Summary
- China’s gasoline consumption has been declining due to increased sales of electric vehicles, slow economic growth, and population decline
- The US Energy Information Administration noted the decline in gasoline consumption in China and adjusted its forecast for petroleum and liquid fuels consumption in the country
- Plug-in vehicles surpassed 50% of passenger vehicle sales in China in October 2024, indicating a notable increase over the previous year
- The EIA pointed out that the future of gasoline consumption in China could be impacted by the continued market penetration of electric vehicles
- Based on trends and understanding of geopolitical and economic matters, forecasted oil demand may decline faster than expected due to EV sales growth in China and other countries receiving Chinese EV exports
Article
The US Energy Information Administration recently released an analysis on the decreasing gasoline consumption in China. The agency noted that oil demand in China has been down for the past few months compared to the same months in 2023. This decline in gasoline consumption in China is attributed to increased sales of electric vehicles, slow economic growth, and population decline. The EIA also revised its forecast for the growth in consumption of petroleum and liquid fuels in China for 2024 and 2025, stating that growth will be mostly driven by petrochemical feedstocks instead of transportation fuels.
The EIA highlighted the significant milestone of plugin vehicles surpassing 50% of passenger vehicle sales in China in October 2024, up from a 40% share in October 2023. The agency emphasized that the continued market penetration of battery electric vehicles (BEVs) and plug-in hybrids could have an impact on the future of gasoline consumption in China. With an annual sale of 20-25 million passenger vehicles in China, the forecasted trend towards BEVs and hybrids making up a large portion of the total vehicle fleet could further contribute to the decline in gasoline consumption in the country.
The EIA’s analysis also discussed the impact of factors such as declining population and slower economic growth on gasoline consumption in China. The agency pointed out that slower GDP growth and declining population have limited the growth in gasoline consumption in China. While the EIA has to be cautious in its forecasts, it acknowledged the role of increased sales of BEV and hybrid vehicles, along with broader economic trends, in shaping petroleum product consumption in the country. The EIA’s analysis marks a significant departure from previous avoidance by major energy agencies in acknowledging the impact of EV sales growth on oil demand.
In conclusion, the analysis by the EIA signals a growing recognition of the role of electric vehicles in shaping global oil demand. While discussing economic slowdown and declining population, the agency’s acknowledgment of the impact of EV sales in China on gasoline consumption indicates a shift in perspective towards a future where oil demand may decline faster than expected. With Chinese automakers increasing EV exports to countries worldwide, the trends in vehicle electrification are likely to accelerate the transition away from traditional fossil fuel consumption. The EIA’s analysis serves as a crucial step towards understanding the evolving energy landscape and the potential impact of cleaner technologies on the global economy.
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