Pricing and Emission Reduction Strategies of Heterogeneous Automakers Under the “Dual-Credit + Carbon Cap-and-Trade” Policy Scenario

Chenxu Wu, Yuxiang Zhang (), Junwei Zhao, Chao Wang () and Weide Chun
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Chenxu Wu: College of Management Science, Chengdu University of Technology, Chengdu 610059, China
Yuxiang Zhang: College of Management Science, Chengdu University of Technology, Chengdu 610059, China
Junwei Zhao: College of Management Science, Chengdu University of Technology, Chengdu 610059, China
Chao Wang: College of Management Science, Chengdu University of Technology, Chengdu 610059, China
Weide Chun: College of Management Science, Chengdu University of Technology, Chengdu 610059, China

Mathematics, 2025, vol. 13, issue 14, 1-34

Abstract: Against the backdrop of increasingly severe global climate change, the automotive industry, as a carbon-intensive sector, has found its low-carbon transformation crucial for achieving the “double carbon” goals. This paper constructs manufacturer decision-making models under an oligopolistic market scenario for the single dual-credit policy and the “dual-credit + carbon cap-and-trade” policy, revealing the nonlinear impacts of new energy vehicle (NEV) credit trading prices, carbon trading prices, and credit ratio requirements on manufacturers’ pricing, emission reduction effort levels, and profits. The results indicate the following: (1) Under the “carbon cap-and-trade + dual-credit” policy, manufacturers can balance emission reduction costs and NEV production via the carbon trading market to maximize profits, with lower emission reduction effort levels than under the single dual-credit policy. (2) A rise in credit trading prices prompts hybrid manufacturers (producing both fuel vehicles and NEVs) to increase NEV production and reduce fuel vehicle output; higher NEV credit ratio requirements raise fuel vehicle production costs and prices, suppressing consumer demand. (3) An increase in carbon trading prices raises production costs for both fuel vehicles and NEVs, leading to decreased market demand; hybrid manufacturers reduce emission reduction efforts, while others transfer costs through price hikes to boost profits. (4) Hybrid manufacturers face high carbon emission costs due to excessive actual fuel consumption, driving them to enhance emission reduction efforts and promote low-carbon technological innovation.

Keywords: cap-and-trade policy; dual-credit policy; monopoly market; pricing strategy; emission reduction investment (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2025
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