China's extremely rapid adoption of EVs has forced oil giant Sinopec to adjust its forecasts, saying peak domestic gasoline demand has already passed and it's all downhill from here. The repercussions will be global; China has been the biggest growth market for refined oil products for more than 20 years.
According to CNEV Post, Chinese new car buyers are now choosing "new energy vehicles" (NEVs, meaning battery-electric and plug-in hybrid cars) at a rate of 37.8%, a percentage which has rocketed up from 30.0% in 2022, 15.5% in 2021 and just 5.4% in 2020.
While Scandinavian countries like Norway (87.8%), Iceland (56.1%) and Sweden (56.1%) led the world for EV adoption in 2022, China sells somewhere around 10 times more EVs than all those three combined, and there's a lot more room for growth in the world's second-most populous country, since as of 2022, less than 5% of cars on Chinese roads were NEVs.
So China's largest oil company Sinopec is already seeing a drop in demand, from which it doesn't expect to recover. Previous predictions placed peak demand somewhere in 2025, but at a conference in Zhengzhou in August, Bloomberg reported that one Zhou Yan, from Sinpoec's retail sales division, said EVs were already displacing some 15 million tons of Chinese oil product sales in 2023, and that the company is forecasting that 2024 and subsequent years will see declining demand.
According to the International Energy Agency, Chinese demand accounted for more than 70% of global oil market growth in 2023, so while global oil product sales are at record highs of around 102.2 million barrels per day in 2023 (up around 2.2 million barrels per day over figures from 2022), and gasoline for passenger cars is only a percentage of total oil product demand, it'll be interesting to see how China's rapid EV uptake affects predictions for global peak oil demand.
The IEA released its forecast in June, estimating that peak global oil use for transport will arrive around 2026, but strong demand from the petrochemical and aviation sectors would continue to support overall market growth, albeit at slower rates, at least as far out as 2028.
A global oil demand peak, then, could arrive before the end of the decade. And unexpectedly rapid transitions to cleaner vehicles like what we're seeing in China, as well as continued increases in fuel economy for new fossil burners, could bring that date closer.
Source: Bloomberg
So despite their 10 million tonnes of CO2, the PRC would lecture us on pollution ? Pots ? Kettles ?
At the risk of going out on a limb, all by my lonesome, I still think that the EV industry is not going to accelerate (sorry) as predicted by those who, heaven forfend, may just have the teensiest commercial vested interest.
The vast number of existing owners of infernal (sic) combustion-engined vehicles out there also represents a much larger but personal vested interest. This takes no account of the emotional attachment of petrol-heads for their proper vroom-vroom cars.
The next factor is the resuscitating of many other i.c. cars, which would hitherto have been considered to be on their last legs. We are already hearing of the marketplace acknowledging this, together with increasing prices in second-hand cars. Set against this, is the greater rate of depreciation of EV cars.
….and the next ? Much is spoken of the dearth of infrastructure for EV cars, which is apparently insufficient for the present EV population. But what about the long-established, extensive and, more to the point, already adequate i.c. garage trade ? The practicalities of adding to, or exchanging, their skills and equipment for what effectively remains an untried discipline. A discipline which, if you believe some “experts”, will shortly be superseded by hydrogen power. And if you think that will be the Next Big Thing, just try Googling “Stanley Steamer”.
I expect that if anyone decides to gainsay my personal observations, the word Luddite may well be dusted off. However, I would seriously like to hear, please, from academic economists, (not commercially motivated) who can present an honest assessment of the present and future EV versus IC battle, for battle it shall be.
To those who are about to or have already bought into EV, be it in vehicle or in principle, I predict that there will be tears before bedtime…..
can't afford to drive!
China is in a deep recession ...... people drive less.
China is not a country of free choice --- people will buy what they are told to buy. The demand is skewed, yet the author tries to show China as a model that we should, or will, follow? The obvious fact is that battery technology is costly and inefficient since battery cars are heavy and lack range. With freedom of choice buyers will buy what works for them --- and that is affordability and practicability (range).
I pulled into a gas station and loaded ten gallons and was on my way in ninety seconds ....... can't do that in a battery car.
I’ve been driving all-electric for nine years, and have yet to shed a single tear.
By the way, do you have a single bit of scientific data to back up your claim regarding the “greater eye of depreciation” for EVs? Don’t count the earliest models—Nissan LEAF, Mitsubishi I-MiEV, TH!NK, and others—that didn’t include much in the way of battery management systems. Modern EVs are holding their value far longer than their ICE counterparts.
Do I miss the “vroom-vroom” of some of the score of poison-spewing cars I’ve owned over the past fifty years? A little…until I press the accelerator pedal in one of my EVs. Even my first one, a 2014 Fiat 500e—nobody’s idea of a race car—was much quicker off the line than it’s predecessor, a turbocharged ‘03 MINI Cooper S. My wife’s Chevy Bolt and my Hyundai Kona are both zipper still, and Teslas and Mach-Es are speed demons, so don’t be surprised when self-described petrolheads change their minds after one test drive of Neely any EV being sold today.
I wouldn’t call you a Luddite, but I would call you unjustified in your self-confidence on this topic.