In terms of purely purchasing power, the China’s dominance in the electric vehicle market It has no comparison: the country bought one electric car out of every two that were sold during 2021, and will continue to be, by far, the leading country in sales of vehicles of this type for a few more decades. However, it is not the same to speak of passenger cars than of Commercial Vehiclesor if?
Electric commercials, such as medium and heavy duty trucks, are becoming increasingly popular in many parts of the world, especially in urban delivery tasks, and China is no exception. According to a new report published by Bloombergsales of battery-powered light commercial vehicles increased from less than 1% in 2020 to around 10% of sales of all segments this yearand this could start to have an impact on global oil demand.
According to the publication, the trend shows no signs of stopping: more and more heavy-duty vehicles in the People’s Republic are being purchased with electric power, and this will slowly expand to larger trucks as they become competitive and start arriving in the Asian giant. It’s not like there are currently many mid-sized or large electric vehicles available for sale in China, but forecasts suggest that will change very soon as local manufacturers get in on the action.
In the last biennium, China has been experimenting to identify the right mix of economic, technological, and political levers in order to drive widespread adoption of zero-emission vehicles in business segments. And the tipping point, which sees the beginning of this wide adoption, may now have arrived. Zero emission semi-trailers, today in China, have a maximum of 3.4% market share, and again the trend is expected to continue and accentuate.
Although a large part of the industry believes that hydrogen fuel cells (FCEV) are the long-term solution to reduce carbon emissions in the commercial vehicle sector, data from China seems to show that pure electric vehicles have a majority share versus alternative fuel models by a wide margin, according to analysis of Bloomberg. Just look at the fact that 22% of vehicles sold in China are battery-powered, the highest percentage in the world.
Even in long-distance transportation, long considered difficult for electric vehicles to crack given their limitations in range and recharging times, they now have a larger share in China due to a widespread commitment to establish battery exchange facilities. The data says that last year, the number of battery exchange stations that were installed in the country increased by 318% to help with the deployment of new commercial fleets.
All this has implications on a global scale, since it indicates that the conventional wisdom, which maintains that the demand for commercial vehicles will maintain the need to use fossil fuels with constant growth in the medium term, may need to be revised soon. Bloomberg predicts that said global demand for oil in road transport will peak in 2027but if the situation in China continues (and is replicated in other markets), this could happen much sooner.
Source: Boomberg
