit policy on new energy vehicles technology innovation with information asymmetry," Applied Energy, Elsevier, vol. 332(C).
    6. Cheng, Fei & Chen, Tong & Chen, Qiao, 2022. "Cost-reducing strategy or emission-reducing strategy? The choice of low-carbon decisions under price threshold subsidy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    7. Li, Xin & Wu, Ming & Shi, Chunming & Chen, Yan, 2023. "Impacts of green credit policies and information asymmetry: From market perspective," Resources Policy, Elsevier, vol. 81(C).
    8. Nie, Qingyun & Zhang, Lihui & Li, Songrui, 2022. "How can personal carbon trading be applied in electric vehicle subsidies? A Stackelberg game method in private vehicles," Applied Energy, Elsevier, vol. 313(C).
    9. Li, Yina & Liang, Chenchen & Ye, Fei & Zhao, Xiande, 2023. "Designing government subsidy schemes to promote the electric vehicle industry: A system dynamics model perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 167(C).
    10. Lian Ding & Xiaodong Zhu, 2023. "The Impact of the Dual-Credit Policy on Production and Cooperative R&D in the Automotive Supply Chain," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    11. Zhao, Dan & Wang, Jian & Li, Ye-kai & Tang, Jin-huan & Zhang, Shui-wang, 2024. "How to promote the transition of fuel vehicle enterprises under dual credit policy? An improved tripartite evolutionary game analysis with time delay," Energy, Elsevier, vol. 293(C).
    12. Li, Kunpeng & Wang, Lan, 2023. "Optimal electric vehicle subsidy and pricing decisions with consideration of EV anxiety and EV preference in green and non-green consumers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    13. Gao, Yongling & Leng, Mingming & Zhang, Yaping & Liang, Liping, 2022. "Incentivizing the adoption of electric vehicles in city logistics: Pricing, driving range, and usage decisions under time window policies," International Journal of Production Economics, Elsevier, vol. 245(C).
    14. Liu, Changyu & Song, Yadong & Wang, Wei & Shi, Xunpeng, 2023. "The governance of manufacturers’ greenwashing behaviors: A tripartite evolutionary game analysis of electric vehicles," Applied Energy, Elsevier, vol. 333(C).
    15. Yangyang Wang & Yongxi Yi & Chunyan Fu & Yuqiong Li, 2023. "Price competition and joint energy‐consumption reduction technology investment of new energy and fuel vehicles under the double‐points policy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2278-2291, June.
    16. Tang, Yanyan & Zhang, Qi & Li, Yaoming & Li, Hailong & Pan, Xunzhang & Mclellan, Benjamin, 2019. "The social-economic-environmental impacts of recycling retired EV batteries under reward-penalty mechanism," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    17. Wenhui Zhao & Yimeng Liu & Jiansheng Hou & Lifang Liu, 2023. "Impact of Carbon Trading Mechanism Considering Blockchain Technology on the Evolution of New Energy Vehicle Industry in the Post-Subsidy Era," Sustainability, MDPI, vol. 15(17), pages 1-18, September.
    18. Fan, Zhi-Ping & Cao, Yue & Huang, Chun-Yong & Li, Yongli, 2020. "Pricing strategies of domestic and imported electric vehicle manufacturers and the design of government subsidy and tariff policies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    19. Qingyou Yan & Meijuan Zhang & Wei Li & Guangyu Qin, 2020. "Risk Assessment of New Energy Vehicle Supply Chain Based on Variable Weight Theory and Cloud Model: A Case Study in China," Sustainability, MDPI, vol. 12(8), pages 1-21, April.
    20. Ma, Miaomiao & Meng, Weidong & Huang, Bo & Li, Yuyu, 2023. "The influence of dual credit policy on new energy vehicle technology innovation under demand forecast information asymmetry," Energy, Elsevier, vol. 271(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:130:y:2024:i:c:s0140988324000112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.