Recycling mode selection and carbon emission reduction decisions for a multi-channel closed-loop supply chain of electric vehicle power battery under cap-and-trade policy

In recent years, the rapid growth of electric vehicle (EV) ownership in China has led to the large-scale retirement of power batteries. Establishing an effective recycling system for spent power batteries is a critical task. Therefore, we investigate the recycling mode selection and the carbon abatement decision in a closed-loop supply chain (CLSC) of EV power batteries under the carbon cap-and-trade policy. We propose four mixed -channel recycling modes in which two or three parties from a retailer, a third-party recycler and an echelon utilization enterprise participate in the recycling business. In the reverse chain, the collected spent power bat-teries are classified, wherein the echelon-utilizable batteries are processed into echelon utilization products for sale by the echelon utilization enterprise, while both the non-echelon-utilizable batteries and the post-echelon -utilized batteries are transferred to the manufacturer for extracting raw materials to produce new power bat-teries. We obtain equilibrium results by solving Stackelberg game models. The results reveal that when the competition intensity among recycling channels is below a certain threshold and the recycling price sensitivity is above a certain threshold, the optimal mode is the simultaneous participation of the retailer, the third-party recycler, and the echelon utilization enterprise. Otherwise, the optimal mode is the echelon utilization enter-prise recycling with the retailer or third-party recycler. Higher recycling channel competition and lower recy-cling price sensitivity reduce the total recycling quantity. Higher carbon trading price, a lower investment cost coefficient for carbon abatement and increased consumers' low-carbon awareness will encourage the manu-facturer to implement carbon reduction activities, thus reducing total carbon emissions. In addition, the engagement of the echelon utilization enterprise in the recycling business has a positive effect on relieving the recycling pressure and improving the manufacturer's profit.

Automated summary

The rapid growth of electric vehicle ownership in China has resulted in a large-scale retirement of power batteries. Establishing an effective recycling system for these batteries is crucial. This study investigates the selection of recycling modes and the decision of carbon abatement in a closed-loop supply chain of EV power batteries. The results show that the optimal mode is the simultaneous participation of the retailer, third-party recycler, and echelon utilization enterprise when the competition intensity among recycling channels is below a certain threshold and the recycling price sensitivity is above a certain threshold. Additionally, the engagement of the echelon utilization enterprise has a positive effect on relieving recycling pressure and improving manufacturers' profits.