Automotive Industry Embraces the Circular Economy

By Dick Slansky


Many manufacturers are shifting away from a “take, make, and throw away” mentality to move toward a circular economy. In this economy, waste is considered a valuable resource, and companies research new and more efficient ways to extend a product’s useful life. They can design products and use materials with end-of-life and disposability and impact to the environment as a design criterion. There is also a move to a service-based model where products are leased instead of sold, where they can be more easily refurbished, remanufactured, or recycled by the manufacturer when they reach end-of-life or break down.

Sustainability and circular economy strategies go hand in hand, with cars being a product that lends itself to being reused, Circular Economyremanufactured, and recycled to a significant degree. Additionally, car makers are placing an increasing focus on cleaning up vehicle production and supply chains.

While the automotive industry faces numerous challenges as they transition to more eco-friendly forms of electromobility, the common consensus is that the industry needs to look well beyond battery-electric vehicles (BEVs) to decarbonize transportation. BEVs may not emit CO2 but the factories that make them do, along with the sprawling automotive supply chain that manufactures the components for the vehicles. Establishing workable and concise circular economy strategies can help the automotive sector drive down lifecycle carbon emissions for the manufacture of passenger vehicles. But what does it take to produce a vehicle that fits the goals of a circular lifecycle?

By examining how new technologies and business models can repurpose the materials used to both make and recycle cars, along with methods to reduce CO2 emissions in production systems, the basic notion and central idea is that of a zero-carbon car – a vehicle that has attained its full potential with respect to carbon efficiency. While there are experts in the industry that concede that the automotive value chain may never be totally free of emissions, it can be significantly improved by focusing on net zero materials waste. And the automotive industry appears to be facing this challenge head on.

Implementation of a Circular Economy Requires a Holistic Approach

A linear economy – which involves taking raw materials and manufacturing a product only for it to be thrown away at end-of-life has been the industry norm for decades. In contrast, a circular economy is based on the principle of reusing and recycling resources. For the automotive industry that can include everything from the vehicle body to tires, with the goal of extending the life of the vehicle and its components. It can involve sharing, leasing, repairing, refurbishing, and recycling the materials that make up the product for as long as possible.

Car makers that are implementing circular economy strategies for their products understand that this must be a holistic approach that spans the entire design/build/maintain/disposal product lifecycle. Every phase of this lifecycle must be involved, starting with designing for sustainability. Next, a manufacturing phase that uses recycled and eco-friendly materials along with re-manufacturing and refurbishing processes. The end-result of this holistic lifecycle is a product that at end-of-life becomes the source for materials and components for the next generation of vehicles.


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Keywords: Sustainability, Circular Economy, Recyclable Materials, Digital Transformation, Net Zero Manufacturing, BEVs, 3D Printing, CO2 Emissions, ARC Advisory Group.


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