An Evolutionary Game Analysis of China’s Power Battery Export Strategies Under Carbon Barriers

Abstract

With the continuous evolution of international trade, the global market has been steadily expanding while also facing increasing challenges, particularly in relation to the introduction of environmental policies such as carbon barriers. Our research explores how China’s power battery manufacturers can adapt their export strategies to the EU’s carbon barrier policies. Additionally, we examine the roles of government regulations, research institutions, and manufacturers in either facilitating or hindering compliance with carbon reduction objectives. Using evolutionary game theory, we construct models involving government entities, manufacturers, and research institutions to systematically analyze market evolution, strategic interactions, and outcomes among these stakeholders. Our analysis focuses on understanding the competitive dynamics faced by exporting countries under stringent environmental policies and provides strategic insights to guide export strategies. Taking the EU’s carbon barrier policy as a case study, we explore Chinese battery manufacturers’ adaptive strategies and decision-making processes as they respond to shifting market demands and regulatory environments. The findings not only offer valuable insights into exporting countries but also provide policymakers with information on international trade and industrial policy design. Furthermore, we validate our model through numerical simulations and conduct sensitivity analyses on key parameters. The results underscore the importance of governmental adoption of punitive and incentive policies, revealing their substantial impact on stakeholder behavior. Additionally, the study highlights how participants’ pre-cooperation losses and post-cooperation gains influence participation rates and the speed at which stakeholder consensus is reached. By offering a novel approach with which to address carbon barrier challenges, this research contributes valuable perspectives on environmental regulations’ strategic and policy implications in global trade.