Driving technological innovation in China’s new energy vehicle manufacturing enterprises: the impact of the recommended catalog policy

The development of new energy vehicles (NEVs) is one of the effective ways to alleviate carbon emissions, environmental pollution, and energy scarcity in the transportation sector. The Chinese government has innovatively proposed the "dual credit policy," but it is still a hot topic whether it can promote the NEVs' technological innovation. In this study, we construct game models and obtain the technological innovation strategies for NEVs under the dual credit policy, considering that the NEV supply chain contains one manufacturer and N suppliers. Further, we construct bargaining game models and study how to encourage manufacturers and suppliers to enhance technological innovation, realize supply chain coordination, and give the alliance strategy to maximize suppliers' profit. We found that the dual credit policy can effectively stimulate technological innovation, and the higher the credit price or technological innovation credit factor, the higher the technical level of NEVs. The findings could guide the government to adjust and revise the policy. Second, we found that the bargaining games could coordinate the NEV supply chain so that decentralized enterprises can achieve optimal technological innovation under centralized decision-making. Third, we found that suppliers can improve their profits by choosing a suitable alliance strategy under the manufacturer's different negotiating power.

Greenness-based subsidy and dual credit policy to promote new energy vehicles considering consumers’ low-carbon awareness

The corporate average fuel consumption (CAFC) and new energy vehicle (NEV) credit policy (2021–2023) was officially released in June 2020. As a mandatory regulation for automobile manufacturers to produce new energy vehicles, its impact on the output of new energy vehicles needs to be systematically evaluated. In this study, we build an enterprise policy compliance model to simulate the dual-credit policy requirements for the production of new energy vehicles from 2021 to 2023 under different scenarios. The results show that the production of new energy vehicles from 2021 to 2023 is required to reach 1.78 to 3.97 million under different scenarios. Three factors, i.e., switching from New Europe Driving Cycle (NEDC) to World Light Vehicle Test Procedure (WLTP) fuel consumption improvement of conventional vehicles, and credit per new energy vehicle, have a more significant impact on the new energy vehicle production than others. Under the minimum guarantee scenario, a 10% change in the above three factors will lead to a 2.5%, 1.5%, and 0.5% reduction in the production requirement for new energy vehicles.

Optimizing production of new energy vehicles with across-chain cooperation under China’s dual credit policy

The influence of dual credit policy on new energy vehicle technology innovation under demand forecast information asymmetry

Environmental sustainability is an important issue in supply chain management (SCM). New energy vehicles (NEVs) have significant environmental value when compared to traditional fuel vehicles (FVs). Currently, there is intense competition between fuel and new energy vehicles, owing to differentiated pricing strategies. This paper focuses on behavior-based pricing (BBP) strategies between energy vehicles and fuel vehicles in a two-echelon supply chain wherein consumers are environmentally conscious. A two-period game-theoretic model is built to examine the effect of consumers’ environmental concerns on competition between fuel and energy vehicles, behavior-based pricing strategies, supply chain efficiency, and social welfare. The analytical results indicate that consumers’ environmental concerns facilitate the market share competition by new energy vehicle firms in the second period. If consumers care more about the environment, supply chain efficiency is improved in cases of retail as well as wholesale-and-retail behavior-based pricing strategies. Wholesale-and-retail behavior-based pricing strategies benefit all members of the supply chain, but this is not the case for retail behavior-based pricing strategies. If consumers are sufficiently concerned about the environment and new energy vehicle firms are more efficient, a win–win–win scenario for firms, consumers, and social welfare occurs in the two behavior-based pricing strategies. Counterintuitively, green innovation improves new energy vehicle, fuel vehicle as well as overall supply chain efficiency, in three cases.

In the context of global carbon peak and carbon neutrality goals, researching the driving forces and influencing factors behind the growth in sales of new energy vehicles (NEVs) is particularly urgent and crucial. Although the academic community has extensively explored various factors affecting NEV sales, technological innovation, as the core engine driving industry progress, is yet to receive sufficient and in-depth exploration regarding its potential profound impact on sales. Therefore, this study thoroughly analyzes the mechanism by which technological innovation influences sales, supplementing the existing literature, exploring sustainable industry development, and guiding the optimization of business strategies and precise government policies. This research employs the quality of NEV technology patents as a proxy variable for technological innovation, and conducts an empirical analysis using China’s NEV sales data from 2015 to 2022. The results of the study show the following: (1) the quality of technological innovation significantly contributes to the growth of new energy vehicle sales. This conclusion still holds when the administrative protection of intellectual property rights and the government’s public innovation environment indicators are used as instrumental variables of technological innovation quality. (2) Technological innovations in different links of the new energy vehicle industry chain have a positive impact on sales, especially those in the midstream battery, motor, and downstream charging services. This shows that in the critical period of new energy vehicle development, not only is the breakthrough of key technologies crucial, but also, non-critical technologies can promote sales growth by improving user experience and product performance. (3) Compared with plug-in hybrid electric vehicles (PHEVs), the overall technological innovation of new energy vehicles (NEVs) has a more significant effect on the sales of battery electric vehicles (BEVs). (4) In addition, the study finds that there is no significant difference between high-quality and low-quality technological innovations on the promotion of new energy vehicle sales, which indicates that the market values the overall effect of technological innovations more than the mere level of quality. The study of the impact of technological innovation on sales in different branches of the new energy industry chain can help to clarify the direction of technological innovation, optimize resource allocation, promote the synergistic development of the industry chain, enhance market competitiveness, and provide a scientific basis for policy formulation.

Conventional automotive supply chains under China's dual-credit policy: fuel economy, production and coordination

Purpose This paper aims to compare and analyze the effect of the dual-credit policy and product substitution rate on the automakers’ operational strategies under different production modes (e.g. centralized and independent), and further illustrate which production mode is more conducive to improving new energy vehicle (NEV) development.Design/methodology/approach The decision-making models for a centralized production mode where an integrated automaker produces both NEVs and fuel vehicles (FVs) and for independent production mode where an NEV automaker faces competition from a traditional FV automaker were formulated. The equilibrium solutions of each production mode were obtained by extreme value and game theory methods. The conclusions of the theoretical analysis were further verified with numerical analyses using IBM-MATLAB R2019a. Some management insights could be obtained by comparison analysis.Findings Under the dual-credit policy, an increase in the NEV credit trading price will always raise production quantity of NEVs, but only in an independent production mode where a higher trading price will also bring higher total profits to NEV automakers. In addition, only when the NEV credit trading price is high enough, a rising product substitution rate will be more favorable to NEV production and restrain FV production. Furthermore, an independent production mode is more favorable for the initial production of NEVs, but as each of the two vehicle types captures a certain amount of market share, a centralized production mode will be more conducive to the full replacement of FVs by NEVs.Originality/value The main contributions of this study include the formulation of decision-making models for FVs and NEVs in not only a centralized production mode but also an independent production mode. Moreover, this paper comprehensively analyzes how the dual-credit policy and product substitution relationship affect automakers’ production and pricing decisions. Then, the specific conditions under which each production mode is more conducive to NEV production and sales are summarized. The results proposed in this study provide scientific managerial insights for automakers and policy makers.

Optimal channel strategy for obtaining new energy vehicle credits under dual credit policy: Purchase, self-produce, or both?

Dual credit policy (DCP) is a market-based mechanism introduced by the Chinese government to promote the new energy vehicle (NEV) industry and improve energy savings in China. To offer sufficient impetus for the NEV industry while providing sufficient transitional buffer time for automobile manufacturers (AMs), the government needs to scientifically design how to gradually increase its dual credit requirement for AMs year by year. To assist the multi-year DCP design, this paper proposes a generalized Nash equilibrium model to predict AMs’ short-term decisions (i.e., vehicle production and credit trading) and long-term decisions (i.e., investment in production capacity expansion and research and development) under any DCP, considering the interactions among AMs’ decisions, vehicle prices, and credit price. Based on the equilibrium model, we then develop a bi-level programming problem to optimize the multi-year DCP. With numerical experiments, we show that implementing the optimal DCP can effectively enhance the market share of NEVs. In the context of the optimal multi-year DCP, the credit requirements set by the government should maintain a relatively low threshold during the initial years, but rise rapidly after that. Such optimal DCP offers AMs sufficient transition time while compelling a quick shift in their developmental strategies.

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

<p style='text-indent:20px;'>This article constructs a two-stage supply chain consisting of a manufacturer (producing both fuel vehicles (FV) and new energy vehicles) and a retailer (selling both fuel vehicles and new energy vehicles) based on dual credit policy, considers three different power structure models, including the vertical Nash game model, the manufacturer Stackelberg game model, the retailer Stackelberg game model, and explores the operational strategy issues of new energy vehicle (NEV) enterprises under the dual credit policy. By comparing the optimal equilibrium solutions under different channel power structures, our findings indicate that (1) When the demand function is linear, the vertical Nash game model can achieve the highest system profit of the automotive supply chain, and in the manufacturer Stackelberg game model, the profit of the automaker is higher than that of the retailer, while in the retailer Stackelberg game model, the profit of the automaker is lower than that of the retailer. (2) The demand and pricing for FV and NEV in different models are determined by the range of FV and NEV production costs, credit trading prices, and the proportion of NEV credits. (3) Both the increase in the credit trading prices and the proportion of NEV credits will promote increased profits for the manufacturer and retailer. (4) The increase of the price sensitivity coefficient will reduce the demand as well as the profit of auto supply chain members.</p>

Does the dual-credit policy promote the technological development of new energy vehicles? An industry chain reconstruction perspective

New energy vehicles have a significant advantage in energy saving and environmental pollution reduction in the transportation industry; however, they are still at a disadvantage in the market competition. The Chinese government has introduced lots of policy measures to promote the mass adoption of new energy vehicles (NEVs), specifically the dual credit policy. Moreover, consumer’s preferences are vital factors in their purchase decision making. This study focuses on the production decisions of automobile manufacturers under the decentralized and centralized supply chain, considering the factors of both consumer preferences and dual credit policy. First, under the centralized decision mode, higher demand drives the manufacturer to expand production; however, retailers’ profits are harmed. With the increase in consumers’ environmental preference and cognition of endurance ability, market pricing and demand increase under the decentralized decision mode. The cross effects of preferences bring more profits for manufacturers and retailers. Second, the difference in prices and profits widens, under the two decision modes, as increases in consumer preferences’ value. When consumers have higher environmental preferences, manufacturers and retailers should increase the new energy vehicle pricing. Otherwise, they should decrease pricing to increase the market penetration ratio. In addition, the impacts of one preference on the profit difference are related to the other preference.