The circular economy could forever change how cars are made – here’s how

Embracing the circular economy has become even more critical since COVID-19 has hit economies hard, putting pressure on consumers and manufacturers and driving home the need to be watchful of resources. In fact, one recent survey of supply chain professionals found that 51% expect the focus on circular economy strategies to increase over the next two years. Those surveyed from large companies (with revenues of more than $25 billion or more) had more optimism for this growth in the circular economy than mid-size organizations, perhaps signaling the opportunity for organizations with both resources and appetite for risk. Transitioning away from the ‘linear economy’ means systems-wide changes, including decarbonizing production and designing products for recyclability at ‘end of life’. For the automobile industry, it means achieving transformation at the scale of Henry Ford’s legendary assembly line, or Toyota’s famous ‘Just In Time’ production system, one that timed manufacturing to dealer orders to minimize parts inventory.

Since its inception, the automotive industry has led both process revolutions and technological innovation. As the industry adopts the technologies of tomorrow, it is poised to once again create a template for the global economy to reference and follow. The Circular Cars Initiative (CCI) embodies this ambition for the auto industry. It represents a coalition of more than 60 automakers, suppliers, research institutions, NGOs and international organizations committed to realizing this near-term ambition. A new series of circularity “roadmaps”, developed in collaboration with the World Economic Forum, the World Business Council for Sustainable Development (WBCSD), McKinsey & Co. and Accenture Strategy, explain the specifics of this transition.

The CCI, and its 60 partners, developed three framework reports to help industry and regulators better understand this new, more sustainable future. Through this model, according to research by Accenture, the global economy can maintain standards of living and offer mobility means to serve the expected doubling of the global passenger demand by 2050. It can also reduce related natural resource consumption by up to 80% and carbon emissions per passenger by 75%.

Source: World Economic Forum