Get Ready for the Future: Capabilities for a Circular Economy in the Automotive Industry

Organizations need to develop specific capabilities for participating in the circular economy, which prevents them from missing out on improved competitiveness and innovation. A circular mindset for products, processes, and business models is particularly relevant for today’s complex supply chains that potentially impact global waste and pollution, as seen in the automotive industry. Against this background, we explore how automotive companies can navigate the transition toward a circular economy. Through the lens of dynamic capabilities, we analyze 278 circularity statements from sustainability reports and derive 53 capabilities and 13 mircofoundations. Our work contributes to knowledge about implementing circular thinking and provides a big picture of capabilities companies need to engage in the circular economy. By advancing our understanding of what is needed for circularity and how to make use of supporting technology, organizations can make informed investments in appropriate education, training, and digital solutions.