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Pricing Strategy for Sustainable Recycling of Power Batteries Considering Recycling Competition Under the Reward–Penalty Mechanism

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  • Hairui Wei

    (Business School, University of Shanghai for Science & Technology, Shanghai 200093, China)

  • Ziming Qi

    (Business School, University of Shanghai for Science & Technology, Shanghai 200093, China)

Abstract

With the large-scale power batteries approaching their retirement phase, efforts are being made to advance the recycling and cascade utilization of power batteries for electric vehicles (EVs). This paper constructs a closed-loop supply chain (CLSC) of power batteries led by the battery manufacturer (BM) and composed of the electric vehicle manufacturer (EVM) and third-party recycler (TPR). The study investigates the optimal pricing strategies of this CLSC with the consideration of recycling competition under the government’s reward–penalty mechanism. This paper establishes five recycling modes, namely independent recycling and cooperative recycling, under dual-channel recycling, and further discusses the effects of the government reward–penalty mechanism and recycling competition on the recycling rate, profits, and recycling pricing of the CLSC in each recycling mode. The following conclusions are found: (1) An increase in the reward–penalty intensity will increase the recycling rate, sales price of EVs, wholesale price, transfer price, recycling price, and the profit of each recycler in the CLSC. (2) An increase in the recycling competition will result in the reduction of the profit of each enterprise, and will also lead to the reduction of the recycling rate. (3) Cooperation between enterprises can inhibit the recycling volume of other enterprises to a certain extent. The cooperation between the EVM and BM can increase the recycling volume and the sales volume of EVs. (4) The leadership of the BM in the supply chain is embodied in the recycling and profit. For other members of the supply chain, it is very important to strive for cooperation with the leaders in the supply chain. These research conclusions can provide theoretical support for optimizing the power battery recycling system, formulating relevant policies, and improving the efficiency of resource recycling, thereby promoting the sustainable development of the new energy industry.

Suggested Citation

  • Hairui Wei & Ziming Qi, 2025. "Pricing Strategy for Sustainable Recycling of Power Batteries Considering Recycling Competition Under the Reward–Penalty Mechanism," Sustainability, MDPI, vol. 17(16), pages 1-33, August.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:16:p:7224-:d:1721373
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    References listed on IDEAS

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