Optimal new energy credits strategy for fuel vehicle manufacturers considering government subsidy

To realize the 'dual carbon' goal, governments around the world (e.g., China) have been implementing subsidy and dual credit policies to promote the adoption of new energy vehicles (NEVs). The traditional automakers who sell fuel vehicles (FVs) should consider how to obtain sufficient NEV credits to reach the carbon emission standard. However, direct producing NEVs is often costly and facing uncertainty. In this work, we develop a game-theoretical model to analyze two credit strategies: (ⅰ) Mode P: Purchasing NEV credits or (ⅱ) Mode R: Reselling NEVs. Our results indicate that when the credit trading price is relatively low, the selling price of FVs under mode R is higher than under mode P, while the FV automaker sells more FVs under mode P than under mode R. Additionally, Mode R leads to an increase in the total sales volume for the FV automaker. As a result, the FV automaker's profit under mode R is always higher than under mode P. We also compare the performance of the NEV automaker under both modes. The results show that when the operating cost of NEVs is low and the credit trading price is moderate, the NEV automaker achieves higher profits under mode P.