This blog is based on the recent Frost & Sullivan analyses:
- Carbon Net-zero Strategies in the Automotive Sector, Global, 2024–2030
- Green Materials in Cars: A Strategic Analysis
Both authored by Dorothy Amy, Program Manager – Business Strategy and Innovation Group
Green materials, battery recycling, circular value chains, supply chain decarbonization — all buzzwords previously alien to the automotive industry. What changed? Sustainability swiftly became the foundation for growth strategies and new business models.
Driven by stringent regulations, consumers increasingly prioritizing low-emission cars, and shifting investor priorities, OEMs are now learning what it means to sustain success in a world dabbling with vehicle pollution.
Want in-depth perspectives?
Frost & Sullivan’s latest case study, Driving Automotive Sustainability: Material Innovations, Strategies, and Growth Pathways to 2030, dives into how industry leaders like Mercedes-Benz, Kia, Ford, and Volkswagen are profiting amid a sustainability-first ecosystem.
Access the full case study here
From Fossil-based to Bio-based: Materials Are the New Growth Generator
Traditional automotive materials like virgin steel, aluminum, and plastics have long dominated automotive design and manufacturing, but they come at a cost: resource limitations and complex end-of-life disposal.
In response, OEMs are scaling a wide range of alternatives:
- Recycled polyethylene terephthalate (PET) and polymers to reduce plastic waste
- Plant-based composites sourced from coffee grounds, olive waste, and agricultural byproducts
- Second-life strategies for electric vehicle (EV) batteries through reuse in energy storage or full recovery via low-energy processes.
Does your growth strategy prioritize the use of green materials in manufacturing?
These alternatives are enabling reductions in lifecycle emissions, improved recyclability, and lower raw material dependency, helping automakers achieve both environmental and operational objectives.
Explore more such alternatives and identify growth strategies that employ green materials.
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Sustainability and Its Role in Business Model Innovation
As this transition accelerates, several new business models are guiding how sustainability is being operationalized:
- Function Over Material: OEMs are reevaluating how components are engineered to maximize sustainability without compromising safety or performance. In many cases, recycled or bio-based inputs are being engineered for specific applications, not just swapped in.
- Resilience Through Redesign: With geopolitical chaos and supply chain disruption on the rise, companies are viewing sustainability as a way to diversify sourcing, reduce exposure to virgin commodities, and build redundancy into their upstream networks.
- Integrated Lifecycle Planning: Sustainability considerations are entering earlier in the product development process — from concept modeling and sourcing strategies to digital simulations of lifecycle impact.
Access a host of innovative business models and discover pathways to implementation.
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Emerging Growth Opportunities
While many companies are experimenting with green initiatives, a few clear growth opportunities are beginning to crystallize across the ecosystem:
- Battery Circularity
EV battery systems are no longer linear. Companies like Mercedes-Benz are pioneering facilities that recover cobalt, lithium, and nickel at scale, turning what was once toxic waste into a closed-loop system. - Biomaterial Differentiation
Kia, Ford, and Volkswagen are exploring how sustainability can impact interior innovation. Beyond performance, customers are increasingly evaluating the ethical and environmental profile of the cockpits they sit on, touch, and breathe in. - Aftermarket Reinvention
End-of-life vehicles are now being seen as material banks. Refurbishment, parts recovery, and smart disassembly are unlocking new profit pools, especially for OEMs able to establish circular setups into the product cycle from day one.
Frost & Sullivan highlights more such growth opportunities and strategies to leverage them.
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Want to Explore the Leaders, Strategies, and Ecosystem in More Detail?
Frost & Sullivan’s case study, Driving Automotive Sustainability: Material Innovations, Strategies, and Growth Pathways to 2030, offers a deeper dive into how companies like Mercedes-Benz, Kia, and Ford are executing this transformation, including strategic imperatives, growth opportunities, value chain shifts, and sustainability-led innovation frameworks.
[Download the full case study here]
Frost & Sullivan’s in-depth growth analyses provide a holistic view of this evolving landscape, offering actionable insights and strategic guidance for businesses navigating this transformation.
You can also directly engage with our experts in an exclusive Growth Pipeline Dialog.
