Optimal configuration of electric vehicle battery recycling system under across-network cooperation

Abstract

As many electric vehicle (EV) batteries are quickly approaching their end-of-life, it has become urgent for firms to establish EV battery recycling networks. Although prior studies have extensively discussed EV battery network designs, they have rarely analyzed the configuration of recycling networks from the across-network cooperation perspective. To address the research gap, we investigate the cooperative configuration decision of an EV battery recycling system that includes an incumbent EV manufacturer and an entrant based on two schemes: with or without across-network cooperation. To examine the differences between these two schemes, we develop a stylized configuration model for the incumbent and the entrant with mixed integer nonlinear programming (MINLP) that simultaneously incorporates carbon emission and government penalty. Applying a Lagrange heuristic algorithm to derive an optimal solution, we then perform simulations using realistic profiles. Our findings show that across-network cooperation effectively lowers the recycling network configuration cost for both the incumbent (decreased by 3.57% and 4.22% under the partial and full cooperation) and the entrant (dropped by 7.98% and 10.25% under the partial and full cooperation). Besides, the incumbent setting a proper processing cost coefficient can reduce its total cost, thus attracting the entrant to join in the across-network cooperation. The result also reveals that the entrant inclines to carry out the across-network cooperation in the infant stage rather than in the mature stage. Finally, although the government’s severe punishment has a positive impact on developing both EV manufacturers’ recycling networks, this kind of non-market intervention impairs the likelihood of across-network cooperation between EV manufacturers.