Decision model for green supplier selection in new energy vehicles combining prospect theory and VIKOR

Purpose This study aims to develop and validate an integrated multicriteria decision-making model that combines Prospect Theory (PT) with the VlseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR) method to support green supplier selection for new energy vehicle (NEV) firms. The model explicitly incorporates the bounded rationality of decision-makers and resolves multi-objective conflicts, aligning with global carbon neutrality targets. Design/methodology/approach An evaluation index system was constructed across four dimensions – enterprise comprehensive capability, product competitiveness, service level and environmental protection performance – using a literature review and the Delphi method. Subjective and objective weights were determined via the Decision-Making Trial and Evaluation Laboratory (DEMATEL) and entropy weight (EW) methods and were integrated using the minimum deviation method. PT’s value and weighting functions were embedded into VIKOR to compute group utility, individual regret and compromise solutions for supplier ranking. An empirical case study of a power battery enterprise was conducted, with sensitivity and comparative analyses validating its robustness. Findings Supplier X5 emerges as optimal due to balanced performance across criteria. Ranking results remained stable under varying compromise coefficients, and comparative analysis showed the model’s superiority in capturing psychological behavior and achieving compromise optimization over traditional methods. Research limitations/implications This study focuses on the NEV power battery segment, limiting generalizability to other sectors. PT parameters rely on classic calibrations rather than context-specific estimation. Cross-sectional data fail to capture dynamic supplier performance over time. Policy factors are not embedded in the indicator system. Future research should extend the model to diverse industries, apply machine learning for parameter calibration, develop dynamic decision-making frameworks and integrate policy responsiveness and carbon-compliance indicators to enhance model adaptability and policy sensitivity. Practical implications The four-dimensional evaluation system supports NEV enterprises in standardizing green supplier selection, with environmental indicators aligned with low-carbon and compliance requirements. PT’s value and weighting functions quantify loss aversion and risk preferences, adjustable to corporate strategy. The VIKOR method balances group utility and individual regret, clarifying trade-offs between overall performance and specific shortcomings. The combined DEMATEL–EW weighting reconciles expert opinions and integrates subjective–objective information, reducing bias and enhancing the credibility of evaluation processes and outcomes. Social implications By promoting green supplier selection in the NEV industry, the model supports low-carbon development and environmental compliance, contributing to the reduction of industrial pollution and resource consumption. The emphasis on carbon peak and neutrality goals aligns with broader societal efforts to combat climate change. The transparent, multi-criteria framework encourages responsible supply chain practices, fostering public trust in corporate environmental stewardship. Ultimately, this study aids in advancing sustainable transportation, improving air quality and public health outcomes while supporting national and global environmental targets. Originality/value This paper contributes by pioneering the integration of PT with VIKOR in green supplier selection to model bounded rationality; constructing a dynamic, sector-specific evaluation system reflecting technological iteration and carbon reduction; and demonstrating practical applicability through case validation, offering a scientific tool for green supply chain management.