China’s Electric Vehicle Boom to Cut Oil Demand by 2030
China’s “breakneck” embrace of electric vehicles (EVs) is set to reduce the country’s oil demand by 2030, according to a forecast by the International Energy Agency (IEA). In 2023, Chinese motorists purchased two out of every three EVs sold worldwide, driving 40% sales growth in China, while the European market stagnated and American demand slowed.
The IEA predicts that China’s total oil demand will ease to 16.7 million barrels per day in 2030, down from 18.1 million in 2023, despite continued economic expansion. “Rapid deployment of transport technologies substituting for oil-based fuels is decisively altering the relationship between economic growth and oil,” the IEA stated in its annual oil market survey.
Beijing’s aggressive policies have propelled the Chinese EV market at an incredible pace, with state-subsidized giants like BYD, Geely, and Leapmotor producing more EVs than the market can absorb. This has triggered a price war, with discounts of up to 20% on popular models. The Ministry of Industry and Information Technology recently intervened, summoning manufacturers to a meeting to address the overcapacity issue.
The surge in Chinese EV production has raised concerns about the potential dumping of excess stock in export markets. In the first four months of 2025, EVs comprised one-third of China’s total vehicle exports, up from one-quarter in the previous two years. BYD outsold Tesla in Europe for the first time in April, highlighting the growing competitiveness of Chinese EV manufacturers.
However, European consumers remain hesitant to adopt EVs, citing high prices, charging infrastructure concerns, and range anxiety. The IEA noted “stagnant growth” in EV sales in Europe and a modest 10% increase in the US, down from 40% growth in 2023. “In many advanced economies, EVs have struggled to appeal beyond urban, environmentally-conscious motorists,” the agency observed.
Globally, the shift to EVs is expected to reduce oil demand by 5.4 million barrels per day over the next five years, with China accounting for half of this reduction. In contrast, the US is projected to consume more oil in 2030 than it does currently, with demand rising by nearly 6% to 20 million barrels per day.
Global oil demand is expected to increase by 2.5 million barrels per day from 2024 to 2030, reaching a “plateau” of approximately 105.5 million barrels per day. However, worldwide production capacity is set to rise by 5.1 million barrels per day to nearly 115 million, led by Saudi Arabia and the US.
