Governance strategies for end-of-life electric vehicle battery recycling in China: A tripartite evolutionary game analysis

Abstract

End-of-life (EOL) electric vehicle (EV) batteries have both economic and environmental benefits if recycled in an environmentally friendly manner while they may cause environmental pollution if treated improperly. China is currently working hard to promote the development of a circular economy by EOL EV battery recycling. However, conflicts of interest among electric vehicle manufacturers (EVMs), consumers, and the government often hinder efficient recycling. This study constructs a tripartite evolutionary game model under the condition of bounded rationality, analyzes the evolutionary stability strategy of three participants, and combines with numerical simulation to explore the feasible governance strategies of EOL EV battery recycling. The results show that four evolutionary stable strategies (ESSs) correspond to the three stages of the EOL EV battery recycling industry: early stage, development stage, and maturity stage. In the early stage, the punishment strategy is more critical to motivate EVMs and consumers to actively participate in battery recycling. The subsidy mechanisms can influence the strategic choices of the three participants, but the excessive subsidy is not conducive to the sustainable development of the EOL EV battery industry. In addition, when the industry matures, the government will gradually decrease intervention, thereby realizing the development path of EOL EV battery recycling from exogenous government supervision to endogenous profit drive.