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Electric Cars From China Keep Emerging In All Markets And This Could Directly Impact Fuel Sales. Gasoline May See Historic Decline By 2030.
The production of electric cars in China continues to grow at full speed. The country is already the world’s leading producer of electrified models, and the forecast is that it can further strengthen this position in the coming months. However, the boom of this electric car market in China may generate unexpected effects, especially for those who consume fuels. In this article, we will detail the impacts of electric vehicles on gasoline consumption.
Gasoline Consumption May Decline By 4% To 5%
One of the impacts of electric cars from China is the sharp decline in demand for fossil fuels. Within China itself, for example, projections indicate a decrease in gasoline consumption of between 4% and 5% per year until 2030, a more pronounced reduction than expected. The transportation sector, which accounts for about 25% of oil demand in China, has already begun to show signs of contraction.
According to the International Energy Agency (IEA), gasoline consumption will reach its peak this year and will enter a decline starting in 2025. One explanation for this scenario is the growing popularity of electric cars from China. Subsidies implemented over a decade ago by the Chinese government have allowed automakers to increase the production of EVs and reduce costs.
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In just 2024, more than 10 million new cars were produced. Projections indicate that electric and plug-in hybrid cars currently make up 10% of the country’s fleet but should exceed 20% by 2027, nearing 100% by around 2040.
Decline In Fuel Use May Reduce Key Support Pillars
The expected future scenario regarding fuels generates some fear. This is because China is responsible for nearly 20% of global oil demand and plays a crucial role in balancing the market. The decline in gasoline consumption, exacerbated by the country’s slower economic growth, threatens to reduce one of the main pillars of global oil demand support.
Additionally, the growing popularity of electric trucks and liquefied natural gas (LNG) also pressures the consumption of fuels like diesel, which peaked in 2019 and is expected to decline by 3% to 5% per year until 2030. Meanwhile, in the United States, gasoline consumption has only dropped by 12% since 2004. In Europe, the reduction was only 5% since 2007, according to Bloomberg information.
How Do Electric Cars From China Impact Brazil?
In recent years, China’s electric car market has stood out as the largest and most competitive in the world. With dozens of brands and models being regularly launched, manufacturers are in a fierce race to gain market share in this expanding sector.
However, in Brazil, the use of fuels continues to grow. Evidence of this is that diesel sales by distributors in Brazil increased by 4.2% in the first half of the year compared to the same period in 2023, reaching a record of 5.66 billion liters, according to data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
However, gasoline sales by distributors in Brazil saw a decrease of 7.4% in the first half of the year compared to the same period in 2023, totaling 21.4 billion liters, due to less competitiveness of the fossil fuel against ethanol. Meanwhile, the sales of hydrated ethanol, a direct competitor to gasoline at the pumps, grew by 50.3% in the first half compared to the same period last year, reaching 10.4 billion liters.
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