How Does Carbon Trading Affect the Pricing Strategy of Automobile Companies? A Balancing Act of Optimizing Vehicles Pricing and Production Structures

Yucong Shi, Zihao Jiao*, Jing Wang, Lan Teng, Yanzi Zhang

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

This paper studies the social-economic impacts of carbon trading on pricing management and the low-carbon behavior of automobile companies. We propose a game model between electric vehicles and gas-powered vehicles. Further, the influence of carbon trading on automobile selling price, sales volume, and sales profit are analyzed from the production mode of a certain company that only produces gas-powered vehicles. Our research contributes to the optimization of automotive companies' pricing, production management, and practices in the face of carbon emission quotas restrictions. The profit function was used to establish a game model for the single condition of producing only gas-powered vehicles, and the optimal sales price and profit of gas-powered vehicles were obtained by backward induction. (1) By adjusting the carbon limit, the government can promote the transformation of the automobile industry. (2) Carbon trading presents an opportunity for businesses with lower carbon emissions to mitigate the competitive disadvantage they face in the market.

Original languageEnglish
Title of host publicationMoving Integrated Product Development to Service Clouds in the Global Economy - Proceedings of the 21st ISPE Inc. International Conference on Concurrent Engineering, CE 2014
EditorsXiaoshuan Zhang, Hongyu Ren, Yingfa Lu, Chongqing Wang
PublisherIOS Press BV
Pages873-879
Number of pages7
ISBN (Electronic)9781643683126
DOIs
Publication statusPublished - 26 Sept 2022
Externally publishedYes
Event3rd International Conference on Green Energy, Environment and Sustainable Development, GEESD 2022 - Virtual, Online, China
Duration: 29 Jun 2022 → …

Publication series

NameAdvances in Transdisciplinary Engineering
Volume23
ISSN (Print)2352-751X
ISSN (Electronic)2352-7528

Conference

Conference3rd International Conference on Green Energy, Environment and Sustainable Development, GEESD 2022
Country/TerritoryChina
CityVirtual, Online
Period29/06/22 → …

Keywords

  • Carbon trading
  • competitive market
  • mechanism design
  • pricing decision

Fingerprint

Dive into the research topics of 'How Does Carbon Trading Affect the Pricing Strategy of Automobile Companies? A Balancing Act of Optimizing Vehicles Pricing and Production Structures'. Together they form a unique fingerprint.

Cite this