Green credit for NEVs under dual financing constraints: Manufacturer-Targeted vs. consumer-targeted

The transition to new energy vehicles (NEVs) is hindered by dual financing constraints: high R&D costs limit manufacturers' electrification technology investment, while high retail prices exceed consumers’ budget constraints. This paper develops a game-theoretic model involving a financial institution, a manufacturer, and a retailer to analyze how green credit with interest rate discounts alleviates these constraints. Three credit strategies are compared: without green credit (N), manufacturer-targeted green credit (P), and consumer-targeted green credit (C). The results show that green credit is provided only when government incentives are sufficiently high, and it promotes both electrification technology upgrading and market demand. Moreover, under the C strategy, the retailer partially appropriate the benefits of green credit by increasing margins, thereby weakening its effectiveness. Consequently, the P strategy is more likely to be adopted and is more effective in promoting electrification technology innovation. Finally, when the retailer acts as a credit provider, it optimally offers interest-free loans to the manufacturer but does not subsidize consumers. These findings provide insights into the design of targeted green credit policies for promoting NEV diffusion and technological upgrading.