Recycling is a key move towards a greener, more emissions-conscious future.
Chinese automotive parts remanufacturing company Yuan Planet (Chinese: 源件星球) recently completed tens of millions of dollars in Series B1 and B2 funding with support from Gobi GBA, JOY Capital, NIO Capital and others. The funding will mainly go towards expanding the dismantling plant business and investing in technology R&D, with ECapital serving as the financial advisor.
In 2022, the company unveiled a strategic rebranding campaign using the new name "Yuan Planet" to highlight its commitment to circular economy and environmentally sustainable manufacturing practices. Transitioning from an automotive reuse parts supply chain platform to a comprehensive automotive recycling resource solutions provider, the firm now predominantly engages in two core business segments.
Firstly, it focuses on recycling crucial automotive components and distributing them to downstream industries, particularly repair enterprises. Secondly, it concentrates on the recycling, categorization, and processing of metallic materials from automobile bodies, transforming them into valuable raw materials.
The modus operandi of Yuan Planet revolves around an integrated automotive reuse parts supply chain platform. This platform encompasses a meticulously maintained database of dismantled parts and a cloud-based SaaS management system. This setup enables the firm to intelligently procure recently discarded vehicles at the upstream level, enhance the proportion of parts sales, and amplify its dismantling capabilities through in-house dismantling facilities in the midstream segment. Furthermore, the firm directly reaches repair shops and local dealerships through its self-established sales channels in the downstream sector, effectively sidestepping the inefficiencies and limitations associated with traditional industry distribution methods.
Currently, Yuan Planet is aggressively pursuing opportunities in the international market. Notably, some retired domestic vehicle model components exhibit high compatibility with overseas market demands, including engines, transmissions, steering systems, front and rear axles, suspensions, and more. This trend has led to significant increases in dismantling fees in markets such as Malaysia.
To capitalize on these opportunities, the company is strategically positioning Malaysia as a central hub. From this vantage point, it plans to seamlessly connect sources from the United States, Australia, Japan, China, and other key regions. By leveraging disparities in vehicle generations, Yuan Planet aims to export products to emerging markets across Southeast Asia, South Asia, the Middle East, Africa, and beyond. This strategic pivot positions the new hub as a gateway to global markets, with about 10% of products targeted for overseas distribution.
Additionally, Yuan Planet is actively venturing into the realm of new energy solutions. As the number of electric vehicles continues to rise, particularly in comparison to traditional internal combustion engine vehicles, an emerging market for reused electric vehicle components has taken shape. Each dismantling factory within the firm's network is now equipped with dedicated new energy vehicle dismantling lines. These facilities specialize in breaking down battery packs into individual battery cells. Drawing on their extensive experience and capabilities in traditional vehicle dismantling, the firm is standardizing the process of disassembling reused components and other materials.
Despite the rapid growth of the automotive reuse parts industry, it grapples with its fair share of challenges. These include price uncertainties in transactions, inefficient distribution channels, and the absence of uniform quality standards. However, with the continuous refinement and support of national policies governing vehicle scrappage and component remanufacturing, industry experts anticipate a greener, more emissions-conscious trajectory for the sector.