Dublin, May 07, 2025 (GLOBE NEWSWIRE) -- The "Automotive Circular Economy Market - A Global and Regional Analysis: Focus on Application Type, Product Type, and Region - Analysis and Forecast, 2024-2034" report has been added to ResearchAndMarkets.com's offering.
The global automotive circular economy market was valued at $153.63 billion in 2024 and is projected to grow at a CAGR of 11.48%, reaching $455.33 billion by 2034. The increasing adoption of circular economy practices in the automotive industry, such as recycling, remanufacturing, and reusing parts and materials, is driving this market growth.
As the automotive sector transitions toward more sustainable and resource-efficient solutions, the demand for refurbished, remanufactured, and recyclable vehicle components is expected to rise. Additionally, the growing focus on reducing carbon footprints, extending vehicle lifecycles, and improving the efficiency of manufacturing processes are contributing factors. With advancements in green technologies, electric vehicles, and sustainable manufacturing, the automotive circular economy market is set for significant expansion in the coming decade.
North America is expected to lead the automotive circular economy market, driven by its strong regulatory frameworks, technological innovations, and investments in sustainable manufacturing. The U.S. and Canada are pioneering efforts in vehicle recycling, remanufacturing, and the use of recycled materials, with key industry players pushing the adoption of circular practices in automotive production.
Strong public-private partnerships, advancements in battery recycling technologies, and increasing demand for electric vehicles (EVs) are driving the region's dominance. North America's focus on reducing carbon footprints, extending vehicle lifecycles, and improving resource efficiency positions it as a leader in the automotive circular economy, paving the way for a sustainable, resource-efficient future in the automotive industry.
Market Drivers: Stringent Government Regulations and Policies
Stringent government regulations and policies significantly impact the automotive circular economy market by persuading industry players to adopt sustainable practices and reduce environmental footprints. Regulatory frameworks across regions, including the European Union End-of-Life Vehicles Directive, China EV battery recycling mandates, and India Vehicle Scrappage Policy, are creating an environment of heightened accountability. Such policies necessitate adherence to specific recycling targets, waste reduction, and sustainable resource management, consequently reshaping traditional automotive manufacturing and end-of-life vehicle disposal practices. As compliance becomes mandatory, automakers are increasingly investing in circular economy processes, leading to widespread industry transformation.
Automotive manufacturers have proactively responded to these regulatory pressures, integrating circular economy principles into their operational frameworks. For instance, Renault Group established its Re-Factory, aligning with European directives by reusing vehicle components and second-life battery systems. In response to EU regulations, BMW Group has substantially increased the share of recycled materials in its vehicles, reflecting strategic alignment with policy requirements. Furthermore, Nissan, complying with Japan Automobile Recycling Law and global sustainability policies, developed a joint battery recycling venture, 4R Energy, to manage end-of-life EV batteries responsibly.
Market Challenges: Complex Supply Chains and Infrastructure Challenges
Complex supply chains and infrastructure challenges pose significant restraints to the effective adoption of circular economy practices within the automotive industry. The global automotive sector is characterized by intricate supply networks spanning multiple regions, diverse stakeholders, and extensive logistical operations. Such complexity often complicates automotive components' traceability, recovery, and recycling, particularly those containing hazardous materials or advanced technologies such as batteries. Additionally, inadequate recycling and remanufacturing infrastructure, especially in emerging markets, further limits the industry's capacity to efficiently manage end-of-life vehicles and components, hampering the full potential of circular economy initiatives.
To address these challenges, automotive manufacturers and stakeholders are increasingly engaging in strategic collaborations and investments aimed at enhancing circular economy infrastructures. Initiatives include the establishment of regional recycling hubs, joint ventures with specialized recycling companies, and investment in advanced technologies for component traceability, sorting, and remanufacturing.
Market Opportunities: Growing EV Adoption Creating Substantial Opportunities in Repurposing Batteries
The increasing adoption of electric vehicles (EVs) presents a substantial opportunity for the automotive circular economy, specifically in the area of battery repurposing. Electric vehicle batteries typically retain considerable residual capacity, approximately 70-80%, after their automotive lifespan, making them suitable for secondary, less-demanding applications, such as stationary energy storage. Leveraging second-life battery solutions addresses environmental concerns related to battery waste, conserves valuable raw materials, and provides cost-effective energy storage options. This repurposing strategy thus supports sustainability objectives, creates new revenue streams for automakers, and significantly enhances battery lifecycle management overall economics and efficiency.
Furthermore, the future potential for battery repurposing is considerable, driven by projected exponential growth in EV adoption globally. By 2030, the volume of batteries reaching the end of their automotive use is expected to increase substantially, creating extensive market opportunities in energy storage for residential, industrial, and grid-scale applications. Advances in battery management technologies and supportive regulations promoting battery reuse will further accelerate this market segment growth. Companies proactively investing in battery repurposing infrastructure and technologies stand to benefit from early-mover advantages, securing a competitive position within the evolving electric mobility and sustainable energy ecosystems.
Industrial Impact
The industrial impact of the automotive circular economy market is transformative across multiple sectors, including manufacturing, automotive parts, and waste management. By embracing circular practices, the market is driving significant changes in production processes, reducing waste, and promoting sustainability within the automotive industry. The use of remanufactured parts, such as engines, transmissions, and batteries, helps conserve valuable resources and lowers manufacturing costs, making automotive products more affordable for consumers. This shift toward a circular economy promotes innovation in manufacturing technologies, supply chain management, and logistics while encouraging the growth of green businesses and sustainable material markets.
The companies involved in the automotive circular economy market include major industry players such as Umicore, Sims Metal (Sims Limited), ZF Friedrichshafen AG, BorgWarner, LKQ Corporation, Valeo, Copart Inc., IAA Holdings, LLC., RB Global, Renault Group, BMW Group, TOYOTA MOTOR CORPORATION, Redwood Materials Inc., Aptiv, Bosch GmbH, and Marelli Holdings Co., Ltd. These companies are enhancing their capabilities through strategic partnerships, collaborations, and technology advancements to improve the resilience and performance of automotive circular economy in demanding environments. Their continued investments in research and development are driving the growth of the market while supporting the broader trends in the automotive industry.
Market Segmentation Trends
Passenger Vehicles to Lead the Market (by Vehicle Type)
Passenger vehicles are expected to dominate the automotive circular economy market, driven by the growing demand for sustainable mobility solutions and regulatory pressures for reduced emissions. As automakers face increasing consumer and regulatory demands for greener vehicles, the adoption of circular practices such as vehicle recycling, parts remanufacturing, and the use of recycled materials is gaining momentum.
Due to their high production volumes and longer lifecycles, passenger vehicles present significant opportunities for resource recovery and waste reduction. Innovations in battery recycling for electric vehicles (EVs) and sustainable material usage further propel this trend. As governments worldwide tighten environmental standards, the passenger vehicle segment is set to lead the way in the transition to a circular automotive economy, ensuring a sustainable, resource-efficient future for the industry.
Internal Combustion Engine Vehicles to Lead the Market (by Propulsion Type)
Internal combustion engine (ICE) vehicles are expected to dominate the automotive circular economy market, driven by the large existing fleet and ongoing efforts to improve sustainability in their lifecycle. While the transition to electric vehicles (EVs) is gaining momentum, ICE vehicles continue to make up most of the global vehicle production and sales.
Circular practices such as remanufacturing engine components, recycling automotive parts, and reducing emissions during the production process are increasingly being implemented to extend the life cycle of these vehicles. The extensive availability of parts, well-established infrastructure for recycling, and the push for eco-friendly solutions ensure that ICE vehicles remain central to the circular economy, paving the way for more sustainable automotive operations even as the industry shifts toward greater electrification.
Original Equipment Manufacturers (OEMs) (by End-User Type)
Original equipment manufacturers (OEMs) are expected to dominate the automotive circular economy market, driven by the increasing need for sustainable vehicle production and component sourcing. As the automotive industry focuses on reducing its environmental footprint, OEMs are incorporating circular economy practices such as remanufacturing, recycling, and refurbishing in their production processes.
Furthermore, the increasing pressure for manufacturers to meet stricter regulatory standards regarding environmental impact is pushing OEMs to adopt circular practices in designing and producing new vehicles and components. The growing consumer demand for eco-friendly and energy-efficient vehicles also aligns with the OEMs' efforts to embrace circular economy strategies, ensuring their continued dominance in the market and reinforcing their commitment to sustainability within the automotive industry. As the automotive sector moves toward greener, more sustainable practices, OEMs are expected to remain a driving force in the circular economy's growth.
Recycled Products to Lead the Market (by Process Type)
Recycled products are expected to dominate the automotive circular economy market, driven by the increasing emphasis on reducing waste, conserving resources, and lowering environmental impacts. As the automotive industry shifts toward sustainability, recycling materials such as metals, plastics, and batteries have become a key process in minimizing resource consumption and reducing the carbon footprint.
Companies are increasingly focusing on developing efficient recycling technologies to recover valuable materials from end-of-life vehicles, which can be reused in the production of new components. This process helps reduce the need for virgin raw materials and cuts manufacturing costs, making it a cost-effective and environment-friendly alternative.
Others to Lead the Market (by Component Type)
The others category is expected to dominate the automotive circular economy market, driven by the increasing focus on circularity across various non-body automotive components. This includes critical systems such as interior parts, glass, plastics, tires, and electronics, which represent significant opportunities for recycling, remanufacturing, and reuse. These components play a crucial role in reducing waste and contributing to the sustainable lifecycle of vehicles.
As the automotive industry moves toward more sustainable practices, there is an increasing emphasis on reusing and recycling these components to minimize raw material extraction, cut down on production costs, and reduce environmental impact. Innovations in recycling technologies and remanufacturing processes are expected to expand the scope of these efforts, ensuring that a wider range of automotive parts can be reclaimed and repurposed.
Key Market Players and Competition Synopsis
The companies that are profiled in the automotive circular economy market have been selected based on inputs gathered from primary experts who have analyzed company coverage, product portfolio, and market penetration. Some of the prominent names in this market are:
- Umicore
- Sims Metal (Sims Limited)
- ZF Friedrichshafen AG
- BorgWarner
- LKQ Corporation
- Valeo
- Copart Inc.
- IAA Holdings, LLC.
- RB Global
- Renault Group
- BMW Group
- TOYOTA MOTOR CORPORATION.
- Redwood Materials Inc.
- Aptiv.
- Bosch GmbH
Recent Developments in the Automotive Circular Economy Market
- In February 2024, Sims Metal invested over $300,000 in an electric car flattener at its Providence site, which is expected to reduce CO2 emissions by 9.6 tons per year. This highlights the company's commitment to meeting local climate goals while advancing its sustainable practices.
- In February 2024, Copart, Inc. Middle East formed a strategic partnership with Madayn in Oman to address the issue of abandoned vehicles in industrial zones. This collaboration supports environmental sustainability by identifying and recovering abandoned vehicles for auction, ensuring proper disposal and reuse.
- In January 2024, Valeo launched the windshield-mounted remanufactured video camera in partnership with Stellantis. This product saves up to 99% of natural resources compared to new cameras and offers the same warranty and performance. Valeo's integration of the SUSTAINera label for circular economy parts highlights its leadership in sustainable automotive solutions, offering up to 80% savings in raw materials and 50% less CO2 emissions.
- In August 2023, LKQ Corporation completed the acquisition of Uni-Select, a leading distributor of automotive refinish and industrial coatings and related products. This acquisition expands LKQ Corporation's presence in the automotive aftermarket industry. By increasing its network, this acquisition strengthens LKQ Corporation's position in the automotive circular economy, especially in North America and the U.K.
- In 2022, ZF Friedrichshafen AG remanufactured over 5,500 products globally, avoiding CO2 emissions equivalent to 32,000 tons, showcasing its commitment to a sustainable future. With over 20 remanufacturing locations worldwide, ZF Friedrichshafen AG plays a pivotal role in industrial reprocessing.
How can this report add value to an organization?
Product/Innovation Strategy: The automotive circular economy market is segmented based on various applications, vehicle types, propulsion types, and product categories, providing valuable insights into the industry shift toward sustainability. The application segmentation includes a focus on vehicle components such as body parts, tires, batteries, and other key elements that are recycled, remanufactured, refurbished, and reused. By vehicle type, the market is divided into passenger vehicles and commercial vehicles, with the latter further segmented into light commercial vehicles, trucks, and buses. Propulsion types include internal combustion engine vehicles and electric vehicles, which are sub-categorized into hybrid electric vehicles, plug-in hybrid electric vehicles, and battery electric vehicles. The market is also analyzed by end-user type, including original equipment manufacturers (OEMs), the automotive aftermarket, and others.
Additionally, the market focuses on product types such as recycled, remanufactured, refurbished, and reused products. Key components in this circular economy include batteries, tires, polymers, body parts, and brakes and suspensions. As the automotive industry seeks to reduce waste and improve resource efficiency, these circular economy practices are becoming integral to achieving sustainability goals and driving growth in the market.
Growth/Marketing Strategy: The automotive circular economy market has been growing at a rapid pace. The market offers enormous opportunities for existing and emerging market players. Some of the strategies covered in this segment are mergers and acquisitions, product launches, partnerships and collaborations, business expansions, and investments. The strategies preferred by companies to maintain and strengthen their market position primarily include product development.
Competitive Strategy: The key players in the automotive circular economy market analyzed and profiled in the study include professionals with expertise in the automobile and automotive domains. Additionally, a comprehensive competitive landscape such as partnerships, agreements, and collaborations are expected to aid the reader in understanding the untapped revenue pockets in the market.
Key Attributes
| Report Attribute | Details |
| No. of Pages | 210 |
| Forecast Period | 2024-2034 |
| Estimated Market Value (USD) in 2024 | $153.63 Billion |
| Forecasted Market Value (USD) by 2034 | $455.33 Billion |
| Compound Annual Growth Rate | 11.4% |
| Regions Covered | Global |
Key Topics Covered
1 Markets
1.1 Trends: Current and Future Impact Assessment
1.1.1 Increasing Focus on Battery Recycling and Second Life Applications
1.1.2 Growth of Vehicle Remanufacturing
1.2 Supply Chain Overview
1.3 Regulatory Landscape
1.4 Impact Analysis for Key Global Events
1.4.1 Implementation of Stringent Environmental Regulations
1.4.2 Global Climate Agreements and ESG Initiatives
1.5 Market Dynamics Overview
1.5.1 Market Drivers
1.5.1.1 Stringent Government Regulations and Policies
1.5.1.2 Growing Corporate ESG and Sustainability Commitments
1.5.2 Market Restraints
1.5.2.1 Complex Supply Chains and Infrastructure Challenges
1.5.2.2 Inconsistent Global Regulations
1.5.3 Market Opportunities
1.5.3.1 Growing EV adoption Creating Substantial Opportunities in Repurposing Batteries
1.5.3.2 Expansion of Circular Supply Chains and Partnerships
1.6 Investment Landscape
1.7 Automotive Circular Economy Market Case Studies
1.8 Automotive Circular Economy Overview
1.8.1 Need for Circular Economy in the Automotive Industry
1.8.2 Sustainability and ESG Goals of Key Automotive Companies
1.8.3 Impact of Circular Economy on Various Automotive Lifecycle Stages
1.8.3.1 Manufacturing
1.8.3.2 Retail
1.8.3.3 Aftermarket
1.8.4 Impact of Automotive Circular Economy
1.8.4.1 Recycled Materials
1.8.4.2 Green Steel
1.8.4.3 Climate Neutral Vehicles
1.8.4.4 Sustainable Manufacturing Plants
1.8.4.5 Green Dealerships
1.8.4.6 Second-Life Batteries
2 Application
2.1 Application Segmentation
2.2 Application Summary
2.3 Automotive Circular Economy Market (by Vehicle Type)
2.3.1 Passenger Vehicles
2.3.2 Commercial Vehicles
2.3.3 Light Commercial Vehicles
2.3.3.1 Trucks
2.3.3.2 Buses
2.4 Automotive Circular Economy Market (by Propulsion Type)
2.4.1 Internal Combustion Engine Vehicles
2.4.2 Electric Vehicles
2.4.2.1 Hybrid Electric Vehicles
2.4.2.2 Plug-In Hybrid Electric Vehicles
2.4.2.3 Battery Electric Vehicles
2.5 Automotive Circular Economy Market (by End-User Type)
2.5.1 Original Equipment Manufacturers (OEMs)
2.5.2 Automotive Aftermarket
2.5.3 Others
3 Products
3.1 Product Segmentation
3.2 Product Summary
3.3 Automotive Circular Economy Market (by Process Type)
3.3.1 Recycled Products
3.3.2 Refurbished Products
3.3.3 Reused Products
3.4 Automotive Circular Economy Market (by Component Type)
3.4.1 Battery
3.4.2 Tire
3.4.3 Polymers
3.4.4 Body Parts
3.4.5 Brakes and Suspensions
3.4.6 Others
4 Regions
4.1 Regional Summary
4.2 North America
4.3 Europe
4.4 Asia-Pacific
4.5 Rest-of-the-World
5 Markets - Competitive Benchmarking and Company Profiles
5.1 Next Frontiers
5.2 Geographic Assessment
5.3 Recycling Companies
5.3.1 Umicore
5.3.2 Sims Metal (Sims Limited)
5.4 Remanufacturing
5.4.1 ZF Friedrichshafen AG
5.4.2 BorgWarner Inc.
5.5 Refurbishment Companies
5.5.1 LKQ Corporation
5.5.2 Valeo
5.6 Reuse Companies
5.6.1 Copart Inc.
5.6.2 IAA Holdings, LLC
5.6.3 RB Global
5.7 Integrated Circular Economy Solutions
5.7.1 Renault Group
5.7.2 BMW Group
5.7.3 TOYOTA MOTOR CORPORATION
5.8 Technology Providers
5.8.1 Redwood Materials Inc.
5.8.2 Aptiv
5.9 Parts and Components Suppliers
5.9.1 Bosch GmbH
5.9.2 Marelli Holdings Co., Ltd.
6 Research Methodology
6.1 Data Sources
6.1.1 Primary Data Sources
6.1.2 Secondary Data Sources
6.1.3 Data Triangulation
6.2 Market Estimation and Forecast
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