Tensions in implementing a circular economy: Empirical insights from the automotive industry

The automotive industry’s transition toward a circular economy (CE) presents challenges critical for achieving sustainability. Implementing circularity requires navigating through complex decisions, including legal issues, digital technologies, and organizational practices. Some of the decisions are even conflicting and lead to tensions that capture related opposites pulling in different directions. While understanding tensions is crucial, they often receive only limited attention, which is problematic because making appropriate decisions and developing coping mechanisms require an awareness of potential tensions. This study, therefore, empirically investigates tensions in implementing CE strategies within the automotive industry. Through semi-structured interviews with 17 industry experts across diverse CE focus areas, six tensions for implementing circularity were identified that require careful management and reflection. Also, promising practices were extracted from the qualitative analysis. The presented findings contribute to the growing body of knowledge on CE by highlighting the role of transition processes, digital technologies, and data in enabling effective CE implementations. By identifying tensions, the paper provides actionable insights for scholars, practitioners, and policymakers, ultimately supporting the development of sustainable and circular economies.