Vehicle Company’s Decision-Making to Process Waste Batteries: A Game Research under the Influence of Different Government Subsidy Strategies

Abstract

With the increase in the number of waste power batteries and the occurrence of related environmental problems, battery recycling is receiving extensive attention. Driven by economic benefits, many companies have begun to deploy the waste battery processing market and government subsidies also play an essential role in battery recycling. Considering the vehicle company outsources processing tasks or invests in research and development (R&D), this paper studies the optimal decision-making problem of the supply chain under government subsidy to the battery manufacturer or the battery manufacturer. The research finds that: (1) For the government, when the vehicle company outsources processing tasks, compared with subsidizing the vehicle company, the total recycling volume when subsidizing the battery manufacturer is higher. When the vehicle company invests in R&D, the total recycling volume under different government subsidy strategies is equal. (2) The vehicle company’s decision is only related to its processing costs; when the unit processing cost is low, the vehicle company’s profit under the strategy of investing in R&D is higher. However, when the unit processing cost is high, the profit of outsourcing processing tasks is higher. (3) With increase in unit subsidy and decrease in unit processing cost, the total recycling volume will increase. These findings can provide decision-making help for the government in formulating subsidy policies and the vehicle company in determining processing strategies in the future.