The Decision-Making Analysis on End-of-Life Vehicle Recycling Extending Producer Responsibility Policy in the Context of Remanufacturing

Abstract For ensuring an ideal recycling rate, the extending producer responsibility (Extending Producer Responsibility) has been recognized by more and more governments. And an increasing number of original vehicle manufacturers (Original Vehicle Manufacturers) participated in their End-of-Life vehicles (End-of-Life Vehicles) reusing to fulfil their social responsibility. The Original Vehicle Manufacturers can do well in auto parts remanufacturing due to their knowledge and skills of vehicle manufacturing, and the third-party vehicle recyclers are more capable of recycling the End-of-Life Vehicles due to their skills and facilities of waste recycling. To better improve the End-of-Life Vehicle reusing businesses and improve the efficiency and quality of End-of-Life Vehicle recycling and remanufacturing, this research built a remanufacturing system with dual-cycle End-of-Life Vehicle recycling. Moreover, for the well operation of this system, the researchers established the game model between Original Vehicle Manufacturers and third-party recyclers with the government involved and analyzed this model with evolutionary game theory. This research found that there are two evolutionary stable strategies (ESS) for the two groups. For well operation of remanufacturing system with dual-cycle End-of-Life Vehicle recycling, the government need to use the Extending Producer Responsibility policy to impose strict restrictions on Original Vehicle Manufacturers doing End-of-Life Vehicle recycling through promoting Original Vehicle Manufacturers’ recycling quantity standard and the penalty for insufficient End-of-Life Vehicle recycling. Further, this research also found that the licensing fee that the third-party recycler needs to pay the Original Vehicle Manufacturer for getting the recycling business plays a vital role in the ESS.