Incentivizing new development of battery swapping services: Government subsidies and CSR

The battery swapping model can effectively address the current issue of low energy replenishment efficiency in new energy vehicles. However, the low market share and profitability issues in the battery swapping market need urgent resolution. To reveal the significant impact of government subsidies and corporate social responsibility (CSR) on enhancing battery swapping service operations, we design various scenarios to discuss the optimal decisions of supply chain entities and the conditions for maximizing social welfare. The following conclusions can be drawn: (1) Operational subsidies can reduce the price of battery swapping services, while R&D subsidies tend to increase product prices; thus, operational subsidies have a more substantial effect on improving social welfare. (2) When government subsidies fall below a certain threshold, CSR plays a more critical role in the market than government support, yielding higher returns on investment for CSR initiatives. (3) A "cost-sharing- profit-sharing" contract effectively coordinates supply chain members to achieve Pareto efficiency. (4) The effects of mixed subsidies surpass those of single-type subsidies; however, there is limited room for enhancement. Currently, operational subsidies are most effective for the development of battery swapping enterprises. Our research aims to address the issue of insufficient motivation for CSR investments among battery swapping companies and provides actionable policy recommendations for governments.