According to the report “Beyond recycling: The circular opportunity for passenger cars in Europe” by Circle Economy, only 40% of the automotive sector is circular. Although 78% of materials were recycled in 2020, circularity requires more than just recycling, it is also necessary that recycled materials be used as inputs for new vehicles, and currently only 21% of the materials used are recycled.

While until a few years ago circularity has focused on end-of-life and battery recycling, this is evolving towards recyclability of the entire vehicle and its processes, creating a strategic opportunity with revenue potential for companies that are positioned to take advantage of circular solutions from the rise of electric vehicles and vehicle automation.

The report indicates that to achieve a net-zero auto industry, it will not be enough to abandon fossil fuels, but rather five key circular economy strategies will be necessary:

  1. Increase recycled content in production.
  2. Optimize the use of materials in vehicles by innovating materials and expanding the range by weight of batteries.
  3. Reuse and remanufacture parts.
  4. Adopt new business models.
  5. Innovation and implementation of recycling at the end of its useful life.