Decision-making analysis of electric vehicle battery recycling under different recycling models and deposit-refund scheme

Abstract

Recycling electric vehicle (EV) batteries has gained great attention in China. However, the firm's initiative will be weakened due to high costs. A deposit-refund scheme has been pilot-implemented in Shenzhen city. This paper tries to explore the role of the deposit-refund scheme in end-of-life EV battery recycling by using the Stackelberg game theory. Specifically, this study builds single-channel recycling models, mixed recycling models, and alliance recycling models to investigate the impact of the deposit-refund scheme on decision variables, supply chain profit, and recycling rate. Results show that: (1) Supply chain decision variables are all affected by the deposit-refund scheme. Supply chain profit decreased and the recycling rate increased under the deposit-refund scheme. Compared with subsidy and environmental tax, a deposit-refund scheme can significantly improve the EV battery recycling rate. (2) From the perspective of the recycling model, Model MV has the highest supply chain profit, and Model M performs best in recycling rate. (3) When the consumer retail price sensitivity coefficient rises, supply chain profit declines, and the recycling rate increases. Under higher recycling difficulty and channel competition coefficient, supply chain profit and recycling rate will all decrease.