In an intriguing article featured in The Economist on July 22, 2023, the focus was on Charles Trent, a prominent vehicle recycling company based on Britain’s south coast. This company, which has recently invested a staggering $13 million, is pioneering a unique concept known as auto de-production. This reverse logistic auto assembly line disassembles junk cars and extracts valuable components.
The first step in the depollution process involves removing the wheels and extracting all fluids and gases. Companies like LKQ-Keystone in Chicago and Indra in France are also actively engaged in similar endeavors, dismantling cars and recycling their parts. Indra, for example, is jointly owned by Suez and Renault.
The US has a more intricate landscape due to steel processors purchasing significant portions of the industry for material feedstock. However, the Charles Trent model has the potential to extract added value from de-production before converting the remaining car skeletons into feedstock. This process can be highly lucrative as auto parts currently command high prices.
One interesting factor is the actionable and analytical data that this volume of de-production facilities will generate. This data, combined with auto parts predictive machine learning analytics, can highlight the demand for specific parts. And when certain parts are in high demand, 3D printing can fill the production gap, thereby adding a whole new dimension to this business model.
The growth of the auto 3D printed components industry contributes to the concept of circular manufacturing, which aims to reduce the energy involved in production. By utilizing 3D printing, cars can be manufactured using 40% less material without compromising structural integrity. Furthermore, this opens up opportunities for aftermarket channels. If certain components from the de-production process require repairs, 3D printers can offer cost-effective in-house solutions. These repaired parts can then be reintroduced into the auto parts supply as replacement components.
Additionally, companies that adopt 3D printing technology can benefit from the permanent Research and Development (R&D) Tax Credit. This tax credit is applicable to companies developing new or improved products, processes, and software. The wages of technical employees involved in creating, testing, and revising 3D printed prototypes can be included in the R&D Tax Credit. Moreover, the time spent integrating 3D printing hardware and software also qualifies as an eligible activity. Finally, the costs of filaments consumed during the development process can be recovered when used for modeling and preproduction.
Increasing the de-production of used cars is not only advantageous for the environment but also offers opportunities for 3D printing part production and growth. To determine the optimal economic result, the capital costs of auto de-production equipment should be compared to 3D printing capital equipment. Finding the right combination will undoubtedly yield significant benefits for the auto parts industry.
In conclusion, auto de-production is an innovative approach to recycling junk cars, and 3D printing plays a pivotal role in enhancing this concept. By leveraging 3D printing technology, companies can reduce material usage, provide high-quality aftermarket solutions, and benefit from R&D Tax Credits. As the volume of auto 3D printing increases, the industry will continue to evolve, leading to a more sustainable and efficient future.
