Stellantis Circular Economy Hub: Recycling, Repair, Reuse for Sustainable Profitability

2023-11-23 18:13:00

Recycling, repair, reuse: this is the range of actions that will be carried out in the new Stellantis circular economy hub in Turin, inaugurated this Thursday. In all, nearly 40 million euros of investment have been made in a complex which will employ 550 people by 2025. Thanks to this site, but also other Stellantis partnerships, notably Orano and the recycling of raw materials in batteries, the group hopes to generate 2 billion euros in turnover by 2030.

For comparison, Stellantis is targeting, overall in its strategic plan announced in March 2022, a net turnover of 300 billion euros by the same horizon. The circular economy therefore seems a drop in the bucket in the total revenue expected by the group, but “this is a real profitable business”, mentioned Carlos Tavares, the group’s general manager, during a press conference this followingnoon. The group is counting on this hub in its carbon neutrality strategy by 2038.

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Raw materials, generators of economy

Concretely, the circular economy hub will allow the destruction of cars at the end of their life cycle and the reuse of spare parts. The objective: to dismantle, clean and recondition more than 50,000 remanufactured spare parts – including engines, gearboxes and even batteries – by 2025 and 150,000 parts by 2030. The center will also sort more 2.5 million used parts which will be used to supply recycling activities by 2025 and 8 million for 2030.

Stellantis will win on several counts. On the one hand, the group counts on the savings made in the supply of raw materials. According to Carlos Tavares, the volatility of the prices of critical metals is the main cause of the high cost of electric batteries and, at the same time, that of cars. When asked by a journalist regarding the risk of competitiveness of recycled batteries compared to new ones depending on the evolution of metal prices, the manager cut it short:

“I doubt that the price of new raw materials will be lower than that of recycled raw materials, unless there are no more electric vehicles sold. In this case, we will resell the recycled materials elsewhere. »

On the other hand, the recycling and reuse of car parts also allows Stellantis to regain control of the following-sales part of vehicles as well as maintenance services.

The circular economy will also be necessary to manage the risk of lack of supply of critical metals as well as associated geopolitical issues. Other manufacturers are entering this race, such as Renault and its entity The Future is neutralwith a revenue generated target similar to Stellantis, at 2.3 billion euros by 2030.

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Three other hubs will follow

Carlos Tavares also made a point of recalling the 40% additional production cost of electric cars compared to their thermal counterparts. “ We will be forced to digest this part if we do not want to pass it on to the middle classrecalled Carlos Tavares. Remanufactured parts will also reduce vehicle maintenance costs and, thus, avoid purchasing a new vehicle if the engine is broken, for example. »

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Stellantis plans to open other circular economy hubs in the future, in order to limit the logistical costs of reused parts. After Italy, which opens the way for Europe, the group is considering three other sites: one in North America, one in South America and a final one in the Middle East.

If the future Hubs will open up jobs, the director of Stellantis still confirmed possible job cuts to amortize the cost of electric vehicles and be competitive with Chinese manufacturers. Carlos Tavares also showed his concern regarding upcoming elections in Europe and the United States, which might disrupt his electric roadmap.

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