ZWICKAU (dpa-AFX) - Starting in 2030, automaker Volkswagen plans to dismantle and refurbish up to 15,000 vehicles annually at its Zwickau site. After pioneering the group's transition to electric vehicles, the factory is once again taking on a leading role, according to VW Saxony chief Danny Auerswald. "We are now tapping into the crucial business area of the circular economy," he said. Volkswagen will invest up to €90 million in the project and secure 1,000 jobs, the company stated. The state of Saxony is supporting the initiative with around €10.8 million in funding.

What exactly is planned?

In the future, used vehicles from the group's brands will be brought back to the factory by customers and dealers—both electric cars and combustion-engine models. These vehicles will undergo an inspection. Depending on their condition, they will either be refurbished for customers or dismantled so that individual components such as doors, headlights, or engines can be reused, for example, in used cars. Raw materials, such as those from electric vehicle batteries, will also be recovered.

"This will make Volkswagen less dependent on the global raw materials market, reduce the vehicles' CO2 footprint, and create new business models," explained Andreas Walingen, who is responsible for the circular economy division. He did not provide a specific figure for the recycling rate, noting that it varies by vehicle type. However, experience from other industrial sectors shows that rates above 80 percent are possible, and more than 90 percent for batteries.

The number of dismantled vehicles is set to gradually increase in the coming years. This will require modifications and investments in new facilities and AI applications, the company said. This year, the first 500 vehicles are expected to be dismantled.

The plant must hand over models to other sites

Volkswagen is grappling with overcapacity at its German locations. As a result, car production in Zwickau is being scaled back, with several models slated to be transferred to other factories over the coming years. In exchange, the site—currently employing around 8,500 people—will, according to an agreement reached at the end of 2024, be given the new business field of the circular economy.

Zwickau will now become the central competence center for this field within the Volkswagen Group, the company said. New business areas in this sector will be evaluated for economic viability, standards will be set, and expertise will be made available to other sites worldwide. In addition, knowledge gained from dismantling will feed into future product development.

Minister calls for group headquarters for Circular Economy in Saxony

Saxony's Minister of Economic Affairs, Dirk Panter (SPD), said that this entry into the circular economy at the site could only be a first step. "We also want the group headquarters for the Circular Economy to be here," said Panter. "We want development, research, work, and decisions to happen here."

This goal is also shared by employee representatives in Zwickau, according to works council chairman Mario Albert. They, too, see employment potential in this sector. Making Zwickau a competence center for the circular economy is a "huge step into the future," he said. However, it remains important that cars continue to be built at the site as well.

In addition to VW, other automakers are increasingly focusing on recycling end-of-life vehicles. Renault, Stellantis, and Toyota have already established corresponding facilities in Europe./hum/DP/jha