Managing Market Competition and Battery Disassembly Design in an Echelon Utilization Supply Chain: The Case of China Electric Vehicle Industry

The echelon utilization of electric vehicle batteries is regarded as an effective method for treating waste batteries, enabling the recycling and reuse of retired electric vehicle batteries. However, the efficiency of battery disassembly is a crucial factor that impacts the potential for battery recycling. When manufacturers take disassembly efficiency into account during the design phase of new electric vehicle batteries, they can significantly reduce disassembly costs at the time of decommissioning. This, in turn, incentivizes recycling and echelon utilization of waste batteries. Our research aims to promote the echelon use of waste batteries and analyze how market competition intensity and profits from battery echelon utilization influence decision-making within the battery recycling supply chain. This paper explores the effect of market competition on battery recycling and echelon utilization, while developing a supply chain model that includes a battery manufacturer responsible for determining the level of battery disassembly design and recycling waste batteries from the market, as well as a new energy vehicle manufacturer that focuses solely on recycling waste batteries. The findings indicate that as market competition increases, the battery manufacturer tends to lower both the level of battery disassembly design and the recycling price for waste batteries. Additionally, the recycling price for waste batteries offered by new energy vehicle manufacturers is also influenced by the intensity of market competition. In scenarios with low competition intensity, the recycling price tends to rise as competition intensifies. Conversely, in highly competitive markets, the recycling price decreases with increased competition. Furthermore, the overall volume of battery recycling is impacted by the intensity of market competition; in highly competitive markets, waste battery recycling is hindered. To enhance the echelon utilization of battery recycling, relevant government agencies should strive to maintain market competition at lower levels while also encouraging the recycling of batteries that do not meet usage standards. This dual approach will improve the benefits associated with the echelon utilization of waste batteries, thereby fostering greater enthusiasm for recycling among the involved enterprises.