New Energy Vehicle Supply Chain Decisions Considering Fairness Concern Under the Dual-Credit Policy

Abstract

The sustainable development of the new energy vehicle (NEV) supply chain is shaped not only by policy and technology but also by the behavioral factors of supply chain members. In China, the dual-credit policy, as the representative non-subsidy automotive industrial policy, is a key institutional arrangement for the low-carbon transformation of China’s automotive industry and provides an important reference for designing market-based incentive mechanisms for NEVs worldwide; it has therefore long been a focus of research. Most of the literature, however, treats supply chain firms as fully rational and rarely embeds fairness concerns in a specific policy mechanism, so the interaction between behavioral factors and policy instruments at the supply chain equilibrium level remains under-studied. This paper studies a two-echelon NEV supply chain composed of one component supplier and one vehicle manufacturer, incorporates the fairness concerns of decision makers, and builds a Stackelberg game model. Our contribution lies in embedding the fairness concerns of supply chain members into the dual-credit policy framework and jointly characterizing the CAFC and NEV credit mechanisms. We compare the equilibrium decisions under four scenarios (neither the supplier nor the manufacturer has a fairness concern, only one party has a fairness concern, and both parties have a fairness concern), systematically analyze the effects of fairness concerns on the fuel-saving level, the wholesale and retail prices, the profits of both parties, consumer surplus and environmental performance, and then examine the role of the dual-credit policy parameters. The main conclusions are as follows: fairness concerns generally reduce the fuel-saving investment of both parties and the supplier’s profit, but raise the profit of the party that holds them; fairness concerns have an overall negative effect on consumer surplus, while their effect on environmental performance varies with the concerned party and the parameter range; at the policy level, and measured in dimensionless terms as the percentage change in total fuel saving induced by a one-percent change in each instrument, the credit price is the more effective instrument for encouraging energy saving and emission reduction: its elasticity (0.65–0.71 at the calibrated baseline) is about seven times that of the NEV standard vehicle credit (0.09), and the ranking holds in all four fairness-concern scenarios. This paper provides a theoretical reference for supply chain coordination that incorporates behavioral factors under the dual-credit policy and offers useful implications for other countries and regions in designing market-based incentive mechanisms for NEVs.