Battery Mode Selection and Carbon Emission Decisions of Competitive Electric Vehicle Manufacturers

Abstract

Competition in China’s electric vehicle industry has intensified significantly in recent years. The production mode of power batteries, serving as the pivotal component in these vehicles, has emerged as a critical challenge for electric vehicle manufacturers. We considered a system comprising an electric vehicle (EV) manufacturer with power battery production technology and another EV manufacturer lacking power battery production technology. In the context of carbon trading policy, we constructed and solved Cournot competitive game models and asymmetric Nash negotiation game models in the CC, PC, and WC modes. We examined the decision-making process of electric vehicle manufacturers regarding power battery production modes and carbon emission reduction strategies. Our research indicates the following: (1) The reasonable patent fee for power batteries and the wholesale price of power batteries can not only compensate power battery production technology manufacturers for the losses caused by market competition but can also strengthen the cooperative relationship between manufacturers. (2) EV manufacturers equipped with power battery production technology exhibit higher profitability within the framework of a perfectly competitive power battery production mode. Conversely, manufacturers lacking power cell production technology demonstrate greater profitability when operating under a more collaborative power cell production mode. (3) Refraining from blindly persisting with and advocating for carbon emission reduction measures is advisable for manufacturers amidst rising carbon trading prices.