Collection and repurposing decisions for retired power batteries under different firm types and subsidy schemes

The rapid accumulation of retired power batteries poses significant environmental and economic challenges, making the improvement of their collection and repurposing an urgent practical issue. However, existing research has yet to provide a comprehensive examination of the factors influencing these decisions and the strategies for improving system performance. To address this gap, this study develops a joint continuous optimization model for battery collection and repurposing. We systematically examine differences in optimal decision-making and the associated environmental impacts across different types of firms—repurposing firms, recycling firms, and diversified firms—as well as under alternative government subsidy policies. The analysis yields four main findings. First, dedicated repurposing firms achieve the highest proportion of repurposed batteries among collected units, whereas recycling firms exhibit the lowest repurposing rate. Second, diversified firms set the highest collection prices overall. Third, when the environmental benefits of repurposing are sufficiently large, repurposing firms obtain the greatest benefit from each collected retired battery. Fourth, subsidies linked to repurposing activities effectively increase both the quantity and the proportion of batteries that are repurposed, while subsidies based solely on collection volume only expand the total quantity collected. These results underscore the strategic advantage of specialization in repurposing and demonstrate the superior effectiveness of repurposing-based subsidies in promoting sustainable battery management.