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Automotive Industry
Stellantis will lift its 2030 revenue target for its recycling and reconditioning unit after its revenue grew 25% so far this year, CEO Carlos Tavares said, adding that the business would help make electric vehicles more affordable.
Rising prices and reduced availability of raw materials, as well as environmental costs to extract them, are pushing manufacturers and regulators to reuse and recycle more.
"We aim to set up a stable flow of supplies for raw materials ... avoiding market ups and downs. This means less inflation," Tavares said in Turin on November 23 as he inaugurated the automaker's first hub for its recycling and reconditioning business, now part of its 'circular economy' unit.
"Raw material inflation is a problem in electrification progression," he added.
As part of its long-term business plan, Stellantis has said it aims to generate €2 bn ($2.2 bn) in revenue by 2030 from its circular economy unit, by recycling and extending the life of parts, including EV batteries, and materials.
"The growth is strong," Tavares said, adding the potential for the business would have to be revised up, although he did not provide details about the new target. "What we are building here is a profitable business," he said.
Located in the Mirafiori complex in Turin, the new circular economy hub focuses on life extension for parts and vehicles, component reconditioning as well as recycling materials to return to the manufacturing loop.
The Mirafiori hub will process up to 25,000 cars per year, of which 15,000 refurbished and 10,000 disassembled cycle parts; it processes cars from all Stellantis brands.
The hub will start repairing EV batteries in early 2024, and plans to later start also recycling materials from batteries.
The Mirafiori site will be followed by similar hubs in other regions, starting from North America, followed by Latin America, Africa and Middle East.
The Mirafiori hub, in which Stellantis has invested €40 m, currently has 170 highly-trained employees, set to rise to around 550 by 2025. Its employees mostly come from within Stellantis' existing workforce in Italy, Tavares said.
A growing number of automakers that are increasingly recycling car components to bring in more revenue and reuse materials that are difficult to source. Renault is turning its Flins factory outside Paris into a research, recycling and repair center as part of its circular economy plan.