Removing the finish line

The automotive industry spawned a new wave of manufacturing in the twentieth century: assembly line innovation, lean manufacturing, robotics, automation, and safety. But times change, and so must the automotive industry. It is clear the traditional linear model is no longer viable.

Sustainability imperatives are pushing automakers to deliver net-zero strategies in their production and manufacturing processes and to electrify their parks. The industry already experienced multiple disruptions in its supply chains (e.g., semiconductor crisis) but the urgent need to produce batteries at scale is going to exacerbate those issues on material sourcing such as cobalt, lithium, or nickel. However, beyond carbon, resources represent another battle that deserves its own attention, especially as it becomes a matter of sovereignty. Fortunately, the circular economy is rapidly becoming the next standard for greater control of materials’ value chains.

But that’s not all.

By inserting end-of-life products into a new cycle, OEMs can prolong the value of products, materials, and resources. As such, circular economic principles add and preserve more value than traditional manufacturing models. OEMs have all the ingredients needed to succeed in this new era. But they must make broad changes to their operations, adopt new partnership models within and across industries, and act now to overtake their competition.