On 12 December 2025, the European Parliament and the Council reached a provisional political agreement on sweeping new EU rules for vehicle circularity and the management of end-of-life vehicles (ELVs). This future regulation introduces binding recycled-content targets, stricter traceability provisions and mandatory circular design requirements across the entire vehicle lifecycle.
The agreement marks a key milestone under the European Green Deal and the Circular Economy Action Plan. Once formally adopted and published in the Official Journal of the EU, the regulation will enter into force and apply two years thereafter. This means practical implementation is expected from the late 2020s onwards, depending on the final publication date.
Key Elements of the New Regulation
A core element of the regulation is mandatory circular design. All new vehicle types must be designed to allow the easy removal of parts, components and materials by authorised treatment facilities. This requirement directly affects product architecture, material choices and dismantling strategies.
Binding recycled-content targets will be introduced for plastics used in new vehicles:
- 15% recycled plastic content within six years after entry into force
- 25% within ten years
- At least 20% of the target must come from closed-loop recycling, including plastics recovered from end-of-life vehicles
The European Commission is also expected to assess and potentially introduce recycled-content targets for steel, aluminium and possibly critical raw materials following dedicated feasibility studies.
The regulation further strengthens extended producer responsibility (EPR). Within three years of entry into force, manufacturers will be required to cover the costs of collection and treatment of end-of-life vehicles. Stricter requirements for the removal of hazardous substances prior to shredding and reinforced export controls aim to prevent illegal exports and reduce the number of “missing vehicles.”
What this means in practice:
Circular economy moves from a sustainability ambition to a hard business requirement. Vehicle platforms launching from the late 2020s onwards will need to be designed with recycling, material recovery and traceability in mind from day one. At the same time, competition for high-quality recycled materials is expected to intensify, making early action on sourcing and partnerships critical.
The regulation will formally apply two years after its entry into force, but its impact on product development, supply chains and cost structures is immediate. Companies that adapt early can secure material access and cost stability; those that delay risk redesign efforts, higher costs and regulatory exposure.
