Optimal pricing, subsidies, and cost-sharing rate in fuel cell bus supply chain: A Nash and Stackelberg framework analysis

The dependence of public transportation on fossil fuels significantly contributes to carbon emissions. Fuel cell buses (FCBs), as a zero-emission alternative, provide twice the energy density of traditional fossil fuels, positioning them as a promising substitute for conventional buses (CBs). This study develops a competitive supply chain model, incorporating an FCB manufacturer, a CB manufacturer, a municipality as the customer, and a government responsible for allocating subsidies and purchase cost-sharing rates by applying Nash and Stackelberg approaches. Nine scenarios are analyzed, ranging from no government interventions to various configurations of subsidies and purchase cost-sharing contracts. The results show that scenarios without government intervention are not viable for FCB adoption. Purchase cost-sharing contracts outperform subsidies, with the best scenario being SS, where the CB manufacturer leads in the Stackelberg framework. Scenarios SF and SFI maximize social welfare and municipality utility, respectively. Increasing municipality preference for FCBs and reducing production costs of FCBs significantly boost their adoption. These findings provide actionable insights for supply chain stakeholders and policymakers, advancing the transition toward sustainable public transportation.