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Electric vehicle battery secondary use under government subsidy: A closed-loop supply chain perspective

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  • Gu, Xiaoyu
  • Zhou, Li
  • Huang, Hongfu
  • Shi, Xiutian
  • Ieromonachou, Petros

Abstract

Electric vehicle batteries should normally be removed from electric vehicles when their power capacity fall to 70% ~ 80% of new batteries. However, removed batteries can still be secondary used for other purposes, such as energy storage, before remanufacturing. To promote electric vehicle battery secondary use, this research studies a two-period battery secondary use closed-loop supply chain model consisting of a battery (re)manufacturer, a secondary user and a government. The government may provide subsidies for the secondary users to incentivize electric vehicle battery secondary use. It is found that, only when the recycled batteries' remaining power capacity is relatively high or their remanufacturing rate is relatively low, the government will consider a subsidy. In addition, under government's subsidy regulation, secondary battery users need to determine the quantities of batteries with relatively high power capacity for secondary use. Theoretically, this study enriches the research field of sustainable development of electric vehicle battery industry. Practically, this study also helps practitioners to better manage closed-loop supply chains with battery secondary use, and to enhance supply chain efficiency. Also, this study contributes to governments' regulatory decisions toward electric vehicle industries to balance economy and sustainability in society.

Suggested Citation

  • Gu, Xiaoyu & Zhou, Li & Huang, Hongfu & Shi, Xiutian & Ieromonachou, Petros, 2021. "Electric vehicle battery secondary use under government subsidy: A closed-loop supply chain perspective," International Journal of Production Economics, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:proeco:v:234:y:2021:i:c:s0925527321000116
    DOI: 10.1016/j.ijpe.2021.108035
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    3. Chen, Jiumei & Zhang, Wen & Gong, Bengang & Zhang, Xiaoqi & Li, Hongping, 2022. "Optimal policy for the recycling of electric vehicle retired power batteries," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    4. Huang, Jianbai & Dong, Xuesong & Chen, Jinyu & Zeng, Anqi, 2023. "The slow-release effect of recycling on rapid demand growth of critical metals from EV batteries up to 2050: Evidence from China," Resources Policy, Elsevier, vol. 82(C).
    5. Jesús F. Lampón, 2023. "Efficiency in design and production to achieve sustainable development challenges in the automobile industry: Modular electric vehicle platforms," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 26-38, February.
    6. Xuan Zhao & Benhong Peng & Chaoyu Zheng & Anxia Wan, 2022. "Closed-loop supply chain pricing strategy for electric vehicle batteries recycling in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(6), pages 7725-7752, June.
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    9. Chu, Yi & Yu, Hui & Li, Ying, 2024. "How do supply- and demand-side dynamics and subsidies affect the prospects for electric vehicle battery swapping services? Evidence from an evolutionary analysis," Energy, Elsevier, vol. 308(C).
    10. Gao, Jinwu & Jiang, Shuman & Zhang, Yi, 2024. "To adopt blockchain or not? A game theoretic analysis of profit and environmental impact in decommissioned EV lithium-ion battery recycling," Applied Energy, Elsevier, vol. 367(C).
    11. Li, Jizi & Liu, Fangbing & Zhang, Justin Z. & Tong, Zeping, 2023. "Optimal configuration of electric vehicle battery recycling system under across-network cooperation," Applied Energy, Elsevier, vol. 338(C).
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    13. Wang, Yuyan & Zhang, Xiaozhen & Cheng, T.C.E. & Wu, Tsung-Hsien, 2023. "Choice of the co-opetition model for a new energy vehicle supply chain under government subsidies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    14. Zhang, Huiming & Zhu, Kexin & Hang, Zixuan & Zhou, Dequn & Zhou, Yi & Xu, Zhidong, 2022. "Waste battery-to-reutilization decisions under government subsidies: An evolutionary game approach," Energy, Elsevier, vol. 259(C).
    15. Zhang, Yudi & Wang, Xiaojun & Zhi, Bangdong, 2024. "Strategic investment in electric vehicle charging service: Fast charging or battery swapping," International Journal of Production Economics, Elsevier, vol. 268(C).
    16. Kailing Liu & Quanxi Li & Jinda Liu & Yi Li, 2024. "Trade-In and Trade-Old-for-Remanufactured in Closed-Loop Supply Chain Under Different Power Structures and Government Subsidy," SAGE Open, , vol. 14(2), pages 21582440241, May.
    17. Tsao, Yu-Chung & Ai, Ho Thi Thu, 2024. "Remanufacturing electric vehicle battery supply chain under government subsidies and carbon trading: Optimal pricing and return policy," Applied Energy, Elsevier, vol. 375(C).
    18. Cong Wang & Zhongxiu Peng & Xijun Xu, 2021. "A Bi-Level Programming Approach to the Location-Routing Problem with Cargo Splitting under Low-Carbon Policies," Mathematics, MDPI, vol. 9(18), pages 1-34, September.
    19. Fangfang Zhang & Hao Wang & Xiaoyu Wu, 2021. "The Impact of Government Subsidies on Single-Channel Recycling Based on Recycling Propaganda," Energies, MDPI, vol. 14(23), pages 1-14, December.
    20. Chao Li & Kai Fu Yuan, 2025. "The Impact of Subsidies on Pricing Decisions in the Battery Swapping Supply Chain Under the “Vehicle and Battery Separation” Model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(3), pages 1816-1834, April.
    21. Luo, Li & Shan, Renbang & Xiang, Jie, 2024. "The government intervention effectiveness in promoting remanufacturing: Subsidy or remanufacturing target?," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    22. Liangui Peng & Ying Li & Hui Yu, 2021. "Effects of Dual Credit Policy and Consumer Preferences on Production Decisions in Automobile Supply Chain," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    23. Kai Liu & Chuanxu Wang, 2024. "Production and recycling of new energy vehicle power batteries under channel encroachment and government subsidy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(1), pages 1313-1339, January.
    24. Fang, Lei & Li, Yanlin & Govindan, Kannan, 2024. "Entry mode selection for a new entrant of the electric vehicle automaker," European Journal of Operational Research, Elsevier, vol. 313(1), pages 270-280.
    25. Tushar Gahlaut & Gourav Dwivedi, 2024. "Policy recommendations to enhance circular economy of LIBs in an emerging economy," Environment Systems and Decisions, Springer, vol. 44(2), pages 398-411, June.

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