- More than half of new cars sold in China are electric or hybrid, with registrations tripling since 2021.
- Some experts predict that the country’s gasoline consumption may begin to decline by 4% to 5% annually.
- The People’s Republic of China accounts for nearly a fifth of global oil demand, but that number is likely to fall sharply.
China’s electric vehicle market is booming. Sales of all-electric and hybrid vehicles have tripled over the past three years and are almost eight times higher than in 2020. It’s a great time to be an automaker selling electric vehicles, but not so great if you’re an auto industry executive. Petroleum industry.
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Nearly one-fifth of world oil production currently flows to China. Much of the industry’s growth since this century has come from China, as has the automotive industry and other industries. But analysts now believe China’s love affair with electric vehicles will lead to a significant drop in demand for gasoline, which accounts for 25% of China’s oil consumption.
Related: China becomes first country to surpass 1 million monthly electric car sales
A brokerage firm told reporters that China’s gasoline use is expected to fall by 4% to 5% annually from now to the end of this century. Demand was always forecast to fall, but China’s power boom means demand is falling much faster than many experts expected.
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Anders Hove, a China researcher at the Oxford Institute for Energy Research, said that currently one in ten cars on China’s roads is electric, but at the current sales rate, this proportion is expected to double by 2027 and possibly by the 2040s. to reach 100%, tell Bloomberg.
This shift will have a devastating impact on the oil industry, with Hof predicting that China’s oil demand for light vehicles will plummet from the current 3.5 million barrels per day to just 1 million barrels per day by 2040.
While this is a major problem for Big Oil, it can at least give the company some comfort knowing that other countries are in no hurry to abandon gas-powered cars — electric vehicles account for only 10% of U.S. car sales. Even in China, where a large portion of EV growth comes from plug-in hybrid sales, plug-in hybrids still require some gasoline, although exactly how much gasoline is needed in terms of actual ownership across China still requires more investigation.
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