The influences of Nash bargaining fairness concerns on financing strategies and operational decisions of an EVSC

Abstract This paper establishes an electric vehicle supply chain (EVSC), which consists of a capital‐constrained electric vehicle (EV) retailer and a dominant EV manufacturer. Two types of financing, that is, manufacturer credit financing (MF) and bank credit financing, are available for the EV retailer. By incorporating fairness concerns, we characterize how they affect the EVSC members’ financing strategies and operational decisions. Additionally, we develop the extension model and further capture the impacts of Nash bargaining fairness concerns. The analytical results reveal that the MF strategy is more profitable in most cases. And its adoption region under Nash bargaining fairness concerns is a bit larger than that under fairness concerns. We also find that fairness concerns lead to lower wholesale prices and EV green levels. Counterintuitively, the EV retailer also reduces retail prices in response. Under Nash bargaining fairness concerns, the EV manufacturer makes less sacrifice and invests more in green innovation of EV, and the EV retailer sets higher retail prices. It indicates that different fairness benchmarks change members’ decisions. The results we derive give useful guidelines and insights for EVSC members’ financing strategies and operational decisions.