The US Vitality Data Administration Acknowledges Electrical Automobiles Are Consuming Into Chinese language Oil Demand

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Yesterday, the identical day that Juan Diego Celemín Mojica mentioned at size for CleanTechnica the matter of world peak oil demand and the way the Worldwide Vitality Company and OPEC+ are noticing versus ignoring EV gross sales development in China and declining oil demand, the US Vitality Data Administration put out an “in-brief evaluation” on What’s driving reducing 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 current months amid elevated gross sales of electrical autos, sluggish financial development, and inhabitants decline,” the EIA wrote.

“These developments led us to cut back our forecast development in consumption of petroleum and liquid fuels in China in 2024 and 2025 in our Quick-Time period Vitality Outlook (STEO). China’s development of 0.1 million b/d in 2024 and 0.3 million b/d in 2025 will principally be pushed by petrochemical feedstocks as a substitute of transportation fuels, reflecting elevated petrochemical manufacturing within the nation,” the company added. It additionally famous the numerous marker we’ve written about a number of instances — 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.

“Though elevated BEV and plug-in hybrid gross sales are just one issue moderating current gasoline consumption in China, continued market penetration of those autos might weigh on the way forward for gasoline consumption,” the EIA concludes.

“In China, sometimes between 20 million and 25 million passenger autos are bought 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 international locations aside from the USA in our STEO, we consider elementary shifts that have an effect on petroleum product consumption in our forecasts.

“In China, elevated gross sales of BEV and hybrid autos, a declining inhabitants, and slower financial development have restricted development in gasoline consumption. Based mostly on the most recent forecast from Oxford Economics, China’s GDP is predicted to develop by 4.1% in 2025, which is slower than the 6.7% GDP development fee common from 2015 to 2019, earlier than the COVID-19 pandemic. Oil consumption correlates with financial exercise, and slower GDP development is also limiting gasoline consumption. As well as, China’s inhabitants has begun to say no, which can scale back whole miles pushed and gasoline consumption.”

So, there we’re. Whereas nonetheless discussing an financial slowdown and declining inhabitants, and rightfully so, we now have a big official vitality company from the USA, the biggest oil producer on the planet, saying out loud the plain level different main vitality businesses have been avoiding. Effectively executed, EIA, and notably Jeff Barron, the principal contributor to that in-brief evaluation.

The EIA must 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 likewise now elsewhere as Chinese language automakers shortly improve the EV exports to international locations massive and small all over the world. Watch this area.