Digging for gold in scrap: inside Stellantis’ circular economy gambit

Of all the senior jobs created amid the current transformation of the automotive industry, the one held at Stellantis by Alison Jones sounds like the one with the most grit and the least glamour. As vice-president of Circular Economy, it’s Jones’s job to pull together myriad unsexy activities, such as used part sales, across the multinational giant's 14 brands (which include Alfa Romeo, Dodge, Fiat, Jeep, Peugeot and Vauxhall). Her task is to satisfy a tough environmental brief to reduce consumption of raw materials while also growing her two-year-old unit into a profitable business with a €2 billion (£1.7bn) revenue within the next six years. “This is a start-up environment within an established organisation,” Jones told the audience at our Autocar Great Women event last month. What the current revenue of the Circular Economy business is Stellantis won’t say, but for context, a similar operation within the Renault Group, called The Future is Neutral, turned over €800 million in 2022 and has a similar expansion goal of €2.3bn of revenue by 2030. In Stellantis, the business pulls together four strands that the company labels the four Rs: reman (remanufacture), repair, reuse and recycle. The business is almost all focused on parts, at least initially. While the global operation headed by Jones does recondition whole cars for resale (for example in Brazil, where they’re allowed to overhaul prototypes), only the service element of that is booked as revenue, not the sale of the reconditioned car. “The biggest [revenue] element is parts remanufacturing currently, and I think that will continue to be,” Jones told Autocar. The laudable idea is that the more parts are reused, the fewer materials will be needed to make new parts. Parts reconditioning has been going on for years, of course. For example, Renault’s engine refurbishment activities started all the way back in 1949. The difference now is that the environmental element has shifted front and centre, with Stellantis promising to halve the CO2 emitted per vehicle manufactured by 2030 and reach net carbon zero by 2038. Stellantis cars built from 2030 will also have 40% recycled or bio-sourced content, the company has promised. “It started because of our sustainability target,” said Jones. “It's also a profitable business.” Stellantis isn't a company famed for grand expenditures, so Circular Economy pulls together a network of partnerships with vehicle dismantlers, recyclers, resellers and reconditioning experts. Jones currently oversees just 200 employees. Last year, her company unveiled its biggest investment so far – the Sustainera Circular Economy Hub at the Mirafiori plant in Turin, Italy – as a location to strip old cars, recycle materials and retrieve usable parts. However, the investment stays true to the Stellantis spending ethos in that hub usefully fills space and employs workers in one Europe’s least utilised plants, making it a win politically as well as economically. Circular Economy will have 500 workers once the Mirafiori hub is up and running, Stellantis said. Renault’s The Future is Neutral has done something similar with the Flins plant in France. Stellantis is looking at adding additional hubs, Jones said, but so far hasn’t indicated where. “I have to make sure that I continue to be profitable while I'm making the transformations and the investments,” said Jones. Jones’s role as head of the unt is to make sure all the strands tie together as a coherent whole, encompassing sales, engineering and manufacturing. “I’m going in asking questions of people who’ve been doing it for years and years,” she said. For example, Circular Economy is now looking at parts that were previously considered unprofitable to repair but are now become viable. “Historically, reman has mainly been on engines, gearboxes, some alternators, callipers. But actually you can expand that product range,” Jones said. “Headlights are an example of where historically we've said no," she said – but as headlights become ever more complex, repairing the glass after a front-end collision now makes economic sense. “It's about finding either in-house engineers or working with suppliers who are prepared to invest the time to find a way to do it,” Jones said. The decision on which parts to focus on depends on the number of models using a particular part are still left on the road. A team of engineers in Europe or in Stellantis’s US R&D centre in Auburn Hills, Michigan, go through a list of parts, identifying potential candidates, checking specifications and talking to suppliers prepared to recondition old parts. Keeping used vehicles on the road by feeding the parts supply can only go so far. When a model becomes too old, the demand for parts dwindles, as does supply of parts to recondition. In the US, Stellantis will go back to the year 2000 for engines, but because you need two old engines to make one good reconditioned engine, you need a healthy supply. There’s still more to be done. Right now, only around 15% of the total parts and service catalogue are supplied by Stellantis’s Sustainera-branded reconditioned parts. The target is 40% by 2030. Parts taken off cars that don’t go through the reconditioning services come under ‘reuse’, and here Stellantis has set up a brand-agnostic e-commerce platform that links dismantlers with customers. Called B-Parts, it claims to offer seven million parts. Meanwhile, cars and parts beyond their useful life are a source of recycled materials. Last year, Stellantis and its partners recycled two million parts, a 84% increase on the year before. A dead car is of course a useful supply of steel – the material that Stellantis uses more of than anything else. Last year, the company bought 7.87 million tonnes of the metal, accounting for 75% of all its material consumption. Light alloys such as aluminium were next, at 1.02 million tonnes, accounting for 10%. Making sure recycled materials from scrapped Stellantis cars stay in the loop and return to their maker is one of Jones’s biggest challenges. “Many industries are looking at their own sustainability goals, so you’ve then got people competing for material,” she said. “That's the more difficult part.” Batteries are also on Jones’s radar, and Stellantis is looking to use its Ellesmere Port electric van plant in the UK to repair and remanufacture battery packs. The company is also working with French recycling Orano Batteries to extract valuable metals from non-viable packs. In the EU, new batteries will also need to include a percentage of recycled materials, accelerating the need to solve this part of the puzzle. Jones knows her job will be easier with tweaks to the designs of new cars, helping the recycling and reusing of parts down the line. “We've got a really small team that started to do that, having conversations with the designers and the engineers” she said. “Do you need 13 plastics in one part of the vehicle or could you do it with five? Do you need five different grades of aluminium?” The imperative to be lighter on the environment goes right to the CEO’s pay packet. Renault’s Luca de Meo has a portion of his payout “linked to the objective of making The Future is Neutral a pioneer in the circular economy”, while Carlos Tavares of Stellantis has a bonus linked to “the achievement of innovative milestones/goals” between 2021 and 2025, including “results within an aggressive timeline toward carbon-neutrality in mobility and technology”. If Jones can make both Stellantis and her outright boss richer by putting her Circular Economy unit on track for its €2bn revenue target, the applause will be ringing indeed.