Which is better? Business models of partial and cross ownership in an NEV supply chain
ISSN: 0368-492X
Article publication date: 30 January 2023
Issue publication date: 13 March 2024
Abstract
Purpose
To examine how shareholding affects optimal profits, R&D innovation, NEV market scale and social welfare in two supply chain models with partial and cross ownership patterns.
Design/methodology/approach
The gradual retreat of government subsidies has directly weakened the financial support available to the stakeholders of new energy vehicles (NEVs). In this context, upstream and downstream enterprises of NEV are constantly seeking new business models of cooperation to achieve possible win-wins. NEV supply chain shareholding is an emerging new practice for such explorations. However, its performance in the NEV supply chain is seldom investigated. In this paper, we employ a Stackelberg game model to investigate how partial and cross-ownership affect the optimal decisions in a NEV supply chain.
Findings
Results showed that: (1) Compared with the unilateral shareholding model, the battery supplier will benefit from cross-ownership in the supply chain, while the NEV manufacturer will not necessarily benefit from it. At the same time, cross-ownership will bring the greatest incentive for battery R&D (2) Supply chain downstream competition will not necessarily lead to the improvement of the total consumption of NEVs or the level of battery design. Pareto improvement can be brought only when one of the manufacturers holds less than a certain equity threshold. In addition, downstream competition will also not necessarily bring more benefits to the battery supplier.
Originality/value
At present, NEV supply chain management has attracted widespread attention from scholars from all walks of life. Previous studies have been carried out that covers topics such as pricing strategies and optimal profits and the role of NEV in the sustainable development of the automotive industry supply chain, or disparate impacts of government subsidies and carbon emission regulation on supply chain members. However, as far as the authors know, compared with the new emerging NEV corporate practice, the shareholding phenomenon between upstream and downstream in the supply chain of NEV has not been studied in the existing studies.
Keywords
Acknowledgements
This work is supported by the National Natural Science Foundation of China under Grant No. 72271075, No. 71801076, No. 72071058 and No. 72071065.
Citation
Zhu, X., Liu, J., Gu, M. and Yang, C. (2024), "Which is better? Business models of partial and cross ownership in an NEV supply chain", Kybernetes, Vol. 53 No. 4, pp. 1306-1330. https://doi.org/10.1108/K-03-2022-0415
Publisher
:Emerald Publishing Limited
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