New energy vehicle R&D strategy with supplier capital constraints under China's dual credit policy

Due to the increasingly severe energy crisis and rising environmental pollution, as an environmentally friendly travel tool, the development of new energy vehicles (NEVs) has been vigorously pursued in many countries. The Chinese government put forward “Parallel Management Measures for the Average Fuel Consumption of Passenger Vehicle Enterprises and Credits for New Energy Vehicles” (referred to as the “dual credit policy”) to promote NEVs. Under the dual credit policy, enabling the NEV supply chain to make research and development (R&D) optimization decisions with capital constraints is a vital issue. Based on the dual credit policy, this study proposes an R&D decision model, incorporating suppliers’ capital constraints, to obtain the optimal strategy for addressing such constraints and promoting NEV development. The results of this study indicate that the dual credit policy promotes the development of the NEV industry whereas the capital constraints weaken the incentive effect of the policy. We propose two solutions, taking bank loans and sharing the cost with manufactures, to relieve the financial constraints. Furthermore, we put forward the conditions for choosing the optimal one. With the increase in the loan interest rate, the credit price, and the technology improvement credit coefficients, suppliers should choose the solution of sharing cost with manufactures. Otherwise, loan strategy is more acceptable.