RESEARCH REPORT

In brief

In brief

  • Circular economy approaches can help the automotive industry reduce the lifecycle carbon emissions per passenger km by up to 75% by 2030.
  • It will take holistic measures to change the business models of automotive manufacturing to jointly drive transformative solutions.
  • Optimizing in silos is no longer an option: Accenture and the World Economic Forum are proposing a five-level taxonomy towards the circular car.


Reimagining the value chain for a better future

The automotive industry is dramatically overshooting its estimated carbon and resource budgets. At the same time, car-based mobility is set to grow globally by around 70% by 2030 (passenger kilometers, as well as predicted vehicle stock in a business-as-usual use scenario). This is happening at a time when estimations show that mobility emissions need to decrease by around 50% within 10 years (2030) to achieve a 1.5°C climate scenario.

The need to realign towards automotive circularity. Displaying linear development levels up to 2030 and the reduction potential of the circular scenario.

Automotive manufacturers have already set ambitious targets towards carbon neutrality in the next three decades and aligned their business strategies with an ever-accelerating push for electrifying the product portfolio. As we move towards a tipping point for electric vehicle adoption, it becomes clear that it will take more than getting rid of the combustion engine to get the job done: leveraging circular economy strategies for transforming the product, as well as the way it is used, will be the second piece of the puzzle towards net zero. To kickstart the transformation, a common language is needed along the value chain to guide an gauge progress. Thus, Accenture and the World Economic Forum are proposing a five-level taxonomy towards the circular car:

Five levels of automotive circularity. Levels are displayed from the past through 2035.

Transformation pathways for the industry

Already today, most automotive materials are recyclable. Cars are built to last and to be repaired. These are all important aspects of circularity. But the industry must go further. Slowly but surely, we are already witnessing a shift away from traditional business models focused on production and sales: cars are increasingly bought online and flexibly “subscribed” to for shorter time periods, revenue streams are shifting towards the use phase and circularity is slowly picking up speed. Members of the automobility ecosystem need to raise their ambition and, with the support of policymakers, build a new automobility ecosystem that seeks not merely to do less harm but rather to enable a bright new world of possibilities. The value chain needs to be fundamentally reimagined to minimize lifetime carbon emissions and resource consumption. We propose four transformation pathways, supported by closely interlinked solutions:

Energy decarbonization

A complete shift to renewable energy sources in the production and use phase.

Materials circularity

Achieving 100% circular material content (recycled or renewable materials) and end-of-life processing (“same level” recycling).

Lifetime optimization

Extending vehicle and component lifetimes.

Utilization improvement

Drastically improving the use of available capacity.

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