For much of the last century, the automotive industry has been the antagonist in the climate change story. Recently, however, perceptions have begun to change, with the industry investing huge amounts of money in electric vehicles, driven by a global demand for sustainable mobility. Electric vehicles are not the final step though. For the automotive industry to be truly sustainable, it needs to adopt circular economy principles, says Systemiq’s Tilmann Vahle.
How do you define the circular economy?
“A circular economy is a system which aims to minimize waste by making the most of the resources and materials used.” says Tilman. “In a circular system, you’re not linearly making, using, and disposing of materials and products. Instead you’re designing them for easy repair and reuse.” According to Tilman, this isn’t just about recycling per se. “You want to start right at the beginning and look at how you design your products and services in order to make sure they can be broken down and reused again in their entirety. This is better for the environment as fewer raw materials are ultimately required. It also generates the most economic value from your investments. That’s what true circularity is all about.”
How can the automotive sector ‘go circular’?
The main way the industry can become more circular is for OEMs to design vehicles so that their parts can be completely reused at the end of their lifecycles. Renault, for example, is working closely with its suppliers to develop the next generation of circular components to be used throughout its vehicles. “Put simply, we need to design vehicles that don’t just last longer, but that can be completely broken down, reused and remanufactured,” says Tilmann.
Where does the car leasing sector fit in?
Over half the vehicles on the road are owned by companies, which means that fleet managers have a huge and growing role in the development of the automotive circular economy. Tilmann: “The more visibility we can have on how the cars in your fleet perform and are used, the better able we will be to predict how long an asset will last and the corresponding flow of materials required. This is important data required for managing materials in the automotive circular economy loop.”
What role can fleet managers play?
For the circular economy to become a reality in the automotive industry, every stakeholder will need to contribute, says Tilmann. “It’s not just about the OEMs. Fleet managers also have a really important role to play. They have the buying power to sway what materials the OEMs are using in their vehicles, as well as the access to the end customer to educate them on how sustainable — or not — their vehicle is. In that sense, the power of the big fleet managers is absolutely crucial to making the automotive circular economy a reality. We hope they will rise to the challenge and make use of their power in the industry, especially as the issue will likely also align with their organization’s sustainability ambitions and strategies.”