Export of used cars poses a challenge in the electrical transition

The growing production of electric vehicles will boost used car exports, concludes a report released by the World Bank, which would have implications for countries like Mexico.

“A rapid transition to electric mobility in industrialized countries could accelerate exports of used internal combustion engine vehicles to low- and middle-income countries,” is projected in the document The Economics of Electric Vehicles for Passenger Transportation.

From January to September 2022, Mexico imported 151,416 used cars, which represents a year-on-year growth of 23.8% and the highest amount since 2015 in this indicator for equal periods.

Also in relative terms and since 2015, it is the highest portion (19.4%) of used car imports among the sale of new light vehicles in the Mexican market, according to data from the Ministry of Finance and Public Credit (SHCP). .

Globally, the volume of used car exports is already large. In 2018, the same report refers, the European Union, Japan and the United States exported almost 4 million used cars, of which more than 80% went to low- and middle-income countries.

The European Union was the source of more than half of the total, including 1 million exported to Africa, followed by Japan (27%) and the United States (18 percent).

Africa, where used light vehicles account for 60% of total car parc growth, was the largest importing region (40%), followed by Eastern Europe (24%), Asia-Pacific (15%), Middle East (12% ) and Latin America (9 percent).

Among countries, Serbia, Nigeria and the United Arab Emirates imported the highest number of used cars of the three main exporting regions.

Used vehicles are not necessarily more polluting or less safe than the existing vehicle fleet in an importing country.

For example, in Japan vehicle inspections are very strict and many drivers replace their cars after about four years of service.

But many of the cars exported are poorly maintained and emissions controls have sometimes been removed to recover valuable metals from catalytic converters.

By sending these types of cars to lower-income countries, wealthier regions clean up pollution in their territories by moving it to other parts of the world instead of reducing it overall.

So, according to the report, this increases local pollution in poorer countries and does little to limit global greenhouse gas emissions, similar to heavy industry shifts in the 1990s and 2000s.

However, stricter climate policies will favor manufacturing sites with access to cleaner energy. The production of batteries for electric vehicles is a good example.

The smaller your carbon footprint, the greater the environmental benefit of an electric vehicle relative to an internal combustion engine (ICE) vehicle.

roberto.morales@eleconomista.mx