Stelantis is expanding its partnership with a metal recycling company Galloo to focus on developing its circular economy and increasing its revenue in this space, while also securing key material supplies.
The automaker aims to generate more than €2 billion (AU$3.23 billion) from recycling and parts revenue by 2030.
The two companies have signed a Memorandum of Understanding and will hold negotiations on Stellantis’ use of Galloo’s extensive mixed-materials recycling process to expand end-of-life vehicle (ELV) recycling capabilities.
Expanding the circular economy Stellantis will involve collecting ELVs from end owners to recover parts that will be used in remanufacturing or for recycling.
The partnership, which originally started between Peugeot and Citroen’s Galloo and Stellantis brands, will now serve the entire parent company.
Stellantis has confirmed that it will also offer ELV recycling services to other interested automakers once operational.
The joint venture is still subject to closing legal steps and regulatory approvals but is expected to start serving European customers by the end of 2023, starting with France, Belgium and Luxembourg.
Expansion across Europe and the UK is expected to follow soon.
Stellantis did not comment on the possibility of a similar program being launched in its overseas markets such as Australia and the US, saying only that it would “rapidly develop”.
“Making it easy for customers to recycle their End-of-Life Vehicles is a key element to reducing the environmental impact of our vehicles,” said Stellantis’ Senior Vice President of Global Circular Economy, Alison Jones.
In addition to pushing Stellantis towards its goal of becoming a net zero carbon company by 2038, the program will help preserve valuable parts and resources in the company’s value chain.
“If we can be in that value chain, it is value to Stellantis. It also gives us access to ensure that if materials become scarce, we are in that value chain; steel, aluminum, even copper, and other rare materials found in batteries,” said Ms. Jones Auto Express.
“We need to be in that value chain to make sure we can get that scarce material.”
Ms Jones also explained that existing and upcoming regulations around the world regarding the need for carmakers to address vehicle lifecycles have contributed to the partnership.
Stellantis has set a target of 40 percent of all materials to be ‘green’ in new vehicles by 2030, which will be supported by increased access to raw materials as a result of shredding and post-treatment processes provided by Galloo.
Stellantis claims the program will also improve its financial performance in the sector, increasing recycling revenue 10-fold and division revenue four-fold by 2030 compared to 2021.
The parent company of brands such as Alfa Romeo, Fiat, and Jeep has predicted its net income will double by 2030 to more than €300 billion (AU$485.5 billion) by 2030 thanks to its Dare Forward 2030 plan.