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Automotive Circular Economy Market is Estimated to Reach $455.33 Billion by 2034

16 Jun 2025

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What is an Automotive Circular Economy and Why Does It Matter?

The automotive circular economy focuses on recycling, remanufacturing, and reusing vehicle components to reduce waste and maximize resource efficiency. It matters because it lowers environmental impact, conserves resource, reduces production costs, supports sustainability, and helps automakers comply with stricter regulations.

According to BIS Research, global automotive circular economy is projected to reach $455.33 billion by 2034 from $153.63 billion in 2024, growing at a CAGR of 11.48%,

What’s Driving Growth in the Automotive Circular Economy Market?

Key Drivers:

•    Regulatory Pressure: EU's End-of-Life Vehicles Directive and China's EV mandates promote sustainable practices.
•    Industry Response: Automakers like Renault, BMW, and Nissan adopt circular economic principles.
•    Compliance Focus: Regulations drive the shift towards recycling, waste reduction, and resource efficiency.

What Are the Challenges in the Automotive Circular Economy Market?

Key Challenges:

•    Complex Supply Chains: Global networks complicate recycling and traceability, especially for hazardous materials.
•    Infrastructure Gaps: Limited recycling infrastructure, particularly in emerging markets.
•    Industry Response: Automakers invest in recycling hubs, partnerships, and advanced technologies.

What Are the Recent Developments in the Automotive Circular Economy Market?

•    Feb 2024 – Sims Metal: Invested $300K in EV flattener, cutting CO2 emissions by 9.6 tons annually to support local climate goals.
•    Feb 2024 – Copart & Madayn: Partnered to recover abandoned vehicles in Oman, promoting environmental sustainability through reuse and auction.
•    Jan 2024 – Valeo & Stellantis: Launched remanufactured camera with 99% resource savings under SUSTAINera label, cutting CO2 by 50%.
•    Aug 2023 – LKQ: Acquired Uni-Select to expand aftermarket reach and strengthen circular economy presence in North America and the U.K.
•    2022 – ZF Friedrichshafen: Remanufactured 5,500+ products, avoiding 32,000 tons of CO2 via 20+ global reprocessing facilities.

Market Segmentation: Where Are Growth Opportunities?

By Vehicle Type
Passenger Vehicles, Commercial Vehicles and Light Commercial Vehicles

By Propulsion Type:
Internal Combustion Engine Vehicles and Electric Vehicles

By End- User Type:
Original Equipment Manufacturers (OEMs), Automotive Aftermarket and Others

By Process Type:
Recycled Products, Remanufactured Products, Refurbished Products and Reused Products

By Component Type: 
Battery, Tire, Polymers, Body Part, Brakes and Suspensions and Others

By Region:
North America, Europe, Asia-Pacific, Latin America and Middle East and Africa

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Analyst Perspective: What’s Next for the Automotive Circular Economy?

The global automotive circular economy market is set for significant growth, driven by rising demand for sustainable, cost-effective vehicle maintenance and parts replacement. Key factors include the adoption of remanufacturing, recycling, and reusing parts, along with efforts to extend vehicle lifecycles and reduce environmental impact.

-BIS Research Analyst Team

FAQs About the Automotive Circular Economy Market

What is the expected growth rate of the automotive circular economy market?

The automotive circular economy market is expected to grow at a CAGR of 11.48% from 2024–2034.

Who are the key players?

Leading companies driving the automotive circular economy include Umicore, ZF Friedrichshafen AG, LKQ Corporation, BorgWarner Inc., and others.

Which technologies are most in demand?

The market is witnessing a surge in demand for technologies such as advanced recycling processes, remanufacturing techniques, refurbishment methods, and innovative reuse strategies.

Want to Make Data Backed Moves in Automotive Circular Economy?

BIS Research offers KOL-based insights, rigorous segmentation, and strategic advisory across software, hardware, and sensing tech domains.

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