Optimal operation and social evaluation in a closed-loop supply chain with quality and reuse of used electric vehicle batteries under government subsidy

This paper proposes the optimal operation of a two-period closed-loop supply chain (CLSC) considering quality of used batteries, their secondary use and recycling into materials, and government subsidy for: 1) secondary use (model I); 2) collection and dismantling of used batteries (model II); 3) makes social welfare (SW) evaluation for the optimal operation in CLSC (model III). First period involves production and sales of new EV battery. Second period does secondary use and recycling of used batteries with quality classifications: high, medium and low. CLSC consists of a battery manufacturer (Stackelberg leader), a third party, a power grid company, and a vehicle manufacturer. Numerical analysis compares the optimal operation and SW for each model. Sensitivity analysis clarifies how collection rate, quality classification and recycling rate of used batteries and each government subsidy affect the optimal operation and SW in CLSC.