Refund Guarantee Mechanisms for EV Remanufacturing: How Failure Rates and Sourcing Structures Shape Equilibrium Outcomes and Social Welfare

Electric vehicle (EV) remanufacturing is critical to circular economy development. However, consumers suffer from battery-induced range anxiety, limited transferable factory warranties for pre-owned EVs, and low trust in remanufactured components due to unstandardized aftermarket supervision. To mitigate these quality concerns, secondhand EV retailers have adopted a full original-price refund guarantee. While existing studies primarily focus on subsidies, carbon policies, and quality disclosure, few explore refund guarantee mechanisms in EV remanufacturing, especially their threshold effects and interactions with pure and hybrid component sourcing strategies. This study addresses this gap by establishing six game-theoretic models and deriving market equilibria via backward induction. We systematically analyze how failure rates, procurement costs, consumer-perceived quality, and guarantee strength affect market performance, optimal sourcing strategies, and social welfare, with numerical simulations validating our theoretical results. The findings reveal a universal threshold effect: refund guarantees boost sales only beyond a critical strength level, whereas weak guarantees fail to cover compensation costs and may even reduce social welfare. In particular, refund guarantees significantly improve social welfare under pure-remanufactured sourcing. This work offers actionable insights for remanufacturers, consumers, and regulators. Firms can optimize guarantee efficiency by simplifying claim processes, while policymakers can implement differentiated warranty regulations and tiered incentives.