China controls roughly 70% of critical mineral ore extraction and about 90% of refining capacity. Those two numbers explain why circularity has moved from the sustainability department to the boardroom, according to an analysis by IMD business school professors Julia Binder and Manuel Braun published in March.

The authors argue that access to critical minerals, grid capacity and physical assets — not capital — is now the binding constraint on investment across automotive, energy, technology and infrastructure. Wind developers face transformer backlogs that slow grid connections. Cloud providers debate whether data center expansion will be limited more by power availability, interconnections, cooling and transformer supply than by financing, with bottlenecks capable of delaying projects by years.

Europe is more exposed than most regions, the authors note, because of fewer domestic deposits and higher import rates.

Automotive moves first

When China introduced new export controls affecting rare-earth supply chains, the automotive sector reacted first and most visibly. Electric motors and many vehicle systems depend on permanent magnets whose upstream processing is highly concentrated. The controls raised the threat not only of higher prices but of reduced deliveries that could translate into lost revenue with little warning.

BMW has responded by building circularity into its sourcing strategy. Its newest vehicles contain roughly 40% recycled content across the vehicle, reducing dependency on primary materials. The company is also partnering with recyclers including PreZero to explore material recovery at end of vehicle life.

The battery value chain offers the clearest illustration of circularity as strategy rather than messaging, the authors write. Volkswagen Group Components has opened a battery recycling pilot plant in Salzgitter to recover materials for future battery production. In North America, Ford and Redwood Materials have announced a partnership framed explicitly as building a closed-loop supply chain for EV battery materials, connecting end-of-life collection to recovered metals that flow back into manufacturing.

Toyota Motor Corporation, meanwhile, has announced investment in a new circular factory in Poland designed to process 20,000 end-of-life vehicles per year, recovering reusable components and materials such as copper, aluminium and steel.

Beyond autos

Wind turbine makers using rare earth magnets in direct-drive designs have long faced a trade-off between performance, maintenance and rare earth supply concentration. Siemens Gamesa has publicly announced efforts to reduce reliance on Chinese rare earth elements and has explored recycling and recovery opportunities.

In technology, Microsoft has built Circular Centers to reuse and recycle servers and hardware components within its cloud supply chain, positioning reuse to strengthen supply chains and manage hardware lifecycles at scale.

"Google has long-run programs that harvest, repair, and redeploy data center components, and it has described these practices as part of how it manages excess inventory and reduces the need for new components," the authors write.

Apple has invested in disassembly robotics such as Daisy, publicly tied to recovering valuable materials including rare earth elements that traditional recycling struggles to retain. Its trade-in and resale model is now fully integrated into the operating model — expanding market share, increasing customer loyalty and de-risking sales channels, according to the analysis.

The value ladder

The authors lay out a sequence of business outcomes circularity can deliver, starting with regulatory readiness. Companies that reduce material complexity, avoid substances likely to face restriction and design for traceability are better positioned as chemical, trade and critical materials regulations increasingly intersect — avoiding costly redesigns, delayed market access and stranded inventory.

Risk reduction follows. Circular strategies lower dependence on virgin inputs and extend asset life. The most damaging disruptions today are not short-term price spikes but prolonged shortages that halt production; firms that reuse, refurbish or remanufacture components reduce both the frequency and severity of such shocks.

Reputational advantage in volatile markets is tied to reliability rather than virtue, the authors argue: demonstrated control over material flows translates into preferred supplier status, faster permitting and deeper partnerships.

At higher maturity, circularity drives relationships — repair, refurbishment and reuse models create ongoing customer touchpoints that linear models structurally lack — and then revenue growth. Product-as-a-service models, performance-based contracts and secondary markets can see a brand sell a product two to three times with a refurbishment step in between, generating recurring revenue more stable than traditional sales.

The final outcome is return: lower material costs, optimized waste management fees, reduced downtime, improved asset utilization and more predictable margins. "Circularity, at this point, is no longer a sustainability narrative. It is a capital-efficient narrative," the authors write.

Apple's model illustrates the conversion logic. The obvious value lies in refurbished device margins; the strategic value lies in lower effective upgrade costs, higher retention and deeper integration into the hardware and services ecosystem where recurring revenues accumulate.

"Circularity does not automatically create profit, but when connected deliberately to revenue models and risk management, it strengthens competitive position in ways that linear models cannot," the authors conclude.

The milestone to watch: whether the announced closed-loop projects — Toyota's 20,000-vehicle-per-year Polish plant, the Ford–Redwood chain, VW's Salzgitter scale-up — convert from pilots to throughput that measurably displaces virgin mineral demand before the next export control forces the issue.