Production Strategy for Manufacturer under Dual-credit Policy

Abstract. We study manufacturer that produce both new energy vehicle (New Energy Vehicle: NEV) and conventional fuel vehicles. Under the dual-credit policy, we construct an optimal production decision model to study the production strategies for manufacturer, considering that the manufacturers' R&D investment can earn new energy credits, and discuss the impact of the dual-credit policy factors on the production strategy. It is found that, the production decisions for manufacturer are consistent with the guidance of the dual-credit policy. The dual-credit policy has promoted the R&D investment of manufacturer and improved the technical level of NEV. With the increase of the sensitivity coefficient of new energy credits to R&D investment, and the increase of the transaction price of credits, and the increase of the negative credits of traditional fuel vehicles, manufacturers' R&D investment increases. Under the dual-credit policy, the price of NEV decreased and the output increased, while the price of traditional fuel vehicles increased, and the output decreased. The dual-credit policy promotes the development of NEV, while restraining the development of traditional fuel vehicles.