PARIS: Renault SA is joining a growing field of carmakers with a push to boost recycling of used car parts and materials in a bid to meet tightening regulation and reduce reliance on increasingly scarce commodities.
The French automaker is setting up a separate entity, dubbed Future of Neutral that’s targeting sales of more than €2.3 billion and an operating margin exceeding 10% by 2030, Renault said Thursday.
Renault is also seeking external investors to co-finance spending plans of around €500 million.
"Faced with the climate challenge, new regulatory requirements and increasing pressure on resources” the unit’s mission is to offer closed-loop recycling solutions to the industry, chief executive officer 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.”
Carmakers are under pressure to make better use of existing resources as they navigate supply-chain constraints, sky-rocketing energy prices and geopolitical tensions that are starting to limit access to raw-material supplies, such as from Russia.
The industry’s transition to EVs, with vast requirement of cobalt, lithium and nickel to make batteries, is fueling concerns about price spikes as demand surges.
Renault rival Stellantis NV, the maker of Jeep SUVs and Peugeot cars, outlined its own recycling plans earlier this week with a revenue target of €2 billion annually by 2030.
Under Renault’s plans, a number of existing assets such as the Gaia unit, which repairs batteries, and the Flins factory that retrofits vehicles, will be folded into the new entity.