Study on the impact of government policies on power battery recycling under different recycling models

Abstract

Whether the power battery can be recycled efficiently is related to the sustainable development of the electric vehicle industry. It is noteworthy that government intervention plays an essential role in promoting power battery recycling. However, there is no consensus on the impact of government policies to promote power battery recycling on social welfare. This paper constructs a closed-loop supply chain (CLSC) consisting of a single battery manufacturer, vehicle manufacturer, and third-party recycler under seven recycling models. The government intervenes in the CLSC through subsidy, deposit-refund, and reward-penalty policies to increase the recycling rate and supply chain profits. We compare these policies' social welfare including economic benefits, environmental benefits, consumer surplus, and government surplus. Results show that: (1) Subsidy policy has prominent performance in economic profits and consumer surplus. And the remaining capacity-based subsidy policy is better than the fixed subsidy policy. (2) The deposit-refund policy has a good performance in alleviating government financial pressure. (3) The performance of the reward-penalty mechanism depends on the reward-penalty intensity. Under certain reward-penalty intensity, the reward-penalty mechanism can increase the recycling rate significantly. (4) In terms of the influence of recycling models, alliance recycling models have the potential to achieve the highest social welfare.