Riding the wave of change in the automotive industry with circular economy

It’s an exciting time for the automotive industry. Technology is challenging it as well as a significant change in consumers attitude and the pressing problem of climate change, the waste crisis and the skyrocketing of the prices of raw materials. All these problems are calling for a profound shift in the mindset of the industry at all levels of the value chain. This article wraps up the situation looking at how things are rapidly changing and how car manufacturers are adapting.

Image for post
Image for post
Photo: Raphael Biscaldi, Unsplash

“In the Netherlands, it seems to be a good sign that over two hundred thousand cars are 95% recycled on an annual basis. However, this figure is based almost entirely on the weight of recycled steel. The remaining fraction, consisting of plastics and composites used for e.g. dashboards and floor mats, is mostly downcycled and often “thermally” recycled — in other words, burned.”

Another issue affecting the industry is the use, or better, the limited use of cars. According to Peter Lacy and Jakob Rutqvist “$7 trillion worth of passenger cars are unused around the world at any given point in time”. Others use the figure of 90 per cent of the time that cars spend sitting in driveways or parking lots. The trend is already set: private ownership of cars will eventually disappear, and cars will be more and more owned by manufacturers in the next ten years. This could take us in the future to the situation of having less cars sold but a greater involvement of the manufacturers in the service and in cooperation within the value chain.

Alternative ownership models

A good fit with the circular economy is alternative ownership models. This solution includes car sharing and ride sharing that maximize the usage of the car and offer a solution to the fact that cars are parked for 90 per cent of their time. Another model is the “product as a service” one, where cars belong to the manufacturer but are given to customers based on a leasing offer.

“The four goddesses that govern this realm are Goddess of Nature: Sustainability, Goddess of Health: Wellness, Goddess of Experience: Experientialism and Goddess of Simplicity: Minimalism. The emerging millennial customer today is looking for meaning in the way he or she spends his or her money. By touching brands with their wallets, the consumer identifies with the values for which each brand fervently stands.”

Moreover, another study by Circle Economy estimates that car owners of 18–35 years of age are increasingly concerned about growing costs of owning a car and are 40% more likely to abandon their vehicles.

Circular supply chain and reverse logistics

This, more than a single solution, is a whole set of different options that involve a supply chain that is quite large and has many subjects involved. The idea is to keep raw materials in the production loop as much as possible by using recycled and recyclable materials and innovative and efficient recycling technologies. Part of this is the development of a design for disassembly and recovery philosophy. Considering that cars that are bought now will remain in use for 10 to 20 years, this means that design is the first place to start to be sure that in 20 years we will be able to recover almost all the components of a car and reuse them according to the principles of the circular economy.

Designing with low tech solutions before the high-tech ones

If you think about it, it’s no easy task to design something keeping in mind its end-of-life. It’s like planning the funeral service before even thinking about the baptism or the wedding! But this is the task that new design thinking has in the industry. The use phase is critical, but so is the “waste phase”.

“Technological sustainability is quantitative and relies on doing the same things more efficiently, whereas ecological sustainability is qualitative and requires a fundamentally new way of doing things.” David Orr, Environmental Educator.

There is a great number of high-tech solutions that are coming to the market thanks to new technologies and digital tools. Among them are machine to machine communication, analytics, AI and modular design. But before getting to these, as Lance Hosey says in his Shape of Green, there are many things that are possible to do in low tech design by optimizing the design of cars. Lace Hosey uses the quote by Bill Gross, Aptera’s founder: “If a plane looked more like an SUV, it wouldn’t take off. Dolphins don’t look like SUV for a reason. Cars need to look like dolphins, not SUVs”.

“Designers and entrepreneurs tend to be familiar with designing for an end user,” he says. “Effective circular design looks beyond a single product lifecycle for a single user, to designing a bigger system–one that creates more value by enabling multiple usages and users of that material.”

Product lifetime extension

It’s a basic rule in sustainability: the shorter the lifespan of a product, the more wasteful it is. So, longer life means lower waste. With this in mind, Tesla developed a Life Extension circular model using their Tesla charger stations. The brand offers an eight-year, unlimited battery and drive unit warranty further strengthening the bond with their customers and the lifetime of the product.

Image for post
Image for post
Photo by Patrick Baum on Unsplash

Written by

Recycling? Yes, and further! We regenerate nylon waste into new materials for brand new products. Download our sustainable design ebook http://bit.ly/2rzwzLj

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store