The impact of government policies on the coordination of power battery closed-loop supply chain

Effective coordination in power battery closed-loop supply chains is critical to align stakeholder incentives, balance environmental and economic goals in the electric vehicle industry. Thus, this paper investigates the coordination problem of a power battery closed-loop supply chain consisting of a battery manufacturer, an electric vehicle producer and consumers. Considering the environmental protection factor, this study examines the impacts of four types of government subsidy policies on supply chain decision-making based on Stackelberg game. Results indicate that while the subsidy policy based on recycling quantity solely increases the recovery price, the subsidy policy based on recycling capacity enhances both the battery range and recycling price, thereby leading to an increase in the sales price of electric vehicles. Due to its substantial financial burden, the deposit-refund policy is proposed to be replaced by the subsidy-reward policy to coordinate the power battery closed-loop supply chain. The reward-penalty policy based on recycling quantity can promote the sale and recycling of EVs, but it does not ensure an optimal battery range. Therefore, we propose an innovative bidirectional subsidy policy, which integrates forward capacity-based production subsidies with reverse quantity-linked reward-punishment mechanisms, to achieve supply chain coordination. Furthermore, some management implications are given through numerical simulation combined with theoretical analysis. Our study offers a novel policy framework that bridges economic and environmental objectives, providing actionable strategies for advancing sustainable power battery supply chains in the EV industry.