The transition toward low-carbon transportation represents a critical strategy for mitigating climate change and reducing greenhouse gas emissions. New energy vehicles (NEVs), powered by advanced battery technologies, have emerged as a pivotal solution to address the dual challenges of energy security and environmental degradation. However, the high costs and technological uncertainties associated with battery research and development (R&D) present significant strategic dilemmas for NEV manufacturers in selecting optimal production modes. This study investigates the environmental and economic implications of three distinct battery production strategies—in-house R&D, outsourcing, and joint R&D collaboration—within a supply chain framework comprising traditional fuel vehicle manufacturers, NEV manufacturers, suppliers, and third-party battery producers. By developing game-theoretic models, we analyze how R&D efficiency, market distribution preferences, and R&D cost-sharing ratios influence equilibrium outcomes including pricing, green performance, market demand, and profitability across supply chain participants.Key findings reveal that: (1) reduced R&D efficiency under in-house production negatively impacts NEV manufacturers' environmental performance and profitability while benefiting traditional automakers; (2) consumer market distribution significantly shapes strategic decisions, with traditional vehicle market dominance adversely affecting green innovation; (3) outsourcing proves superior only when battery suppliers demonstrate clear technological leadership; and (4) joint R&D strategies enhance supply chain profitability but are most effective in markets with high traditional vehicle demand. This research provides actionable insights for environmental management practitioners and policymakers seeking to promote sustainable manufacturing practices and accelerate the decarbonization of the automotive industry.