CNN
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The cityscape of Beijing has changed dramatically in just a few years. The noise of noisy, foul-smelling cars has been replaced by a silence unusual for a metropolis. The roads are filled with mostly electric cars with distinctive green license plates.
This is not just a Beijing phenomenon. Li Shuo, director of the China Climate Hub at the Asian Social Policy Research Institute, said the tranquility will be the first impression for people arriving in many of China’s major cities from countries with large gas consumers. .
It’s like stepping into the future, he told CNN.
No matter how you look at it, the growth of EVs in China is extraordinary. More than half of new cars sold are electric, and the world’s largest car market is on track to largely phase out gasoline-powered cars in the coming decades. According to data from British research firm Lowmotion, sales of EVs in China soared to 11 million last year, an increase of nearly 40% compared to 2023. This is an “irreversible change,” Shuo said.
China’s EV revolution will boost China’s dominance in clean technology and global climate leadership just as the Trump administration doubles down on global warming fossil fuel use and demonizes clean energy. It helps strengthen the argument.
The oil market has also been shaken. Analysts predict that oil demand will peak in China and demand could turn from rising to falling, but the impact will be far-reaching. As the world’s largest oil importer, what happens here has ripple effects throughout the global oil market.
“The impact is staggering,” said Lauri Milivirta, co-founder of the Center for Energy and Clean Air Research.
The roots of China’s rapid increase in EVs go back about 20 years.
Legacy automakers in the U.S., Japan and Europe have a “huge head start” on gas-powered vehicles, and China is unlikely to catch up, Shuo said. EVs have presented an opportunity to dominate new markets.
Another important benefit was energy security.
Unlike the United States, which is rich in fossil fuels, China relies on imported oil. Ilaria Mazzocco, an expert on China climate policy at the Center for Strategic and International Studies, said this dependence on other countries is a potential “geopolitical liability.” The advantage of EVs is that they can be powered by China’s abundant supply of private power generation.
Mazzocco told CNN that the government began implementing EV-friendly policies in earnest around 2009, providing cheap credit and research funding to manufacturers.
It was “a pretty big gamble,” she says, but the journey hasn’t been smooth. Years later, “it was considered something of a failure.”
But ultimately, thanks to consistent support from China’s municipal and central governments, advances in battery technology, and a host of highly competitive companies, including Tesla’s main rival, China-based BYD, The gamble paid off, she said.
The country now boasts a robust charging infrastructure and indigenous EV expertise, technology and materials. Millybilta says the company is producing a lot of cheap EVs that people actually want to buy.
The situation is very different in the United States, where gasoline is “extraordinarily cheap” and Americans prefer “absolutely huge vehicles,” so the economic case for EVs without subsidies is weak, he added.
With President Donald Trump inaugurated, the country is poised to further accelerate policies to promote electric vehicles and raise tariffs on Chinese EVs and battery materials.
As a result, the U.S. market is likely to become further disconnected from the rest of the world, “which will only make it more difficult for U.S. automakers to compete overseas,” Millibilta said.
Progress in electrifying China’s transportation system, including its vast high-speed rail network, is putting a brake on oil consumption, which had soared.
Ciaran Healy, an oil market analyst at the International Energy Agency, said gasoline demand is expected to fall by about 1% in 2024 and fall further this year, despite people’s incomes rising and car ownership increasing. He said there is a tendency to “This is unusual given China’s economic profile,” he told CNN.
Total oil demand may also be nearing its peak. China’s crude oil imports will fall by nearly 2% in 2024, the first annual decline in 20 years, excluding the coronavirus pandemic. The United States is one of China’s oil suppliers. According to the U.S. Energy Information Administration, China will become the second largest importer of U.S. crude oil in 2023.
The situation is complicated somewhat by the fact that EVs are reducing oil demand while another sector is raising oil demand.
China’s thriving petrochemical industry produces plastics and other industrial products and uses oil for food. But Kate Larsen, head of international energy and climate research at the independent economic research firm Rhodium Group, said: “This is nowhere near as fast as the cuts made by the transport sector.”
The IEA predicts that China’s oil demand will decline by the 2030s. “This is taking away one of the most important parts of global oil demand growth,” Healy said.
China was the biggest driver of global oil demand from 2013 to 2023. The average annual increase in China’s oil demand over the past decade was about 600,000 barrels per day. The IEA estimates that by 2024 there will be less than 200,000 barrels per day.
The IEA predicts that global oil demand will level off by the end of this decade and begin to decline in the 2030s, and that EVs will play a major role in this downward trend.
While countries like India are increasing their oil consumption, “no one seems to be able to replace China,” said Erica Downs, a senior fellow at Columbia University’s SIPA Center on Global Energy Policy.
China is also reshaping the global landscape through exports of EVs, of which a rapidly increasing proportion are destined for countries in the Global South, including Thailand and Brazil. The influx of low-cost Chinese EVs “could lead to a faster transition to electric in other countries as well,” Millibilta said.
China’s EV revolution is putting the country on track to become a clean energy powerhouse. But while China is deploying wind and solar power at an impressive pace, coal still accounts for the majority of the electricity used to charge EVs.
Even with this fossil fuel-intensive power grid, EVs still cause less global warming pollution over their lifetimes than gasoline cars, Millivirta said. However, given the carbon footprint of the manufacturing process, “it won’t be until a few years from now that EV sales start to have an impact on carbon emissions,” he said.
As China moves further into renewable energy, the climate impact of EVs will further decline. Rhodium predicts that the carbon pollution intensity of China’s power grid will fall by 60% between now and 2040. “That’s a huge number,” Rhodium’s Larsen said.
He said that by 2040, 100% of new cars sold in China could be EVs. “This really sets the stage for rapid reductions in transport emissions.”
There remains much uncertainty about what exactly will happen to oil demand in the coming years, both within China and globally. But experts say China’s rapid EV boom represents a seismic shift that could halt the country’s role as a driver of global oil demand and could lead to a redefinition of its role on the international stage. Point out that there is.
“China finds itself in a situation where its economic, geopolitical and climate interests converge,” Mazzocco said.
China’s clean energy transformation stands in sharp contrast to the United States, where President Donald Trump has vowed to end support for EVs and clean power.
“There’s already a big difference between the cars on the roads in China and the cars here in the United States,” Shuo said. There is a danger that the United States will become seen as a “fossil” in the history of car manufacturing, he added.
