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How Does the Government Policy Mix Influence the Used Battery Recycling in a New Energy Vehicle Closed-Loop Supply Chain?

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Listed:
  • Yan Chen

    (School of Management Engineering, Qingdao University of Technology, Qingdao 266520, China)

  • Jing Lyu

    (School of Management Engineering, Qingdao University of Technology, Qingdao 266520, China)

  • Long Li

    (School of Management Engineering, Qingdao University of Technology, Qingdao 266520, China)

Abstract

The sales of New Energy Vehicles (NEVs) have experienced substantial growth, resulting in a significant increase in the number of used NEV batteries. Improper disposal of these used batteries can lead to pollution and resource wastage. In line with the Extended Producer Responsibility (EPR) principles, this research designs a three-level hybrid recycling closed-loop supply chain (CLSC) consisting of a manufacturer, retailer, and third-party recycler. Furthermore, Stackelberg game theory is applied to develop distinct game models for analyzing the interactions among the supply chain participants. To research the interaction among multiple policies on the hybrid recycling system, it explores the optimal pricing and the CLSC’s recycling performance under the policy mix. In addition, a coordination mechanism is devised and validated to solve the decline in members’ individual profits caused by the policy mix. The findings indicate that battery tax policy may reduce total profits, and subsidy policies could result in enterprise dependency, but the policy mix can lead to increase in both recycling price and amount. This research demonstrates the policy mix can overcome the limitations of single policy, implement a long-term and dynamically adjustable incentive mechanism and provide a crucial reference for the government’s role as the “visible hand” in recycling.

Suggested Citation

  • Yan Chen & Jing Lyu & Long Li, 2025. "How Does the Government Policy Mix Influence the Used Battery Recycling in a New Energy Vehicle Closed-Loop Supply Chain?," Sustainability, MDPI, vol. 17(8), pages 1-22, April.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:8:p:3324-:d:1630663
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    References listed on IDEAS

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    1. Xichen Lyu & Yingying Xu & Dian Sun, 2021. "An Evolutionary Game Research on Cooperation Mode of the NEV Power Battery Recycling and Gradient Utilization Alliance in the Context of China’s NEV Power Battery Retired Tide," Sustainability, MDPI, vol. 13(8), pages 1-27, April.
    2. Zhang, Qi & Tang, Yanyan & Bunn, Derek & Li, Hailong & Li, Yaoming, 2021. "Comparative evaluation and policy analysis for recycling retired EV batteries with different collection modes," Applied Energy, Elsevier, vol. 303(C).
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    5. Zhu, Mengping & Liu, Zhixue & Li, Jianbin & Zhu, Stuart X., 2020. "Electric vehicle battery capacity allocation and recycling with downstream competition," European Journal of Operational Research, Elsevier, vol. 283(1), pages 365-379.
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