Rapid vehicle electrification reduces carbon benefits but increases resource savings in circular automobile transitions

The automobile sector faces major challenges in reducing greenhouse gas (GHG) emissions, with the shift to electric mobility raising concerns about resource sustainability. Although circular economy (CE) strategies are suggested as complementary solutions, their long-term effectiveness is questioned due to rapid vehicle electrification. This study examines whether evolving energy scenarios affect the effectiveness and priority of CE strategies in Japan’s and China’s automobile sectors. Under moderate vehicle electrification scenario, CE strategies could reduce cumulative resource extraction by 2.4 Gt in Japan and 49 Gt in China, with GHG reductions of 0.28 Gt and 6.1 Gt, respectively, by 2050. Under more aggressive electric vehicle scenarios, resource savings rise to 3.1 Gt (Japan) and 52 Gt (China), although GHG reductions decrease to 0.21–0.25 Gt in Japan and 5.2–5.6 Gt in China, depending on the energy mix. Over 50% of remaining GHG emissions in Japan and China will be tied to vehicle manufacturing, especially lithium-ion battery (LIB) production. Reducing vehicle ownership remains the most impactful strategy, with vehicle downsizing and enhanced material recycling offering notable benefits, especially in China. Policy measures such as shared mobility services, subsidies for durable and fuel-efficient vehicles, and advanced LIB recycling systems are critical to addressing resource demands and environmental impacts. While the GHG mitigation potential of CE strategies may decrease as grids decarbonize, their role in conserving critical resources remains indispensable. These findings highlight the need for holistic, life-cycle approaches that integrate CE strategies with decarbonization policies to achieve net-zero goals. Lessons from Japan’s and China’s experiences provide actionable insights for other regions, emphasizing the enduring relevance of CE strategies in reducing resource consumption and mitigating environmental impacts in a rapidly electrifying automobile industry.