Ed Ballard

Here's one way to think about how fast electric vehicles are eroding China's oil demand: Imagine France just stopped using the stuff entirely.

EVs displaced China's oil consumption to the tune of 1.5 million barrels a day in the second quarter, according to the International Energy Agency-1.5% of global demand, roughly France's share.

China, the biggest oil importer, weathered disruption in Middle Eastern flows thanks to gargantuan stockpiles and energy-conservation measures. But the world's largest EV fleet also helped. Sinopec, China's biggest fuel refiner, said demand for refined products fell 8.6% in the first half of 2026, due partly to EVs. The market impact is just beginning.

Most cars hitting China's roads now have batteries, but it will take decades for internal combustion engines, which are still entering the fleet, to be replaced. EVs, including plug-in hybrids, accounted for about 13% of China's cars at the end of 2025, the IEA says. China's government in July set a target of 30% of all vehicles by 2030.

Passenger vehicles have petroleum in the crosshairs. When it comes to diesel-burning trucks, the shift is earlier-stage, but unfolding startlingly fast.

"Every quarter of data that we get, I'm surprised," said Felipe Rodriguez, a heavy-vehicle expert at the nonprofit International Council on Clean Transportation.

In 2021, around 10,500 electric heavy trucks were sold in China-nearly the entire global market for this category, but not many relative to the millions of trucks on the road. Back then, the largest vehicles were consigned to the "hard to electrify" bucket. They need huge batteries, which need huge charging capacity. Liquefied natural gas, not batteries, was supplanting diesel.

But batteries improved, and the timesaving practice of battery swapping went from novelty to mainstream. Subsidies and penalties overcame corporate hesitancy. Charging stations with town-sized electricity requirements were feasible in a country where power demand was already growing fast.

The result: Sales of electric heavy trucks exceeded 230,000 last year, nearly 30% of overall sales, and their share reached 44% in June, ICCT says. They make up 4% of China's fleet, according to official data.

Exactly how much diesel those trucks are already displacing depends on how far they are driven, and whether they augment or replace existing vehicle fleets. Rodriguez's back-of-an-envelope estimate for avoided consumption (there are more of these lower down in the newsletter) is anywhere between 3.6 million and 11.6 million gallons a day, assuming a one-for-one substitution of battery trucks for diesel ones.

That would equate to between 86,000 barrels and 276,000 barrels of oil, assuming you could turn the whole barrel into diesel, which you can't (forgive the crude math). At the top end that's below 2% of China's oil consumption before the Iran war.

Rodriguez thinks the growth must stutter eventually. It is concentrated in short routes, such as between-factory round trips; most diesel is burned on long journeys where charging infrastructure is lagging. The government recently set a target to set up nearly 19,000 miles of zero-carbon trucking corridors to overcome the long-haul problem.

Meanwhile, other diesel-powered machines are electrifying, from forklifts to wheel loaders. Some 42 electric cargo ships were plying China's waterways last year-well below 0.1% of the market, ICCT says, but up from six vessels in 2023.

For Emma Li, an analyst at research firm Vortexa, the diesel switch-over is another reason to think China's oil demand won't recover to 2025 levels, even as refiners produce more petrochemicals to compensate for declining fuel sales.

The impact of EVs on diesel demand "will be even greater than the impact on gasoline," she said.

How much oil will China be consuming in 2030? 2040? Your guess is as good as mine. But if its economy already looks relatively insulated, give it time. Come the next crisis, such a large oil stockpile might even look like overkill.

This is an edition of the WSJ Climate & Energy newsletter, a weekly must-read of news, analysis and exclusive data focused on the intersection of business, money and climate, with coverage from across Dow Jones. If you're not subscribed, sign up here.

Get an inside look at how companies and individuals are tackling sustainability, free in your inbox three times a week. Sign up for WSJ Pro Sustainable Business.

This Week's Top Stories

How Trump's Venezuela oil plan came together. The deal announced last week would give Washington a direct financial stake in a company with rights to Venezuela's oil reserves-and tie the U.S. more closely to its unelected government. Here are some corporate winners and losers from the plan. One thing it's not is a quick fix for gas prices.

Europe, reeling from its searing-hot summer, could face a tough winter. A succession of heat waves withered crops, strained businesses and upended everyday life. Now, with cold weather approaching, Europe needs to stock up on natural gas-and its reserves are low.

From the Himalayas to the Alps, ice-melt imperils mountain communities. The devastating flood in Nepal is the latest example of the threat posed by unstable glaciers to mountain towns and villages.

The $2 Billion Brawl Over a Ruinous Wood-Pellet Trade (WSJ)

Trump Wants Refiners to Cut Gasoline Prices. It's Not Clear What They Could Do. (OPIS)

SpaceX Wants to Barge Into the Power-Equipment Business (Barron's)

Who Pays for Wildfire Damage? California Can't Agree (WSJ)

Quoted

Podcast

The Data Point

How rapidly are China's EVs sapping oil demand?

The IEA pegs the amount displaced by EVs at 1.5 million barrels a day in the second quarter, compared with less than 900,000 barrels a year earlier. The Centre for Research on Energy and Clean Air has an estimate of 19 million tons of oil across the quarter, which works out roughly the same. Kpler says 1.35 million barrels a day, including some diesel displacement by LNG trucks.

These calculations inevitably involve some simplifying assumptions. One option is to start with sales data, assume that new EVs replace similar vehicles burning gasoline or diesel, then plug in numbers for distance traveled and fuel efficiency.

The chart above comes from Rogan Quinn at Rhodium Group, who instead started with data on the electricity consumption of China's EV chargers (read more about his methodology here). That produced a rough estimate north of 2 million barrels a day.

About Us

WSJ Climate & Energy offers news, analysis and exclusive data focused on the intersection of business, money and climate. You'll find highlights from across Dow Jones, including The Wall Street Journal, Barron's, MarketWatch and Investor's Business Daily, plus data and analysis from Dow Jones Energy and its heritage brands: OPIS, McCloskey, PetroChem Wire and Chemical Market Analytics.

Today's email was written by Ed Ballard in London. Contact him at ed.ballard@wsj.com. Contact the team at climate@wsj.com.