MILAN (Reuters) - Carmaker Stellantis and Belgian metals recycler Galloo have entered exclusive talks to create a joint venture focused on parts and material recycling from end-of-life vehicles, the two companies said on Monday.
The preliminary deal is part of the carmaker's strategy to expand its so-called "circular economy" business, which includes vehicle reconditioning and dismantling as well as reuse of parts and materials, amid industry fears of a prolonged shortage of raw materials.
A rush to electrification and global supply chain issues have made the sourcing of certain key materials and components (for batteries, but also steel, copper etc) far more difficult, on top of prices rising for most of them.
The Stellantis-Galloo JV will operate through selected treatment facilities to collect vehicles from their last owners, with a service expected to be launched at the end of this year in France, Belgium and Luxembourg and then expanding across Europe, they said in a joint statement.
The JV will offer its services to Stellantis and other automakers. Galloo specialises in the dismantling of cars and ships.
Stellantis Senior Vice President for Global Circular Economy Alison Jones said that returning parts and materials to the value chain "preserves scarce resources and helps our drive to reach carbon net zero by 2038".
"Use less (materials), use (them) for longer, and recycle them when possible," she said during a media briefing.
No financial details were provided.
Stellantis has set a goal to have 40% of green materials in its vehicles by 2030.
The world's third largest carmaker by sales has plans to boost recycling revenue ten-fold and parts revenue 4-fold by 2030, compared to 2021, targeting over 2 billion euros ($2.1 billion) in revenue from its circular economy business by that date.
Jones said the JV would also rely on Stellantis' main circular economy hub, which the group is setting-up in its Mirafiori complex in Turin, Italy.
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