CNN
–
The streets of Beijing have changed dramatically in just a few days. Years of noisy, smelly traffic have been replaced by an unusual silence for a megacity. The streets line a stream of mostly electric vehicles, all with their own distinctive, green license plates.
This is not just a Beijing incident. Li Shu, director of the China Climate Hub at the Asia Society Policy Institute, said that for those arriving in many of China’s major cities from countries dominated by gas guzzlers, silence will be their first impression.
“It’s like stepping into the future,” he told CNN.
By any measure, China’s EV growth has been phenomenal. More than half Among the new cars on sale are electric ones, which all but obliterate gas-powered cars in the world’s largest auto market. in the coming decades. Last year, China’s EV sales increased to 11 million.According to data from the UK research firm Rho Motion, there will be an increase of about 40% in 2023. Shaw said it was an “irreversible change”.
China’s EV Revolution It helps to cement it. Its dominance in clean technology and its claim to global climate leadership, just as the Trump administration doubles down on planet-warming fossil fuels and demonizes clean energy.
It is also shaking the oil markets. Analysts predict that oil demand in China may be peaking – reversing from rising demand to falling – but the implications are far greater. As the world’s largest oil importer, what happens here has ramifications for the global oil market.
“The implications are staggering,” said Laurie Mellivarta, co-founder of the Center for Research on Energy and Clean Air.
China’s EV boom has its roots in nearly two decades.
Shaw said legacy automakers in the U.S., Japan and Europe had “such a big head start” on gas-powered vehicles that it was unlikely China would ever catch up. EVs provided an opportunity to dominate a new market.
There was also another important benefit: energy security.
Unlike the fossil fuel-rich US, China was. Made on imported oil. This dependence on other countries is a potential “geopolitical liability,” said Ilaria Mazzuko, an expert on Chinese climate policy at the Center for Strategic and International Studies. The advantage of EVs is that they can be powered by China’s abundant domestic electricity supply.
Mazzocco told CNN that the government began introducing EV-friendly policies around 2009, providing cheap loans to manufacturers and funding for research.
It was a “huge bet,” he said, and the road was not smooth. In some years, “it was considered kind of a failure.”
But the bet eventually paid off, thanks to continued support from China’s city and central governments, advances in battery technology and many highly competitive companies, he said, including Tesla’s main rival. China-based BYD.
The country now boasts a robust charging infrastructure and domestic EV expertise, technologies and materials. Myllyvirta said it’s producing affordable EVs in large quantities that people actually want to buy.
It’s a very different picture in the U.S., he added, where the economic case for EVs without subsidies is weak, because gas is “extraordinarily cheap” and Americans prefer “absolutely bigger vehicles.”
With President Donald Trump now in office, the country is poised to go even further with policies to promote electric vehicles and raise tariffs on Chinese EV and battery products.
That could result in the U.S. market becoming more isolated from the rest of the world, Myllyvirta said, “and that makes it harder and harder for U.S. automakers to compete overseas.”
China’s advances in electrified transportation — including a vast, high-speed rail network — are putting the brakes on its already soaring oil consumption.
Ciarán Healy, an oil market analyst at the International Energy Agency, said gasoline demand is expected to decline by about 1% in 2024 and decline sharply this year, even as people’s incomes rise. Growth and car ownership are on the rise. “This is unusual for a country with China’s economic profile,” he told CNN.
Total oil demand may also be close to peaking. China’s crude oil imports It fell about 2 percent in 2024, marking the first annual decline. Two decades apart The covid pandemic. The US is one of China’s major oil suppliers. China was the second largest importer of US crude oil in 2023. US Energy Information Administration.
The picture is slightly complicated by the fact that as EVs are reducing demand for oil, another sector is pulling it.
China’s booming petrochemical industry, which produces plastics and other industrial products, feeds on oil. But “It’s nowhere close to outpacing the reduction from the transportation sector,” said Kate Larsen, who leads international energy and climate research at Rhodium Group, an independent economic research firm.
The IEA predicts that China’s oil demand will decline by 2030. “It’s taking away one of the most productive pieces of global oil demand growth,” Haley said.
China was the largest driver of global oil demand between 2013 and 2023. In 2024, it was less than 200,000 barrels per day, according to IEA estimates.
The IEA predicts that global oil demand is set to decline later this decade and begin to decline in the 2030s, with EVs playing a major role in this declining trend.
Erica Downs, a senior research scholar at the Center on Global Energy Policy at Columbia University SIPA, said that while countries like India are increasing oil consumption, “there doesn’t seem to be anyone who can fill China’s shoes.” .
China is also reshaping the global landscape with its EV exports – a rapidly growing share of which is going to countries in the Global South, including Thailand and Brazil. Myllyvirta said the arrival of low-cost Chinese EVs “has the potential to enable a rapid transition to electricity in other countries as well.”
China’s EV revolution has put it on track to become a clean energy powerhouse. But, while China is adding wind and solar power at a lightning pace, the electricity that charges EVs is dominated by coal.
Even with this fossil-fueled electrical grid, an EV still produces less planet-warming pollution over its lifetime than a gas-powered car, Myllyvirta said. But given the carbon intensity of the manufacturing process, “you’re going to start seeing just EV sales in emissions a few years from now,” he said.
As China leads on renewables, climate. EVs will have an impact. further reduction. Rhodium plans to reduce carbon pollution by 60 percent. China’s grid intensity between now and 2040. “Those are big, big numbers,” said Rhodium’s Larson.
EVs could make up 100% of new cars sold in China by 2040. said. “It really sets the stage for a rapid reduction in emissions from transportation.”
There are many unknowns about what will happen to oil demand within China and globally over the next few years. But experts say China’s rapid EV boom represents a seismic shift that could disrupt the country’s role as an engine of global oil demand and reshape its role internationally. Can help explain.
“China finds itself in a situation where its economic, geopolitical and climate interests overlap,” Mazzocco said.
China’s clean energy transformation is in stark contrast to the US, where Donald Trump is promising to pull the plug on support for EVs and clean power.
There is already a big difference between cars on the road in China and here in the U.S., Shu said. He added that there is a danger that America could be seen as a “fossil” in the history of auto manufacturing.
