Advancing Electric Vehicle Battery Recycling: A Study of Coordination and Cooperative Strategies

With the surge in popularity of electric vehicles (EVs), managing retired batteries has emerged as a critical issue. Challenges such as information asymmetry and traceability difficulties amplify the risks and costs associated with recycling and reusing retired batteries. Inadequate collaboration within the supply and recycling chains diminishes recycling efficiency, leading to serious ecological pollution and resource wastage. This paper examines a tri-echelon closed-loop supply chain involving an EV manufacturer, a retailer, and a third-party recycler. By employing non-cooperative game theory, we model and compare the equilibrium outcomes of five cooperative strategies among these three players. We further scrutinize the influence of environmental policies, such as carbon trading or reward-penalty, and the degree of battery information traceability permitted by blockchain technology on the efficacy of these cooperative strategies. By using cooperative game theory, specifically the Shapley value, we suggest a fair profit distribution mechanism that promotes coordination within the supply chain. Moreover, we use empirical data from the Chinese EV market to conduct a case study. Our findings provide theoretical insights for firms and industries grappling with the escalating challenge of retired EV batteries.