Electric trucks are increasingly eroding China’s diesel demand, propelled by government incentives and the rapid adoption of new energy vehicles, recent data shows.
In April, electric trucks accounted for 22% of light commercial vehicle sales in China, a notable increase from 13% in the same month last year. Sales of larger electric trucks grew even more sharply, doubling to represent 15% of total sales. This growth, alongside the rising use of liquefied natural gas (LNG) as a fuel for trucks, presents a dual challenge to diesel consumption, which currently constitutes over 25% of China’s total oil demand.
According to BloombergNEF, China’s apparent diesel demand dropped 8.4% year-on-year to 3.78 million barrels per day in April. Analysts at GL Consulting project a 26% decline in diesel consumption by 2030 compared to last year, largely driven by the electrification of the trucking sector.
Amy Sun, an analyst at GL Consulting, pointed out that more than 70% of China’s diesel consumption is attributable to vehicles used in road freight, mining, and construction. She noted that while electric trucks are primarily used for short-haul operations or within confined sites such as ports and mines, advancements in battery capacity and charging infrastructure are expected to broaden their operational range.
Zeng Zhiwei, chairman of Contemporary Amperex Technology Co. Limited (CATL), China’s leading battery manufacturer, forecast that electric trucks could account for up to 50% of new commercial vehicle sales within the next three years. He made this prediction during the recent launch of a new battery designed for heavy-duty trucks.
China’s central and local governments have implemented tax incentives and trade-in programs aimed at boosting electric vehicle sales, especially for commercial trucks. This transition marks a significant shift in China’s transportation sector—the world’s largest oil importer—with wide-ranging implications for global energy markets.
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