China's new energy vehicle sales are expected to surpass gasoline vehicles for the first time in 2025

According to the Financial Times website on December 26th, sales of new energy vehicles in China are expected to surpass those of gasoline vehicles for the first time by 2025. This will be a historic turning point, allowing the world's largest automotive market to achieve this many years earlier than its Western competitors

According to the latest estimates provided by investment banks and research institutions to the Financial Times, China is expected to surpass international forecasts and previously set targets, with domestic sales of new energy vehicles (including pure electric vehicles and plug-in hybrid vehicles) expected to exceed 12 million units by 2025. This number will be more than twice the sales volume in 2022

At the same time, traditional electric vehicle sales are expected to be below 11 million units in 2025, a decrease of nearly 30% compared to sales in 2022

According to the report, it is expected that sales growth in Europe and the United States will slow down during the same period, reflecting the traditional automotive industry's reluctance to embrace new technologies, uncertainty in government subsidies, and rising protectionist sentiment

Robert Liu, head of the Asia Pacific Renewable Energy Research Department at Wood Mackenzie Consulting, stated that this milestone will demonstrate China's success in domestic technology development and in ensuring the global supply chain for key resources needed for electric vehicles and their batteries. This industry scale means that manufacturing costs have been significantly reduced, and prices for consumers have also decreased

Robert Liu said, "They want everything to be electrified. At this point, no other country can compare to China." Although China's sales of new energy vehicles are not growing as rapidly as in the previous two years, the latest forecast shows that Beijing's goal set in 2020- to have new energy vehicles account for 50% of car sales by 2035- will be achieved 10 years earlier than originally planned

These industry forecasts were provided to the Financial Times by two investment banks, UBS and HSBC, as well as two research institutions, Morningstar and Wood Mackenzie Consulting

According to data from Shanghai Moutuo Business Consulting, the Chinese new energy vehicle market is expected to grow by nearly 40% in 2024 compared to 2023, while the share of foreign brands is expected to drop to a low point of about 37%, a significant decline from 2020

According to the report of Nihon Keizai Shimbun on December 29, some people believe that China's crude oil demand, the world's second largest economy, will peak faster than expected by the industry. In the field of passenger cars, a structural transformation driven by the government is underway, with monthly sales of new energy vehicles, including electric vehicles, surpassing those of gasoline vehicles. The trends in China will influence the prospects of the crude oil market

According to reports, as of October, China's crude oil imports have been lower than the same period in 2023 for six consecutive months, and the cumulative imports from January to November have decreased by about 2% compared to the same period in 2023. The import volume for the whole year of 2024 may also be lower than that of 2023

The demand for crude oil depends on economic cycles in the short term, and on structural changes such as energy conservation progress in the medium to long term. Kieran Tompkins, an economist at Kaitou Macro, believes that China's crude oil demand is entering a period of "structural weakening". Li Xuelian, a senior researcher at the Marubeni Institute for Economic Research in Japan, also stated that "it may peak soon"

According to reports, if China's demand for crude oil reaches its peak in the near future, it means that its economy will break free from dependence on crude oil faster than international institutions predict

The report points out that in China, new energy vehicles such as electric vehicles are rapidly becoming popular. This will greatly affect the demand for crude oil. In mid-2024, the proportion of monthly sales of new energy vehicles in passenger car sales has surpassed that of gasoline vehicles. At the same time, the Chinese government is working with the public to improve the charging facilities used for new energy vehicles, with 11.43 million completed by the end of September 2024