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China’s Electric Commercial Vehicle Boom May Have Global Implications For Oil Demand


As the world’s largest commercial vehicle market, developments in China have a real impact on global trends, and the latest news emerges from the light commercial vehicle segment in the country. The EV share of light commercial vehicles in China has increased from less than 1 percent to 10 percent over the past two years and shows no signs of slowing down.

A combination of policy support, a wide range of available models, and a large-scale ramping up of charging infrastructure investment has caused the market to take off, as reported by Bloomberg. They also note that all electric passenger vehicles too are showing massive signs of growth, with 22 percent of the market and growing steadily.

Over the past two years, China has been experimenting to identify the right mix of economic, technological, and policy levers to drive the broad adoption of zero-emissions vehicles in commercial segments, and the tipping point, which sees the start of this wide adoption, may now have arrived. Although a wide swathe of the industry believes that hydrogen fuel cells are the long-term solution for lowering emissions in the commercial vehicle sector, data from China appears to show that pure EVs have the majority share of alternative fuel vehicles by a wide margin, according to analysis by BloombergNEF.

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Even long-haul transport, long considered difficult for EVs to crack due to range limitations and recharging times, may now see EVs taking larger shares in China, due to a widespread commitment towards establishing battery swap facilities. Data shows that in the past year, the number of battery-swapping stations beings set up in the country has increased by 318 percent, to assist with the deployment of a planned fleet of 34,000 EV vans and trucks with swappable batteries.

This all has implications on a global scale because it appears to indicate that the conventional wisdom, which holds that commercial vehicle demand will keep demand for fossil fuels having steady growth in the medium term, may need to be revised. BNEF’s 2022 Road Fuel Outlook predicts global road transport demand for oil to peak in 2027, but if the situation in China continues (and replicates in other markets), this may happen much sooner.


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