US-Mexico second-hand electric vehicle trade: Battery circularity and end-of-life policy implications

Second-Hand (SH) vehicle imports from the US comprise nearly 30 percent of Mexico's light-duty vehicles. As US electric vehicle (EV) adoption progresses, SH EVs will increasingly enter Mexico. SH EVs could speed vehicle electrification, but also present environmental and economic risks because they are larger and reach retirement faster than new EVs. Understanding future flows of used and new EVs into Mexico's fleet, and their expected retirement, is needed to understand if SH EVs provide a net benefit. This research uses system dynamics modeling to project future EV adoption and SH vehicle trade between the US and Mexico. Results show EVs will comprise nearly 50% of Mexico's fleet and up to 99% of SH imports by 2050, and SH EV batteries disproportionately contribute to the stock of spent EV batteries. Policies to ensure SH vehicle trade provides net benefits for the region include import and export battery state-of-health restrictions.