How does clean energy transition promote original design manufacturers? A three-party evolutionary game analysis

Abstract

Clean energy transition is the new driving force promoting low-carbon emissions in the manufacturing industry. It brings huge economic opportunities as well as challenges for manufacturers and the government. Original design manufacturers (ODMs) are regarded as a special group of manufacturers in clean energy transition due to their close partnership with foreign parent companies (FPC) in research, design, production, and most importantly, decision making along the supply chain. ODMs are usually restricted by contracts with FPCs and clean energy policies of the local government. To analyze the influence of technology sharing and leakage, investment mode, accountability mechanism, and penalty sharing mechanism, especially static or dynamic energy policies on the clean energy transition, this study constructs a tripartite evolutionary game model composed of ODMs, FPCs, and the local government. The model discusses the guiding effect of multiple policies on ODMs' clean energy transition and FPCs' investment behaviors with the study of stable points, double stable states, and unstable states of the evolutionary game. The results reveal that the conformity effect in clean energy transition would enable ODMs and their FPCs to achieve a win-win result in the process of the transition. The dynamic policy has also been designed considering the proportion of ODMs using clean energy to economize government resources, and the basic subsidy to the transition poses a reverse “U” shape instead of a monotonous effect on ODMs' choices. This paper concludes an optimal clean energy transition strategy for ODMs under the dual pressure of FPCs and governments, while providing theoretical support for the dynamic policy design.