PurposeIn order to make the construction industry develop in the direction of greening, this paper analyzes whether the application of intelligent technology in prefabricated buildings can achieve carbon emission reduction, starting from the problems of weak technology and insufficient encouragement policies in the prefabricated building industry. It also designs dynamic and adjustable incentives for the smart transformation of prefabricated buildings and makes recommendations to facilitate the transformation of assembly manufacturers into “smart factories”.Design/methodology/approachThis paper takes the intelligent technology for carbon reduction, energy efficiency and policy design in the prefabricated buildings industry as the starting point. Based on in-depth expert interviews and questionnaire survey data, a linear multiple regression model is used to establish an association network of intelligent technology in the production and transportation, construction, operation and maintenance, demolition and scrapping stages. On this basis, an evolutionary game theory is used to construct a smart transformation and carbon reduction utility game model between the government and manufacturers, and relevant suggestions for smart empowerment of green construction development technology combinations and policy settings are proposed.FindingsAn assembly manufacturing plant with smart empowerment is an important way to achieve green and sustainable development in the construction industry. Among them, BIM and IoT have made a greater impact on carbon emission reduction of prefabricated buildings in all stages of the whole life cycle. The government’s proposed energy efficiency incentives and environmental tax amount will effectively increase companies' motivation for smart transformation of prefabricated buildings. However, when the environmental tax amount is low, the government should strengthen the regulation of the industry in order to increase the speed of smart transformation of assembly manufacturers. Therefore, a reasonable setting of the environmental tax rate and energy-saving incentives and flexible adjustment of the regulatory efforts can maximize the functional utility of the government in the process of smart transformation.Research limitations/implicationsThis paper focuses on the impact of intelligent technologies on the overall carbon emissions of the industry and provides an evolutionary analysis of the strategic game between the government and assembly manufacturers, the main players in the smart transformation process of prefabricated buildings. However, smart technologies for different categories of assembly manufacturing plants and strategic options for a wider range of stakeholders have not been examined in depth.Originality/valueDifferent from existing research, this study focuses on exploring the strategic game between the government and assembly manufacturers in the smart transformation of prefabricated buildings. It provides an innovative explanation of the connection between intelligent technology and carbon emissions. The study develops an evolutionary game model for both parties, addressing the research gap on the combined effects of policy incentives and intelligent technology on carbon reduction and efficiency improvement in the prefabricated buildings industry. This research not only offers practical reference for the government in designing incentive mechanisms and establishing regulatory systems but also provides feasible practical guidance for the smart transformation and carbon reduction efforts of assembly manufacturing plants.