PARIS -- Renault is joining a growing field of automakers that are increasingly recycling car components to bring in more revenue and reuse materials that are difficult to source.
The automaker is setting up a new entity that’s targeting sales of more than €2.3 billion ($2.2 billion) and a more than 10 percent operating margin by 2030.
Renault also said Thursday that it’s seeking external investors to co-finance around €500 million of spending it has planned.
“Faced with the climate challenge, new regulatory requirements and increasing pressure on resources,” the mission is to offer closed-loop recycling solutions to the industry, CEO Luca de Meo said in a statement. “Our ambition is to bring recycling into a new era and become the European leader in the automotive circular economy.”
Renault plans to fold a number of existing assets into the new entity called The Future is NEUTRAL, including the Gaia unit that repairs batteries in its Flins factory that retrofits vehicles in northern France.
Jean-Philippe Bahuaud, CEO of The Future Is NEUTRAL, said the more than 11 million vehicles that reach the end of their life in Europe every year can be used to achieve a much higher rate of recycled automotive materials in the production of new cars.
"In the automotive sector, the first under-exploited resource is the car itself, which is made up of more than 85 percent of metals and plastics," he said in a statement.
New vehicles are made up of only 20-30 percent of recycled material, from all industries, Renault said.
Carmakers are under pressure to make better use of resources as they navigate strained supply chains, sky-rocketing energy prices and geopolitical tensions that are limiting access to raw materials. Making batteries for electric vehicles will require sourcing vast amounts of metals that have seen prices spike as demand soars.
Renault rival Stellantis, the maker of Jeep SUVs and Peugeot cars, outlined its own recycling plans earlier this week and is targeting €2 billion revenue annually by 2030.
De Meo didn’t rule out the possibility that Renault’s alliance partner Nissan may invest in the new entity. Wider talks between the companies on the French carmaker’s EV carve-out plan and a possible rebalancing of their decades-old alliance are ongoing and proceeding well, he told reporters.
While the talks are “complex,” de Meo said he’s optimistic an agreement may be found with Nissan on various projects in the coming weeks.
