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Mobility’s Circular Economy Potential

Eric Hannon IARC
Eric Hannon

 

In less than two weeks time this year’s IARC takes place in Vienna; an opportunity to exchange the latest news and ideas with experts from all areas of the automobile recycling industry. So far, over 200 participants from 25 countries have registered for the event.

This year, an interesting and diverse program has been put together for visitors and one of the keynote speakers, Eric Hannon from McKinsey & Company, Inc. in Germany will be talking on the topic of ‘Mobility’s Circular Economy Potential’. ICM had an opportunity to talk to him before the conference:

Mr Hannon, at the IARC 2019 you will be talking on the topic of “Mobility’s Circular Economy Potential”. The title of your presentation suggests that the potential of the circular economy in the mobility sector is far from exhausted. Are we right on that point?

Over the last few years, the automotive industry has made a great deal of progress in terms of sustainability. Cars are among the most recycled products worldwide and the recycling rate in Germany is over 90%. However, we still have a long way to go to achieve a genuinely circular economy, as it involves a whole lot more than just recycling. In fact, it means changing the entire process chain, including product development, business models and supply chains, to take sustainability into account.

In which field of mobility do you see the greatest potential for the circular economy?

Four mega-trends are currently impacting the car industry, the so-called ACES: autonomous driving, connectivity, e-mobility and shared mobility. The fundamental changes that accompany these technologies offer us the opportunity for a further revolution, namely the circular economy, as we could actively rethink the way we do things when it comes to new products such as e-cars, but also new business models like car sharing or robotaxis.

How important do you think the topic of circular economy is for carmakers?

We have already seen in many other industries that the transition from focusing purely on products to a more strongly service-based business model has a great deal of commercial potential. To take an example from the automotive industry, carmakers currently earn around one cent per mile (1.6 km) on the cars they sell, calculated over each vehicle’s life cycle. However, with robotaxis the figure could rise to between 10 and 25 cents and the existing assets, i.e. the vehicles themselves, could be used far more efficiently

Do you know of any best-practise examples that show how the circular economy can be ideally implemented in the field of mobility?

As mentioned in that example, mobility services are a good way to use cars for longer and more efficiently. That is one of the key principles of the circular economy. However, we are still only just beginning and so far the circular economy has not been fully implemented. For example, products need to be comprehensively rethought at the design stage, right from the outset, to make them suitable for the circular economy.

In the carmaking industry, electric drivetrains are considered the way forward. Apart from the lithium-ion battery, which other challenges does electric mobility pose for the circular economy?

Generally speaking, e-mobility creates a lot more potential for the circular economy than it does problems. With around 90% effectiveness, an electric motor, for example, is incredibly efficient in comparison to a combustion engine. Batteries, for example, already provide a promising opportunity for designing a completely circular system – from design to the end-of-life stage. Circular economy concepts are being far more systematically considered in the field of e-mobility than was ever the case with combustion engines.

If you want to find out more about this topic and lots of others, too, please head along to IARC 2019 in Vienna. For all the details on the program and how to register, go to: www.icm.ch/iarc-2019

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