Expand circularity and innovate to avoid and reduce material waste across the value chain End-of-life vehicles can generate a large amount of solid waste, such as car frames, obsolete parts and tyres. With the rapid growth of EV production in China, a large number of automotive products will reach their end-of-life in the near future. In 2023, the volume of end-of-life batteries in China exceeded 580,000 tons.109 Proper handling and recycling of vehicle and battery materials can improve resource use efficiency and bring economic benefits. Automakers can enhance resource efficiency and improve recyclability through multiple approaches, for example: –Product and process innovation: Adopt practices such as integrated die-casting and automated manufacturing to improve resource efficiency. Collaborate with upstream and downstream partners to design and use recyclable materials. –Invest in reuse, remanufacturing and large-scale recycling: Optimize the recovery rate and quality of unavoidable production waste and improve the efficiency of end-of-life management to achieve high-value recycling. –Stringent waste management rules: Optimize manufacturing processes to minimize waste generation during manufacturing, strictly control unavoidable waste with authorized suppliers, especially hazardous waste, and transfer waste to recycling facilities promptly to avoid additional pollution. Partnership for non-downgrading circular use of aluminium BOX 5 Currently, about 80% of aluminium can be recycled in China.110 More than 90% of recyclable aluminium is used in a downgraded way, however.111 Improving the quality of recycled aluminium – while simultaneously creating opportunities for innovation and new business ventures – is one of the major challenges facing the industry in China. To enhance the efficiency and automation of scrap metal recycling and produce high-quality recycled aluminium, China Hongqiao Group partnered with Scholz, an automobile dismantling and metal recycling enterprise in Germany. This joint project harnesses Scholz’s advanced scrap automobile dismantling capabilities and recycled-aluminium production technologies, ensuring that recycled aluminium can be used without degradation. Meanwhile, it integrates end-of-life motor vehicle recycling and dismantling, aluminium recycling and power battery recycling, with the aim of feeding the materials back into manufacturing in a closed loop. This initiative helps to reduce the demand for primary aluminium and cut costs, and integrates dozens of companies in the upstream and downstream industrial chain of end-of-life motor vehicles, power battery recycling and aluminium scrap recycling.112 Upon completion, the joint project is estimated to have an annual production capacity of 500,000 tons of recycled aluminium, with a 95% reduction of energy consumption and 85% reduction of carbon emission per ton compared with non-recycled aluminium.113 It’s additionally expected to have an annual recycling and dismantling capacity of 100,000 scrap motor vehicles and an output value of more than CNY 10 billion (Chinese yuan) (approximately $1.4 billion).114 Nature Positive: Role of the Automotive Sector – China Deep-dive 30

Nature Positive Role of the Automotive Sector China Deep dive