Volkswagen Group Invests €900 Million to Boost Auto Parts and Material Recycling

On January 27, according to Zhuan Su Shi Jie, the Volkswagen Group will invest approximately 90 million euros to transform its Zwickau plant into the group's core hub for circular economy business, with part of the funding provided by the Saxon state government.

This project will establish a new end-of-life vehicle dismantling center, primarily for material recovery and parts reuse. The factory's processing capacity will gradually increase, with a target of dismantling 15,000 vehicles annually by 2030. In 2025, it will initially process approximately 500 trial assembly and test vehicles.

In the initial phase, the focus will be on developing, testing, and validating dismantling processes, which will set industry standards for rollout across Volkswagen Group's global production network. Reusable components identified during testing will be reintegrated into the Group's value chain, including applications such as used car repairs.

Another key focus is the material separation of parts that can no longer be reused, in order to create pure recycled material streams.

"In the coming years, the importance of the circular economy for the general public will continue to increase," stated Andreas Wahling, Head of Circular Economy at Volkswagen Group. "This strategy can address several core challenges facing the automotive industry, including raw material supply resilience, decarbonization, economic efficiency, and job security. Our core objective is to reuse recycled materials in the production of new vehicle models." He added, "In the medium term, we need to establish a circular economy value creation network, expanding more cooperation bases and partnerships across Europe."

Volkswagen stated that the selection of the Zwickau plant was based on its advantages in technological innovation and the standardized development of artificial intelligence systems, technologies that enable end-to-end tracking and management of material flow, recycling processes, and circular economy business models. The site will also become the Volkswagen Group's training center for circular economy skills.