Optimal Pricing of Electric Vehicle Battery Manufacturer and Comprehensive Service Provider in a Closed-Loop Supply Chain

Although the adoption of electric vehicles can significantly lessen energy shortages and environmental pollution, it also raises issues with recycling and disposal of used batteries. A full service provider that offered three services—retailing, recycling, and reusing—appears on the market in this situation, creating a new model that has never been researched or applied previously. By using a Stackelberg game model and concentrating on how this provider would affect recycling decisions in the closed-loop supply chain, this study investigates the effects that the advent of this integrated provider will have on the electric vehicle batteries recycling market. According to the study, the integrated provider would decide to cut consumer subsidies within a given range in order to lessen the impact that rising battery dismantle costs will have on rising marginal profits. Second, the manufacturer will decide to raise the price of virgin batteries to offset the rise in the average cost of raw materials brought on by the increase in the battery raw material savings factor, which would affect the integrated provider’s overall income. Additionally, the supply chain’s overall income will rise before falling, therefore the recycling savings factor cannot be either too high or too low. The primary contribution of this research is the analysis of the provider’s optimal pricing strategy in the closed-loop supply chain, which can lead to recommendations for the long-term growth of this comprehensive service provider.