Integrative Electric Vehicle Pricing—Battery Recycling Mechanisms for Battery Swapping and Charging Modes
Journal
IEEE Transactions on Engineering Management
Journal Volume
73
Start Page
2711-2724
ISSN
0018-9391
1558-0040
Date Issued
2026
Author(s)
Hong, Si-Rui
Abstract
The battery-swapping electric vehicle (SEV) is an example of a circular economy (CE) business model, which has been increasingly urged by governments. To facilitate battery circularity, governments offer incentive schemes, such as the reward-penalty mechanism (RPM) aimed at encouraging battery recycling, and special purchase (SP) subsidies for SEVs aimed at promoting CE business models. However, which incentive is more conducive to environmental and social welfare (SW) remains unclear. To address this issue, we construct a game-theoretic model to explore the impacts of these incentive schemes on different stakeholders [i.e., the charging EV (CEV) manufacturer, the SEV manufacturer, the government, and consumers]. We derive several findings. First, under the RPM scheme, CEV manufacturers tend to lower EV prices and achieve higher profits when the recycling target is relatively low. In contrast, SEV manufacturers benefit from the spillover effects of SP subsidies, achieving higher profits by raising EV prices. Second, at high subsidy levels, the SP subsidy outperforms the RPM scheme in improving environmental performance. Third, under certain conditions, the SP subsidy yields higher SW than the RPM scheme. Notably, when the reward-penalty intensity exceeds a certain threshold, a “danger zone” emerges, leading to a decline in SW. Finally, we conduct two extensions: considering endogenous government incentives and exploring a combined policy. We find that the main results remain robust. Overall, these findings provide valuable insights for managers and policymakers, accelerating the transition of the EV industry towards CE.
Subjects
Battery-swapping mode
electric vehicle
end-of-life battery recycling
government subsidy
product-service system
Publisher
Institute of Electrical and Electronics Engineers (IEEE)
Type
journal article