Development Strategy of New Energy Business for Traditional Car Manufacturers under the Dual-Credit Policy

Abstract

With the track of new energy vehicles continuously booming and accelerating, more and more automobile manufacturers are seeking effective methods to help companies stand out. Some of them attempt to split the new energy vehicle (NEV) business module in order to boost brand competitiveness for the top spot in an increasingly competitive market. The dual-credit policy, however, makes Chinese automakers consider whether the benefits of adopting the splitting strategy exceed the drawbacks, yet few domestic studies can offer assistance. As a result, the study develops split strategy and integrative development strategy’s optimal decision models under the dual-credit policy. The paper also addresses which scenario the Integrative development approach or the splitting strategy is more advantageous and effective under using model comparison and numerical analysis. According to the study, manufacturers of fuel vehicles frequently reduce their output and raise their prices in response to the dual-credit policy. The credit price should receive significant attention from both traditional car manufacturers and NEV manufacturers due to its profound impact on both. Whether traditional car manufacturers should split the NEV business module independently depends on the pricing of NEV credits as well as the supply and demand for NEV credits. Traditional car manufacturers can only use a splitting strategy when the price of NEV credits is within a particular range and the NEV credit is surplus.