Challenge for the entire supply chain
New requirements for the circular economy for vehicles will challenge not only automobile manufacturers, but also their suppliers.
On July 13, 2023, the European Commission submitted a proposal for a regulation on “cirqularity requirements for vehicles design and on management of end-of-life vehicles (…)” (COM(2023) 451 final). The aim of the proposal is to regulate vehicle manufacturing, one of the most resource-intensive sectors of the economy, in a new and more sustainable way in view of the market penetration of electric vehicles and the resulting demand for raw materials. Until now, sustainability requirements have been addressed by the type approval legislation in Directive 2005/64/EC, and the treatment of end-of-life vehicles has been regulated by Directive 2000/53/EC. These requirements shall now be merged.
Status of the legislative process
Before addressing the main content of the proposal below, it should be noted that the legislative process has not yet been completed. There has been no trilogue procedure to date. The ENVI and IMCO committees of the European Parliament submitted over 1,400 amendments to the Commission’s proposal and plan to vote on it in a first reading in September of this year. In March 2024, the European Economic and Social Committee also called for “even more ambitious targets” (C/2024/1593).
The general approach of the EU Council was published on June 11, 2025, and forms the basis for the following explanations (Council of the European Union, 10092/25). The proposal or an amended version could be adopted before the end of this year.
Which vehicles are affected
In its current version, the proposal contains over 100 recitals, almost 60 articles, and 13 annexes. It is intended to cover vehicles in categories M1 (passenger cars) and N1 (light commercial vehicles up to 3.5 t). Up to five years after entry into force, further vehicle classes are to be gradually included in the scope of application (excerpt: M2, M3, N2, N3, O, L1e – L7e).
Circularity
According to Article 4 (1) of the draft, vehicles type-approved six years after the entry into force of the regulation must be at least 85% reusable or recyclable by mass and 95% reusable or recoverable by mass. Reuse shall mean operations in which end-of-life vehicle parts or components are used again for the same purpose for which they were designed, whereas recoverability shall mean the recovery of parts, components, or materials from end-of-life vehicles. Recyclability shall mean the possibility of recycling parts, components, or materials from end-of-life vehicles.
End-of-life vehicles are only those that are either waste within the meaning of Article 3 (1) of Directive 2008/98/EC (“(…) an object of which the owner discards (…)”) or those within the meaning of Annex I of the draft, which requires an assessment by motor vehicle experts.
Reusability, recyclability, and recoverability are to be calculated either according to a method specified by the Commission by means of an implementing act or, until such a method has entered into force, in accordance with ISO standard 22628:2002 in conjunction with Annex II, Part A of the draft.
Manufacturers shall collect all necessary data from the entire supply chain, in particular on the type and mass of all materials used, and all relevant vehicle data. They shall also verify the “accuracy and completeness” of the information received from suppliers and identify parts and components made of polymers or elastomers (Article 12 of the draft).
Requirements for Substances
Article 5 of the draft stipulates that substances of concern must be minimized as far as possible. The restrictions of the REACH Regulation and the POP Regulation shall continue to apply. However, according to Article 5 (2) of the draft, six years after the regulation comes into force, neither lead, mercury, cadmium nor hexavalent chromium may be contained in vehicles.
Also six years after the regulation comes into force, 15 percent by weight of the plastic used in a vehicle must come from recycled consumer plastic waste. Of this, a quarter must be obtained from plastic from end-of-life vehicles or waste parts from vehicle repairs. Two years later, 20 percent by weight of the plastic must be recyclates, and four years later, 25 percent by weight.
Design Requirements
Vehicles that are type-approved six years after the regulation comes into force must be designed in such a way that the parts and components listed in Annex VII, Part C of the draft can be removed in recycling facilities. This applies in particular to all batteries, engines, catalytic converters, rims, tires, cable harnesses and fuel tanks.
Manufacturer obligations
Compliance with the requirements must be proven to the type approval authority by means of appropriate documentation in the description folder during the type approval process.
In addition, a “recyclability strategy” must be developed for each vehicle class and submitted to the type approval authority and the Commission (see Annex IV, Part A of the draft).
Furthermore, mandatory reporting on the recycled content of the substances listed in Article 10, information from the manufacturer to waste management companies, repair and maintenance companies for the purpose of removing and replacing parts, components, and materials (Article 11), and, under certain circumstances, their labeling (Article 12) are also planned.
Conclusion and future
The proposals described above are only an excerpt from the draft. Further changes are to be expected during the trilogue. However, neither the Council nor the Parliament are currently opting for a less stringent approach. Although long implementation periods are planned — the regulation is not to apply until two years after its entry into force — the resulting requirements are immense and demand industrial foresight.
The latter applies equally to automotive suppliers. Although they are not directly affected by the planned regulation, they will (have to) be indirectly obliged to contribute by their customers.
It is therefore important for both vehicle manufacturers and their suppliers to monitor the further development of the proposal and to start considering how to implement the requirements in their own processes and implement them in a timely manner. A systematic approach to legal monitoring and a gap analysis with regard to the necessary changes – also with regard to their own supply chain – will be necessary and of help in this regard.
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