Exploring Strategic Collaboration Between Traditional Automakers and New Energy Vehicle Manufacturers Under the “Dual Credit” Policy

Abstract

Under the impetus of the “Dual Credit” policy, traditional fuel vehicle manufacturers are confronted with significant pressure to meet new energy vehicle credit requirements. To address this challenge, these manufacturers are increasingly adopting the Original Design Manufacturer (ODM) strategy to collaborate with new energy vehicle enterprises, thereby acquiring credits and expanding their market presence. However, this strategic approach not only intensifies competition between new energy and traditional fuel vehicle markets but also reshapes the profit distribution between the two types of firms. Drawing upon the framework of the Dual Credit policy, this study establishes a Cournot game model to examine the strategic interactions between traditional fuel vehicle manufacturers and new energy vehicle producers. It further investigates the optimal production decisions under the ODM strategy and evaluates their implications for market dynamics and corporate profitability. The findings reveal that, although the ODM strategy heightens market competition, it leads to substantial profit improvements for both types of manufacturers compared to the alternative of directly purchasing credits, while also fostering the growth of the new energy vehicle sector. Moreover, the Case study demonstrates micro-level impact of the dual credit policy on enterprises’ response strategies, offering valuable insights for policymakers and industry decision-makers.