Developing Pricing Strategy in a Closed-Loop Supply Chain for Electric Vehicle Batteries With a Government Reward and Punishment Mechanism

Abstract

Electric vehicles are expected to become a major means of transportation in the future, but entail the challenge of collecting used electric vehicle batteries. This article examines pricing strategies in a closed-loop dual-channel supply chain for electric vehicle batteries both with and without a governmental reward and punishment mechanism. The discussion considers the optimal pricing strategy considering the competition between dual collecting channels, both with the government's reward and punishment mechanism and without it. The degree of influence of government mechanisms, echelon utilization, and EV battery collection on a) collection price, b) collection capacity, and c) the profit obtained by participants are also examined. The discussion shows that collection capacity, collection price, and recycler profits in the closed-loop EV battery supply chain could be improved with a government reward and punishment mechanism. Finally, the robustness of the proposed model was verified through numerical examples.