Circular Economy In Automotive Market to hit US$ 75.26 billion by 2032, Europe led 38% of global market share | Key Players:- Renault Group, BMW Group, Stellantis N.V., Toyota Motor Corporation.

Circular Economy In Automotive Market reached US$ 30.68 billion in 2024 and is expected to reach US$ 75.26 billion by 2032, growing with a CAGR of 11.87% during the forecast period 2025-2032.

The transition to electric cars (EVs), especially battery electric vehicles (BEVs), is profoundly altering the automotive industry. Although BEVs reduce direct emissions, the overall environmental consequences of car production, utilization, and disposal remain significant. Principles of the circular economy are progressively adopted to mitigate this deficiency by advocating for design focused on durability, reuse, remanufacturing, and closed-loop recycling.

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Key Industry Development-
✅ [Month 2025]: [OEM/tier‐1] announces a new closed‐loop program for high‐value materials (e.g., aluminum, steel, batteries) in its US plants, integrating take‐back of end‐of‐life vehicles and using secondary materials in new models to reduce lifecycle emissions and raw‐material dependency.

✅ [Month 2025]: A major US automaker or recycler launches a remanufacturing line for key components (e‐motors, batteries, transmissions) supplying both OEM service networks and independent aftermarket, with traceability via digital IDs and an explicit circularity KPI set.

✅ [Month 2025]: A leading Japanese OEM expands a closed‐loop battery or traction motor recycling program, recovering critical minerals (lithium, nickel, cobalt, rare earths) from hybrids/EVs and feeding them into new battery or e‐axle production.

✅ [Month 2025]: Major Japanese automaker or supplier scales remanufacturing of engines, transmissions, or e‐drive systems for domestic and export markets, explicitly positioning this as part of its circular‐economy and carbon‐neutrality roadmap.

✅ [Month 2025]: Launch of a vehicle line, trim, or component range marketed on recycled‐content credentials (e.g., interior plastics, seat fabrics, aluminum body panels) supported by third‐party certification of recycled material share and associated CO2 savings.

✅ [Month 2025]: Introduction of a digital platform or app for customers to return end‐of‐life vehicles, batteries, or parts into OEM‐controlled loops, with incentives such as trade‐in bonuses, extended warranties, or certified remanufactured parts.

Recent M&A Updates:-
→ Circulor raised $10 million in a funding round (January 2025). This investment was aimed at enhancing their blockchain-powered software used by automotive companies like Volvo and Daimler to trace materials (like cobalt and mica) through complex supply chains, ensuring ethical sourcing and supporting the circular economy model by tracking materials from extraction to recycling.

→ Stellantis formed a joint venture with three partners to boost recycled material use (Early 2025). While not a typical acquisition, Stellantis established a joint venture to integrate sustainable materials and increase the use of recycled content in its vehicles, a move critical to the automotive circular economy.

→ BMW Group increased its investments in circularity startups (2025). The company focused on investing in startups developing innovative solutions for recycling materials, such as plastics and batteries, indicating a trend toward strategic partnerships and investments over traditional M&A activities in this sector.


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Market Segment Analysis
→ By vehicle type
In most published studies, passenger vehicles account for the largest share of circular economy value in automotive, usually around half of total revenues, because of their very high parc, and strong OEM and regulatory focus on sustainable mobility. Commercial vehicles and light commercial vehicles together tend to absorb most of the remaining value (roughly the other half), reflecting intensive use, higher lifecycle mileage, and an increasing focus on remanufacturing, parts reuse, and recycling in fleets and logistics.​

→ By process
Across circular processes, material and component recycling plus remanufacturing typically dominate, often representing a clear majority of the market, because they are already industrialized and supported by regulation and established value chains. Refurbished and reused products (including life‐extension services and reuse‐oriented design) make up a smaller but fast‐growing share as OEMs, suppliers, and recyclers scale take‐back programs, eco‐design, and product‐life‐extension models under circular economy roadmaps.​

→ By components
On the component side, batteries and high‐value powertrain parts capture a large and rapidly increasing share, driven by electric vehicle battery collection, second‐life use, and recycling initiatives. Tyres, polymers, body parts, brakes, suspensions, and other metal components collectively hold the remainder, reflecting well‐established material recycling streams (e.g., steel, plastics, rubber) and expanding remanufacturing and refurbishment programs for safety‐critical and large structural parts.

Regional insights:-

• Europe: 38% share - Europe leads the automotive circular-economy market globally, thanks to strong regulatory frameworks (e.g. end-of-life vehicle directives), high adoption of recycling / remanufacturing infrastructure among OEMs and aftermarket, and growing demand for sustainable mobility.

• North America: 25-30% share - North America holds a significant portion of the market, with the U.S. and Canada investing heavily in circular supply chains, remanufactured/recycled vehicle parts, EV battery recycling, and policies encouraging sustainable manufacturing methods.

• Asia-Pacific: 20-25% share - The region is gaining ground quickly, driven by rising vehicle ownership, expanding automotive manufacturing, growing awareness of sustainability, and government support for recycling, reuse, and circular production systems in major automotive markets like China, Japan, India, South Korea.

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Circular Economy In Automotive Market Major Players:-
→ The major global players in the market include Renault Group, BMW Group, Stellantis N.V., Toyota Motor Corporation, Ford Motor Company, Volkswagen Group, Volvo Cars, Northvolt AB, General Motors, and Hyundai Motor Group.

Key Developments:-
→ For instance, in June 2024, UNDP and Sitra, the Finnish Innovation Fund, signed a Memorandum of Understanding to accelerate the 2030 Agenda by promoting circular economy approaches and supporting countries in their transition to green economies. Formalized during the 67th Global Environment Facility Council Meeting, this partnership aimed to provide integrated policy support, foster enhanced cooperation, and expand collaboration across various sectors to advance circular economy goals, leveraging insights from initiatives such as the World Circular Economy Forum.

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