Optimal government policies for carbon-neutral power battery recycling in electric vehicle industry

Power battery recycling plays a crucial role in mitigating environmental impacts, conserving valuable resources, and promoting sustainability in the rapidly expanding electric vehicle industry. However, current research lacks an analysis of the interplay between government policies, technology, economics, and the environment. This study utilizes the Stackelberg model to explore power battery recycling and echelon utilization. We examine the impact of government policies, such as non-interference (GNI), environmental tax (GT), dismantling subsidies (GDS), and recycling subsidies (GRS), as well as technological maturity and resource efficiency. Our research focuses particularly on two vital factors: products environmental footprint (PEF) and the recycling rate. The findings reveal that government intervention can effectively reduce the PEF, especially when dismantling technology is well-developed. The intervention outcomes are significantly influenced by recycling costs and revenue from echelon utilization of power battery. Concerning recycling rates, a combination of higher tax rates and the GT policy proves most effective in promoting increased recycling rates. Nevertheless, the GDS policy shows promise with lower tax rates. Furthermore, we identify feasible conditions for carbon neutrality and explore how government policies can facilitate this transition. Finally, our study gives policy recommendations for achieving maximum recycling rates and minimum PEF.