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Strategic decisions in competitive EV supply chains under the dual credit policy: The role of power structures and alliances

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  • Li, Qiuting
  • Li, Si
  • Li, Ying

Abstract

The dual credit policy (DCP) has become a key instrument in promoting the development of the electric vehicle (EV) industry. Within EV supply chains, power batteries, being the most critical and cost-intensive component, play a decisive role in shaping the industry’s competitive dynamics. This study examines how variations in power structure influence the effectiveness of the DCP and the strategic behavior of supply chain participants. Specifically, it analyzes an EV supply chain comprising a power battery supplier and two manufacturers under both decentralized and alliance-based decision-making frameworks. Furthermore, the study explores how power dynamics affects the decision-making behavior of supply chain members and evaluates the policy’s effectiveness. The main findings are as follows: (1) An increase in the new energy vehicle credit coefficient and credit trading price enhances the revenues of all EV supply chain participants, with stronger effects observed for those in dominant positions. (2) Forming an alliance consistently promotes the improvement of battery technology, regardless of the underlying power structure. However, the lowest level of technological advancement occurs when either the supplier or its alliance takes the leadership role. (3) Although alliances contribute to expanding overall market demand, they do not necessarily enhance the benefits of all participants. Only when the alliance assumes a leading position do its benefits exceed those achieved under decentralized decision-making. These findings provide valuable implications for policymakers and industry stakeholders seeking to optimize cooperative and competitive strategies and to leverage the DCP more effectively in fostering sustainable growth within the EV sector.

Suggested Citation

  • Li, Qiuting & Li, Si & Li, Ying, 2026. "Strategic decisions in competitive EV supply chains under the dual credit policy: The role of power structures and alliances," Transport Policy, Elsevier, vol. 177(C).
    • Handle: RePEc:eee:trapol:v:177:y:2026:i:c:s0967070x2500486x
    DOI: 10.1016/j.tranpol.2025.103943
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