Volvo Cars Raises the Bar on Vehicle Circularity

Volvo Cars Sets New Recycling Benchmarks as Circular Economy Becomes Core to Vehicle Lifecycle Strategy

The Swedish automaker’s 2025 Annual and Sustainability Report reveals significant strides in recycled content, component remanufacturing and end-of-life material recovery, with major implications for the vehicle recycling supply chain.

Close-up of an electric vehicle battery pack. — Image credit: Envato Elements

Volvo Cars has made a series of commitments to the circular economy in its latest Annual and Sustainability Report, with hard numbers that the vehicle recycling and dismantling sector will want to study closely. From record levels of recycled content in new models to an expanding remanufacturing operation and bold 2030 targets, the report paints a picture of an OEM increasingly treating end-of-life vehicle flows as a strategic resource rather than a downstream afterthought.

27% Recycled Content, and Rising

The standout figure in this year’s report is the 27 per cent recycled and bio-based material content achieved in the new EX60 electric SUV, launched in January 2026. This exceeds Volvo’s 2025 ambition of 25 per cent and represents the highest recycled material share of any Volvo vehicle to date. By 2030, the company is targeting an average of 30 per cent recycled and bio-based content across its entire fleet, rising to 35 per cent in new models.

To underpin this ambition, Volvo has signed a new supply agreement with Swedish steelmaker SSAB for near-zero emission recycled steel, which will be used in the EX60 and future models built on the SPA3 platform. The company has also secured a closed-loop steel contract designed to help manage cost volatility in recycled materials, a significant signal that circular sourcing is being built into commercial procurement strategy, not just sustainability reporting.

Remanufacturing: 31,000 Parts and Counting

For recyclers and parts traders, the report’s data on component remanufacturing will be of particular interest. In 2025, Volvo’s aftersales operation processed 31,401 remanufactured parts, up from 22,227 the previous year, alongside 1,499 tonnes of parts and components sent for recycling. A total of 1,788 high-voltage battery packs were also refurbished rather than scrapped.

The company is investing in dedicated regional battery remanufacturing centres, with facilities already operational in Asia and South America. The model is straightforward: when an electric Volvo requires a battery exchange, the original pack is repaired and refurbished rather than disposed of. Volvo describes this as a circular initiative that both prolongs vehicle lifespan and reduces customer anxiety around battery longevity, a commercially astute approach that simultaneously serves environmental goals.

Weight reduction is also contributing to material efficiency gains. By applying new manufacturing technologies and closer collaboration across its supply chain, Volvo has reduced the weight of selected components by up to 70 per cent, in one case cutting aluminium use by six kilograms per part. Scrap steel, which accounts for around 75 per cent of total manufacturing waste, is increasingly being separated and returned to steel mills directly, with around 10 kg of steel per vehicle recovered through improved stamping cut-out management alone.

95% Recirculation Rate and the Road to 99%

At an operational level, Volvo achieved a 95 per cent recirculation rate in 2025, meaning only five per cent of total waste output went to incineration or landfill. The company has set a 2030 ambition of greater than 99 per cent, which would effectively eliminate non-recovered waste from its own manufacturing operations.

Circular business initiatives generated an additional 149 million SEK in revenue and cost savings during the year, building on the 266 million SEK delivered in 2024.

Design for Disassembly: Implications for the Recycling Trade

The report explicitly acknowledges increasing regulatory pressure around end-of-life disassembly and recyclability, noting that failure to meet these standards constitutes a compliance risk. All Volvo cars are designed to EU end-of-life vehicle recyclability standards, with the company applying design-for-circularity principles to facilitate disassembly and maximise material recovery. Traceability of substances of concern is managed through the International Material Data System (IMDS), giving dismantlers improved access to material composition data.

Volvo acknowledges it does not directly control what happens to vehicles at end of life, but states that end-of-life treatment is embedded at the design stage and considered throughout the product lifecycle. The report also notes that the company is developing capabilities to repair and refurbish high-value components through its aftersales organisation, activity that sits directly alongside the work of the professional dismantling sector.

What This Means for Vehicle Recyclers

Taken together, the Volvo report signals a direction of travel that professional recyclers need to track carefully. OEMs are increasingly embedding circular economy thinking into product design, procurement and aftersales, creating both opportunities and competitive pressure for the recycling supply chain. The growth of manufacturer-led battery refurbishment programmes and expanded remanufacturing operations means recyclers and dismantlers will need to position themselves as strategic partners in material loop-closure rather than simply end-of-chain processors.

With Volvo targeting net zero by 2040 and a fully circular business model as a long-term goal, the standards being set now, in recycled content, component reuse, and material traceability, are likely to become the baseline expectation across the industry. For the auto recycling sector, that represents both a challenge and a significant commercial opportunity.

Source: Volvo Car Group Annual and Sustainability Report 2025