Key facts
- China aims for electric and hybrid vehicles to account for 70% of passenger car sales by 2030.
- The share of new energy vehicles in passenger car sales was 54% at the end of last year.
- 40% of new commercial vehicle sales are targeted to be electric by 2030.
- EVs and hybrids represented 65% of China's passenger car sales in August.
- Sinopec forecasts an 8.9% drop in Chinese oil demand in 2026.
- Gasoline demand is projected to fall 8.7% and diesel 11.4% in 2026.
China has set ambitious targets for electric and hybrid vehicle adoption, aiming for them to constitute 70% of all passenger car sales by 2030. This represents a significant increase from the 54% share recorded at the end of last year. The new five-year plan for the automotive industry, compiled by multiple government agencies, also includes a goal for 40% of new commercial vehicle sales to be electric by 2030.
Analysts suggest the 70% target for passenger vehicles could be met even sooner than planned, as recent energy price shocks have accelerated the transition to electric vehicles. In August, EVs and hybrids already accounted for 65% of China's total passenger car sales, according to data from the local Passenger Car Association (PCA).
These aggressive EV targets are expected to continue reducing road fuel demand in China, which has been declining for two consecutive years. Sinopec, the world's largest refiner by capacity, anticipates a continued decrease, projecting an 8.9% drop in Chinese oil demand in 2026 compared to the previous year. The institute forecasts gasoline demand to decline by 8.7% and diesel consumption by 11.4% in the same period. The high oil prices have contributed to demand destruction and spurred EV adoption, impacting total oil demand even without considering supply disruptions in the Middle East.