Optimal policy for the recycling of electric vehicle retired power batteries

Abstract

How to design subsidy policies to promote the recycling of retired power batteries (RPBs) of electric vehicles (EVs) is the focus of the sustainable development of EVs. In this paper, we consider a supply chain with one EV manufacturer and one power battery manufacturer, and construct game models to compare three policies that have emerged in industry practice, namely, no policy subsidy, subsidy for endurance level and one time quota subsidy, respectively. We show that subsidies are more beneficial than no subsidy and the two subsidy policies are suitable for different situations. Without considering the subsidy budget, one time subsidy is better. Specifically, under different corresponding thresholds, the wholesale price of batteries, the endurance level, the quantity of EVs, the profits of battery manufacturers, the profits of EV manufacturers, consumer surplus and social welfare are higher, and the retail price of EVs is lower. In addition, with subsidy budget constraints, the subsidy for endurance level is better, specifically, the wholesale price of batteries, the endurance level, EV production quantity, EV manufacturer’s profit and consumer surplus are higher; under different corresponding thresholds, the retail price of EVs is lower, the profits of battery manufacturers and social welfare are higher.