Volkswagen circular economy centre launches in Zwickau to recycle cars for key materials
Clean Energy Wire
A car factory by Volkswagen in the eastern German city of Zwickau is being turned into a circular economy centre where old cars will be systematically dismantled to recover valuable raw materials and components for reuse. A total of 500 test vehicles are already being processed, with a gradual increase in capacity planned to dismantle 15,000 vehicles per year by 2030, the company said. The carmaker said it would define, test, and validate the dismantling process in a first step, aiming to subsequently spread it to other plants across the country. Volkswagen plans to invest 90 million euros in the project, with the state of Saxony providing an additional 10.7 million euros in support. The move into a circular economy approach was agreed during collective bargaining negotiations at the Zwickau site in 2024.
Dismantling returned vehicles will give Volkswagen access to parts and components that can be reintroduced into the car production cycle, for example by refurbishing used vehicles. The move will help the company to reduce its use of primary raw materials and to cut emissions, as well as providing new business opportunities through recycling, refurbishment, and second-life applications. “In the medium term, we will need a [circular economy] value creation network with additional locations and partnerships throughout Europe to scale the circular economy successfully in economic terms,” said Andreas Walingen, head of circular economy at the Volkswagen group.
A circular economy approach helps to reduce emissions and the environmental impacts associated with resource extraction and also provides greater independence in terms of critical raw materials, a sector in which China maintains a dominant grip over supplies. A joint alliance of different industries in Germany released a position paper at the end of 2025 calling on the government to increase the independence of the supply of raw materials and support a more circular economy to protect jobs and promote domestic production.