Optimal Decisions of Electric Vehicle Closed-Loop Supply Chain under Government Subsidy and Varied Consumers’ Green Awareness

Abstract

The emerging operating mode of new automobile forces in the context of China brings up new problems for the development of the EV CLSC, which are the market position shift inside the loop and government policy and consumer awareness of changes outside it. Aiming at promoting the development of the EV CLSC, this study integrates the influence of internal and external factors, analyzes their joint impact on the performance of the EV CLSC, and explores the optimal CLSC structure. Specifically, this study develops five game theory models considering different CLSC structures and consumers’ green awareness under government subsidy and varied channel leaderships. Combining theoretical analysis with numerical simulation, the study reveals the performance of the EV CLSC and indicates the optimal CLSC decisions for different players. The result suggests that an EV manufacturer should develop an EV CLSC by itself considering the elimination of double marginalization. When a third-party player is incorporated, the EV manufacturer should undertake the collection effort by itself to optimize the benefit for both the EV manufacturer and the third-party player, especially considering the increasing green awareness of consumers. And a lift of each player’s channel power would always be a wise choice for each other. For the government which has the goals of promoting both the EV industry and the end-of-life treatment of obsolete EVs, a series of trade-offs including the CLSC structure and channel leadership should be considered prudently. This study contributes to the comprehensive understanding of the optimal decisions of the EV CLSC, and will benefit the development of the EV CLSC.