Low carbon strategy and coordination for a two-echelon automotive supply chain considering dual credit policy

The dual-credit policy currently plays a crucial role in the automobile industry and significantly contributes to low-carbon operations in the automotive supply chain. This paper employs the game-theoretic approach to build a supply chain comprising a supplier (leader) and an automaker (follower), considers the impact of dual-credit policy, and incorporates vertical spillovers into the supply chain abatement. Both parties lower carbon emissions through vertical spillovers while maximizing profits, thereby studying the low-carbon strategy of the automobile supply chain. Our findings reveal that (1) increased vertical spillover rate reduces the prices of fuel vehicles (FVs) and new energy vehicles (NEVs), raises the low-carbon levels and profits of automakers and suppliers. (2) An increase in the NEV credit ratio under the centralized system raises both price and demand for NEVs, while the low-carbon levels of automotive enterprises are reduced. (3) The carbon emissions of each vehicle under the centralized system will be lower than those of the decentralized system, and the order of total carbon emission levels under both systems is closely related to the credit trading price and credits per NEV. Moreover, we explore the automotive supply chain coordination and find that the Nash bargaining model fully coordinates the supply chain, while the cost-sharing and revenue-sharing contracts do not. Also, numerical analysis shows that the optimal system profit under revenue-sharing is greater than cost-sharing.