ELVs as a Key Resource for the Circular Economy

For decades, end-of-life vehicles (ELVs) were seen primarily as a waste problem: abandoned in backyards, shipped to third countries, or dismantled in informal workshops. The reality was marked by losses, lack of transparency, and environmental harm. Today, vehicles leaving the road are far more than scrap metal. They contain numerous valuable raw materials that are increasingly in demand.

Every year, around six million passenger cars in Europe reach the end of their life cycle, representing material worth in the tens of billions of euros.^{1; 2} Steel and aluminum remain the largest material groups, complemented by copper from wiring harnesses and high-grade plastics from interiors and body parts. Newer vehicles also contain rare earths, permanent magnets, and lithium-ion batteries. With the rise of e-mobility, the share of these components is soaring: by 2040, roughly one-third of ELVs will be battery-electric, carrying significant volumes of battery cells, power electronics, and critical metals.

The strategic importance is clear: whoever controls access to these vehicles controls the flow of the most critical secondary raw materials of the coming decade.^{3; 4} Yet the status quo is sobering: three to four million vehicles disappear from official statistics in Europe every year – and by 2040 that number could rise to eight to eleven million.^{5; 6; 7} They are exported, stripped for parts, or simply not properly recorded. This means not only a loss of valuable materials but also missed opportunities for emission reduction and decreased geopolitical dependency.

Transforming the ELV market is therefore more than recycling policy. It is a question of competitiveness, climate targets, and resource security. It places the market squarely at the strategic center of Europe’s circular economy.

OEMs between obligation and opportunity

For over two decades, the European End-of-Life Vehicle Directive (ELVD) provided the legal framework. It formally required manufacturers and member states to meet collection and recycling quotas, but enforcement was weak. Divergent national interpretations, unclear responsibilities, and barely sanctioned loopholes left much of the potential untapped.

The new End-of-Life Vehicles Regulation (ELVR), effective from 2025, marks a paradigm shift. The directive will be replaced by directly applicable EU law, eliminating national interpretation. From 2028, extended producer responsibility (EPR) will apply. OEMs (Original Equipment Manufacturer) will then bear legal and financial responsibility across the entire lifecycle, from take-back to dismantling and recovery. Ambitious recycled-content quotas will also apply, especially for plastics, metals, and battery materials. Manufacturers must prove that their products contain defined shares of secondary raw materials, partly sourced from ELVs. This regulation radically changes the market. ELV management is no longer a peripheral task that can be outsourced; it becomes a strategic core function. Failure to meet quotas risks fines and reputational damage. Conversely, companies that establish take-back systems early can secure access to stable material flows and gain cost advantages over competitors. Consumers and capital markets increasingly value circular strategies, making credible ELV management a key differentiator. The ELVR is therefore more than a regulatory framework. It offers manufacturers the chance to position themselves proactively in the future field of circular economy, provided they see this new responsibility not just as an obligation but as an opportunity.

Private vehicle owners in the spotlight

While regulation and industry set the framework, the final decision on a vehicle’s fate lies with its owner. Around three-quarters of all ELVs are in private hands. Whether these vehicles go to an authorized take-back point or disappear into opaque channels is the decisive lever for the success of the automotive circular strategy.

A Europe-wide survey of 1,500 car owners commissioned by Porsche Consulting reveals clear patterns:

• Financial compensation is a requirement for vehicle return. Current payouts of €50–200 are hardly attractive. Only buy-back offers starting at €400–650 are perceived as truly worthwhile.
• Trust and transparency matter almost as much as money. Many owners want assurance that their car will not be illegally exported but remain in a controlled cycle.
• Convenience is critical. On-site collection, digital deregistration, and simple processes significantly increase willingness to participate.
• Sustainability is gaining weight. Younger, higher-income, and urban segments are willing to forgo short-term financial benefits for a demonstrably ecological recovery path.

Data analysis identifies four owner types, from price-driven pragmatists to conscious everyday users who value sustainability and simplicity. For OEMs, this means segmented communication is essential. A one-size-fits-all approach will fail. Success depends on programs that address diverse needs and secure stable return flows. The competition for ELVs is not just about infrastructure; it is also about consumer behavior. Only those who understand owners’ perspectives and set the right incentives will secure long-term access to critical resources.

Act before the window closes

Europe’s ELV market is on the brink of profound change. The combination of rising raw material demand, stricter regulation, and shifting consumer expectations makes it a strategic focal point of the circular economy. For OEMs, the message is clear: those who act now will reap double benefits tomorrow – economically through secured material flows and ecological advantages, and strategically through a strong market differentiator. Those who hesitate risk losing access to one of the most valuable resources of the future.