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.

Methods
The multiple background datasets used in the study were collected from official sources in both the United States and Mexico. For Mexico, data on second-hand (SH) vehicle imports was obtained from the National Customs Agency (ANAM), and historical vehicle fleet and sales data were sourced from the National Institute for Statistics and Geography (INEGI). For the U.S., vehicle sales projections were based on the U.S. Energy Information Administration’s (EIA) forecasts, with additional adjustments made to align with government policy goals, such as the White House’s target for EV adoption.

These datasets were integrated into a multi-region stock turnover model, and further refined using optimization techniques to align the model's outputs with historical records. Then, the model incorporated battery characterization data from BatPaC v5.0 (Argonne National Laboratory) to estimate the recoverable amounts of various materials per battery pack type at their end-of-life, including lithium, nickel, cobalt, manganese, aluminum, copper, and steel. The aim was to estimate the battery mass of critical battery materials associated with used EV exports.