China's EV boom cuts fossil fuel use; oil displaced rises 42% in H1 2026: Jefferies
New Delhi, August 1
China's rapid adoption of electric vehicles is accelerating the country's shift away from fossil fuels, with oil displaced by EVs rising 42 per cent year-on-year to 33.7 million tonnes of oil equivalent, or 1.4 million barrels per day, in the first half of 2026, according to a Jefferies report.
The report, citing a study by the Centre for Research on Energy and Clean Air (CREA), said the fossil fuel displaced by EVs during the first six months of 2026 was equivalent to 6 per cent of China's total crude oil imports in 2025, which stood at 579 million tonnes. It added that oil displaced by EVs has nearly tripled from 11.6 Mtoe, or 0.5 million barrels per day, in the first half of 2023, highlighting the growing impact of electric mobility on the country's energy consumption.
According to the report, the shift has been driven by the continued rise in new energy vehicles (NEVs), including battery electric vehicles and plug-in hybrids, in China's passenger vehicle market.
Jefferies said NEV sales accounted for a record 63 per cent of total passenger vehicle sales in June 2026, up from 33 per cent in January 2024, reflecting the rapid pace of electrification in the world's largest automobile market.
The report also referred to the International Energy Agency's (IEA) Global EV Outlook 2026, which reached a similar conclusion on the impact of electric vehicles on oil demand.
According to Jefferies, the IEA estimated that EVs displaced around 1 million barrels per day of oil demand in China in 2025 and projected this could increase to 2.7 million barrels per day by 2030, suggesting the country's transition towards cleaner mobility is expected to further reduce fossil fuel consumption in the coming years.
The report said the continued increase in EV adoption is reshaping China's energy demand profile, with higher penetration of new energy vehicles expected to play an increasingly important role in reducing oil consumption and supporting the country's transition towards cleaner sources of energy.
— ANI
Reader Comments
This is impressive but let's not forget that China's grid still runs heavily on coal. So while they're reducing oil imports, their overall carbon footprint might not be as clean as it seems. Still, it's a step in the right direction for energy security.
1.4 million barrels per day displaced—that's more than many countries consume entirely! China's scale is just unmatched. We need similar policy push in India. FAME subsidies are good, but we need more local battery manufacturing and charging stations in Tier-2 and Tier-3 cities.
Honestly, I'm a bit jealous. We have the technology and the talent in India, but our EV adoption is still slow. The upfront cost, range anxiety, and lack of charging infrastructure are big hurdles. The government should look at China's model of subsidizing EVs heavily and building charging networks rapidly.
Great to see the numbers backing up the EV transition. The IEA projection of 2.7 million barrels per day by 2030 shows this is not a passing trend. For India, this is a wake-up call—our oil imports are a strategic vulnerability. We must push electrification not just for climate, but for national security.
While China celebrates this, let's not forget about the environmental cost of lithium mining and battery disposal. EV is not a silver bullet. But yes, for our energy independence, we should definitely switch. Just need a proper recycling policy in place.
The pace is incredible
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