Luxury automakers like Volvo, Mercedes-Benz, and Jaguar Land Rover are launching circular economy initiatives to use recycled materials in car production.
Jaguar Land Rover has generated over £100 million by reusing industrial hardware in its EV plants, enhancing profitability and supply chain resilience.
The EU is finalizing regulations requiring car manufacturers to use more recycled content, including a mandate for 20% recycled plastic in new vehicles within six years.
Automakers are turning regulatory challenges into branding and operational advantages by building expertise in circular economy practices.
Luxury automakers including Volvo, Mercedes-Benz, and Jaguar Land Rover are launching major circular economy initiatives, turning old steel, used tires, and factory robots into key parts of their next-generation cars. The push comes as the companies scramble to build sustainable supply chains ahead of sweeping new EU regulations designed to mandate exactly these kinds of practices.
Metal, rubber, and protein: Volvo is turning to recycled steel from Swedish firm SSAB for its future cars, a first for any automaker in serial production. The near-zero emissions material will go into its upcoming electric EX60 SUV, taking aim at a major polluter, as steelmaking accounts for roughly 11% of global greenhouse gas output. Meanwhile, Mercedes-Benz is creating a new bio-based leather alternative by chemically recycling old race car tires into a material made from proteins and biopolymers.
The profitable pivot: Jaguar Land Rover is proving that reuse pays off, generating over £100 million in value by redeploying its industrial hardware. The company is giving hundreds of factory robots and entire production lines a second life in its EV plants. It’s a move that “improves profitability and increases supply chain resilience,” according to JLR’s Chief Sustainability Officer, Andrea Debbane.
Europe’s new rulebook: This flurry of activity isn’t happening in a vacuum. The EU is finalizing rules that would force manufacturers to design cars for easy disassembly and use more recycled content, including a mandate for at least 20% recycled plastic in new vehicles within six years. Co-rapporteurs on the legislation called the plan a “feasible” compromise, with a full parliamentary vote expected in September.
The takeaway: Carmakers are proactively building expertise and supply chains for a circular economy, turning what will soon be a regulatory headache into a potential branding and operational advantage.
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The wider view: The auto industry’s sustainability push includes some creative uses for waste, with Ford developing car parts from leftover olive pulp. The trend toward sustainable interiors is also growing, as BMW and Volkswagen are investing heavily in plant-based materials. Beyond the factory, JLR is finding ways to give old EV batteries a second life as portable energy storage units.
