Mercedes-Benz: A Supply Chain Sustainability Leader

The automotive industry's transition to electric vehicles presents significant supply chain challenges and opportunities.

In 2023, private cars and vans were responsible for around 10% of global energy-related carbon emissions, according to the International Energy Agency.

This statistic prompts vehicle manufacturers, including Mercedes-Benz, to rethink their value chains from raw material sourcing through to end-of-life vehicle processing.

By leading the way in this reinvention, Mercedes-Benz has been named 33rd in Sustainability Magazine's Top 250 World's Most Sustainable Companies 2025.

Supply chain decarbonisation strategy

The sustainability strategy at Mercedes-Benz centres around Ambition 2039, which aims to make its fleet of new vehicles net carbon neutral along the value chain by 2039.

This ambitious target requires a fundamental transformation of the company's supply chain operations, from upstream raw material extraction to downstream distribution networks.

By 2026, Mercedes-Benz pledges to have invested more than €60bn (US$69bn) into the transformation of its fleet to meet the demands of the industry.

The company's approach to supply chain decarbonisation extends beyond its direct manufacturing operations.

While the company's own vehicle production locations achieved net carbon neutrality in 2022, the focus shifts to ensuring suppliers and logistics partners align with these environmental commitments.

The company plans to cover more than 70% of its energy needs through renewable energy by 2030, with an aim to introduce solar and wind power at its sites and source the rest of the energy through power purchase agreements.

Ulf Zillig, Head of Group Research, Sustainability and RD Functions at Mercedes-Benz, says: "We are the inventor of the automobile and Mercedes-Benz is one of the world's most valuable brands. It is our responsibility to carry this legacy into the future.

"Our most important task right now, during our company's most far-reaching transformation phase, is to set the course for a successful and more sustainable future and make the right decisions to achieve this. With Ambition 2039, we are tackling one of our most important sustainability goals: decarbonisation."

Circular supply chain implementation

Mercedes-Benz is working towards closing its material cycles to increase the use of secondary raw materials in its vehicles.

This circular approach can transform traditional linear supply chains into closed-loop systems where materials are continuously recovered and reintegrated into production.

The company is using lightweight construction to make its vehicles more economical and efficient by conserving resources while reducing transportation emissions throughout the logistics network.

Mercedes-Benz implements a four-step plan to extend its value chain and keep materials in use for longer:

• Rethink: optimising the design of vehicles to ensure that they are durable, repairable and recyclable
• Reduce: reducing the use of raw materials and energy to minimise environmental impact
• Repair: extending the lifespan of products by setting up workshops and service centres to perform repairs and maintenance
• Recycle: recovering valuable raw materials to be integrated into new vehicle production.

Responsible material sourcing

Mercedes-Benz relies on sustainable supply chains for its electric fleet and ensures that there is responsible use of raw materials from the start of production.

The transition to electric vehicles has introduced new supply chain complexities, particularly around the procurement of battery materials such as lithium, cobalt and rare earth elements.

The company's goal is for its products to only contain materials that have been mined and produced without violating human rights and environmental standards.

Renata Jungo Brüngger, Member of the Board of Management for Integrity, Governance and Sustainability at Mercedes-Benz, says: "This isn't just about recycling, it's about changing how we source materials.

"By reducing primary resources and focusing on a circular economy, we're minimising our environmental impact. For me, it underscores the importance of combining technological innovation with resource efficiency. It's a testament to our commitment to a more sustainable future of mobility at Mercedes-Benz."