After a pandemic-induced hiatus, auto shows have returned with a newfound focus on the inevitable electric future of the automotive industry, and this year’s Paris Motor Show was no different. This year’s show in October, with the theme “The Revolution Is On,” saw the debut of sleek new electric SUVs from industry giants such as U.S.-based Jeep and electric urban mobility solutions from young startups such as Tel Aviv-based City Transformer.
Perhaps the most revolutionary reveal, however, was not of a tangible product, but of a demonstration to commitment to automotive sustainability and circularity by French multinational automobile manufacturer Renault Group.
A new model for automotive circularity
Renault, founded in 1899 and with 170,000 employees today, is one of France’s oldest and largest automobile manufacturers, and has been carving a new legacy for itself over the past decade. At a press conference just a few days ahead of the start of the 2022 Paris Motor Show, Renault Group announced the creation of a new business entity, The Future is NEUTRAL. This new company is entirely dedicated to providing closed-loop solutions across the automotive value chain in order to maintain the value of car parts and materials for as long as possible, and aims to reach $2.43 million in revenue by 2030.
As a founding partner and longstanding strategic partner of the Ellen MacArthur Foundation, Renault has a long history of spurring innovation and developing expertise in circular economy practices. The Future is NEUTRAL draws on over a decade of this expertise, which manifests in initiatives such as Renault’s Refactory, an existing factory that is being transformed to house circular economy activities, and strategic partnerships with other industry players such as Veolia, a resource management company.
When you change your organization to become a circular organization, you have to break your silos.
“Based on this experience and convinced of the potential of these activities, we are accelerating and creating The Future Is NEUTRAL, which brings together all our industrial and technological assets, as well as our network of strategic partners,” said Luca de Meo, CEO of Renault Group, in a press release.
Renault is well practiced at coalescing resources and organizations to work towards a common vision of circularity, and The Future is NEUTRAL is just the latest iteration of what this sort of collaboration can look like. “Companies are siloed. When you change your organization to become a circular organization, you have to break your silos. When you think at the system level, you have to break the silos outside of your organization,” said Alice Bodreau, strategic partners manager at the Ellen MacArthur Foundation.
Breaking silos within the organization
One major focus for The Future is NEUTRAL is actualizing the “car-to-car” concept, where the car itself becomes the primary source of raw materials for future vehicles. The many paths towards this vision are being explored at the epicenter of Renault’s efforts in this area: the Refactory in Flins, a commune in north-central France.
The first circular economy factory of its kind, Renault’s Refactory houses an industrial and commercial ecosystem that operates across four key pillars: Re-trofit; Re-energy; Re-cycle; and Re-start. Each pillar tackles a different segment of the circular automotive value chain: Re-trofit is focused on extending the life of vehicles through repair and conversion of combustion vehicles to less carbon-intensive vehicles; Re-energy aims to extend the life of vehicle batteries; Re-cycle seeks to increase the percentage of recycled materials in vehicles; and Re-start offers resources to automotive start-ups and partners looking to develop circular innovations.
Enabling vehicles to become their own supply chains requires partnerships with other companies, and The Future is NEUTRAL will accelerate those within the Renault ecosystem. For example, a key outcome of the Re-cycle pillar is developing a vehicle dismantling line. Gaia, one of Renault’s subsidiary companies with operations in the French commune Flins, has expertise in identifying recyclable car parts and materials and ensuring their reuse or recovery through recycling networks. In the future, the Refactory’s vehicle dismantling line will supply Gaia’s operations.
This synergistic environment has many benefits, particularly for the participants of the Re-start incubator program. According to Nathalie Rey, head of innovation hub at the Refactory, the Re-start incubator is designed to facilitate interactions between Renault and startups, entrepreneurs and universities working in the automotive space, who can lean on Renault’s resources to develop or co-develop innovations. There are three types of incubation programs for startups of various types and maturity levels: a circular economy program applied to mobility; an industrialization preparation program; and an industrial-scale vehicle reconditioning program. “The proximity to the Refactory makes it possible to see concretely the projects implemented on an industrial scale,” Rey said.
One such example of the benefits of direct access to Renault’s resources is the work of vehicle manufacturer Tolv (formerly Phoenix Mobility), part of the Re-start incubator. Tolv will develop a retrofit kit that will enable a combustion engine vehicle that is more than 5 years old to be converted to an electric vehicle. The 1,000 retrofit kits, to be developed before the end of 2023 as the first stage of this partnership, will be assembled by Renault and commercially distributed by Tolv.
A microcosm of a circular automotive ecosystem, the Flins Refactory demonstrates the pace of innovation that can be achieved in a heavy industry when silos are broken.
Pursuing ecosystem partnerships
Another of The Future is NEUTRAL’s ambitions is to become the leader in closed-loop battery recycling in Europe. This ambition would not be attainable without ecosystem partnerships with companies up and down the battery supply chain. Renault’s pursuit of such partnerships over the years demonstrates the challenges companies face in working towards common goals.
In 2013, Renault inked a partnership with Veolia, a resource management company with expertise in dismantling and recycling lithium-ion batteries, the most common batteries used in electric vehicles today. Together, the companies hoped to improve the recycling process for batteries, with aims to increase the amount of precious metals that can be recovered and prevent toxic materials from entering the environment during the resource recovery process.
In 2020, Veolia and Solvay, a chemical company with expertise in chemical extraction and purification, formed a consortium to develop solutions for closed-loop lithium-ion battery recycling. Soon afterwards, in 2021, Renault joined the consortium. Each with expertise at a different stage of the battery recycling process, Renault, Veolia and Solvay aimed to form a partnership of the magnitude required for meaningful circular economy innovation. “I think this tells a very strong story of how they’ve demonstrated this need to work internally to deliver on the circular economy agenda, and also embrace and onboard other players as well,” Bodreau of the Ellen MacArthur Foundation said.
The transition to a circular economy requires companies to think collaboratively and envision new ways of generating value.
Recently, however, Renault terminated the memorandum of understanding with Véolia and Solvay for the closed-loop recycling of EV batteries. When asked to comment on why the partnership had been dissolved, Renault’s press team stated that “all the conditions for the creation of a joint venture/consortium had not been met.”
According to the press office, Renault is continuing its work with Veolia on open-loop battery recycling, in which battery metals are recycled for purposes other than creating new EV batteries.
An enduring strategy
Although competition is typically the name of the game in business, the transition to a circular economy requires companies to think collaboratively and envision new ways of generating value. For Renault, the creation of The Future is NEUTRAL is a tangible statement of their belief in the business value that circular economy practices can bring, and another opportunity to exercise an enduring strategy of breaking silos within the company and across the industry.
With aims to push the automotive industry towards resource neutrality by increasing the rate of recycled material in the production of new vehicles and becoming a leader in closed-loop battery recycling, The Future is NEUTRAL marks an exciting new beginning for Renault and for the future of automotive circularity.