Supplier development or supplier integration? Equilibrium analysis in competing electric vehicle supply chains with power battery recycling

This paper explores the interaction of supplier development and supplier integration in competing electric vehicle (EV) supply chains with power battery recycling, each composing of one electric vehicle manufacturer (EVM) and one power battery supplier (PBS) who recycles the retired batteries. Each EVM purchases batteries from the PBS of itself and determines whether to integrate with its PBS as well as how much to invest in its PBS to cut battery cost, while the PBS decides the recycling rate. It is shown that after integration the EVM with less capability would reduce investment on supplier development and its PBS would decrease the recycling rate when the heterogeneity of EVMs' supplier development capabilities (HSDCs) is large enough and EVM with more capability integrates its PBS; otherwise, an EVM would increase investment on supplier development and its PBS would raise the recycling rate after integrating with its PBS. It is also shown that the EVM with more capability always integrates with its PBS, while whether the EVM with less capability integrates with its PBS depends on the HSDCs and the value of echelon use of the retired batteries. Finally, it is shown that (1) the higher the value of echelon use is, the better the environment is; (2) if both EVMs do not integrate with their PBSs, the environment would become better.