- More than half of all new cars sold in China are electric or hybrid, with registrations tripling since 2021.
- Some experts predict the country’s gasoline consumption could begin to drop by 4 to 5 percent every year.
- The People’s Republic accounts for nearly one-fifth of global oil demand, but that may sharply decline.
China’s EV market is booming. Sales of fully electric and hybrid cars have trebled over the last three years and are almost eight times higher than they were in 2020. It’s a great time to be an automaker selling electrified vehicles, but not so great if you’re an exec in the oil industry.
Almost one-fifth of the world’s oil production currently goes to China. The country has provided most of the industry’s growth since the millennium, as it has for the auto industry and others. But now analysts think China’s love for EVs will result in a marked drop in demand for gasoline, which accounts for 25 percent of the nation’s oil consumption.
Related: China Becomes First Country To Hit 1 Million Monthly EV Sales
One brokerage firm told reporters it expects Chinese gasoline use to drop by between 4 and 5 percent every year between now and the end of the decade. A demand reduction was always forecast, but China’s electric boom means it’s happening much faster than many experts had anticipated.
One in 10 cars currently on the road in China is electrified, but at the current sales rate, the mix is expected to double by 2027 and could reach 100 percent by the 2040s, Anders Hove, a China researcher at the Oxford Institute for Energy Studies, told Bloomberg.
That kind of shift would have a devastating impact on the oil industry, Hove predicting that China’s oil demand for light vehicles would plummet from its current 3.5 million barrels per day to just 1 million by 2040.
Though that’s a major problem for Big Oil, it can at least take some comfort in knowing that other nations are in far less of a rush to abandon their combustion cars – EVs only account for 10 percent of US car sales. And even in China, a big chunk of the growth in electrified vehicles has come from sales of PHEVs, which still need some gasoline, though exactly how much they need in real ownership scenarios across China still needs more investigation.
