The US Energy Information Administration Acknowledges Electric Vehicles Are Eating Into Chinese Oil Demand

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Yesterday, the identical day that Juan Diego Celemín Mojica mentioned at size for CleanTechnica the matter of global peak oil demand and the way the Worldwide Power Company and OPEC+ are noticing versus ignoring EV gross sales development in China and declining oil demand, the US Power Data Administration put out an “in-brief analysis” on What’s driving decreasing gasoline consumption in China? How ironic!

The article begins off by noting that oil demand in China has been down for the previous few months in comparison with the identical months in 2023.

Fortunately, the company didn’t ignore electrical autos and even led with them in its quick listing of explanations for the decline. “Gasoline consumption in China has begun to fall in recent months amid increased sales of electric vehicles, slow economic growth, and population decline,” the EIA wrote.

“These trends led us to reduce our forecast growth in consumption of petroleum and liquid fuels in China in 2024 and 2025 in our Short-Term Energy Outlook (STEO). China’s growth of 0.1 million b/d in 2024 and 0.3 million b/d in 2025 will mostly be driven by petrochemical feedstocks instead of transportation fuels, reflecting increased petrochemical manufacturing in the country,” the company added. It additionally famous the numerous marker we’ve written about a number of occasions — that plugin autos surpassed 50% of passenger car gross sales in China final month, October 2024, and notable improve over the 40% share in October 2023.

“Although increased BEV and plug-in hybrid sales are only one factor moderating recent gasoline consumption in China, continued market penetration of these vehicles could weigh on the future of gasoline consumption,” the EIA concludes.

“In China, sometimes between 20 million and 25 million passenger autos are offered yearly. Sooner or later, relying on future gross sales developments and the variety of inside combustion engines decommissioned, BEVs and hybrids might make up a big portion of the entire car fleet in China. Though we don’t forecast consumption for particular person petroleum merchandise resembling gasoline or diesel in nations apart from the US in our STEO, we consider basic shifts that have an effect on petroleum product consumption in our forecasts.

“In China, increased sales of BEV and hybrid vehicles, a declining population, and slower economic growth have limited growth in gasoline consumption. Based on the latest forecast from Oxford Economics, China’s GDP is expected to grow by 4.1% in 2025, which is slower than the 6.7% GDP growth rate average from 2015 to 2019, before the COVID-19 pandemic. Oil consumption correlates with economic activity, and slower GDP growth could also be limiting gasoline consumption. In addition, China’s population has begun to decline, which may reduce total miles driven and gasoline consumption.”

So, there we’re. Whereas nonetheless discussing an financial slowdown and declining inhabitants, and rightfully so, we now have a major official power company from the USA, the most important oil producer on this planet, saying out loud the apparent level different main power businesses have been avoiding. Nicely performed, EIA, and significantly Jeff Barron, the principal contributor to that in-brief evaluation.

The EIA needs to be a bit extra cautious, however we right here at CleanTechnica can prognosticate a bit extra. Based mostly on developments from the previous a number of years and fundamental understanding of geopolitical and financial issues, I presume that forecasted oil demand will decline sooner than most expect, thanks largely to EV gross sales development in China and in addition now elsewhere as Chinese language automakers shortly improve the EV exports to nations massive and small all over the world. Watch this house.