Differential Game Analysis in a Dual-Channel Automotive Supply Chain Under the CAFC-NEV Credits and Carbon Credit Policies

This paper focuses on alternatives to the CAFC-NEV credits policy in the automotive industry of China. It considers a dual-channel supply chain consisting of a manufacturer and a retailer that can simultaneously produce and sell new energy vehicles (NEVs) and internal combustion engine vehicles (ICEVs). Differential game theory is employed to explore dynamic optimal decisions under CAFC-NEV credits and carbon credit policies. The results suggest that the strategies combining CAFC-NEV credits and carbon credit policies are equivalent to a single CAFC-NEV credits policy. Therefore, implementing the carbon credit policy on the basis of the CAFC-NEV credits policy does not affect the increase in NEV range. If the NEV credit score is below a certain threshold, the carbon credit policy will result in a higher range increase and brand goodwill of NEV. In the transition process of implementing the carbon credit policy based on CAFC-NEV credits and subsequently canceling the CAFC-NEV credit policy, the profits of supply chain members change slightly. The findings provide a theoretical basis for the timely exit of the CAFC-NEV credits policy.