Volkswagen invests € 90 million in auto-recycling

A car factory by Volkswagen in  Zwickau, German, is currently being transformed into a circular economy centre where outdated cars will be dismantled to recover valuable raw materials & other components for reuse. As per the company, about 500 test vehicles are already being processed in the facility, with a gradual increase in capacity planned to dismantle 15,000 vehicles per year by 2030.

Volkswagen plans to invest a total of up to 90 million euros in the site over the next few years. The Free State of Saxony is funding the overall project with up to 10.7 million euros. In addition to its central function, Zwickau will initially start with the systematic disassembly of vehicles to recover valuable raw materials and reuse components.

The Zwickau vehicle plant is playing a pioneering role for the Volkswagen Group in the field of circular economy. Technical innovations and the use of AI are being developed and standardised. By using data platforms and AI, Volkswagen can efficiently track and control material flows, recycling processes and business models, and set new standards. In addition, Zwickau will play a central role in the training and further education of employees in the circular economy.

In a first step, dismantling processes will be defined, tested and validated at the site in order to set standards for all other sites. This will give Volkswagen access to parts and components that, after proper testing and processing, can be returned to the cycle, e.g. for used vehicles. Another focus is on separating materials cleanly in order to obtain pure recyclates.

Andreas Walingen, Head of Group Circular Economy, added, “ In the medium term, we will need a CE value creation network with additional locations and partnerships throughout Europe in order to scale the circular economy successfully in economic terms.”

The move into the circular economy was agreed for the Zwickau site during collective bargaining negotiations in December 2024. In addition to vehicle production, this business area is a second pillar for securing sustainable employment and building expertise in the Central Germany region.