When we talk about electric vehicles, the spotlight usually lands on passenger cars. But the biggest story for oil demand may actually be rolling on 18 wheels across China’s highways.

In the first half of 2025 alone, sales of new energy trucks in China surged 175% year-over-year, with electric trucks making up the overwhelming majority of that growth. It’s a transformation with global consequences: trucks account for about a third of China’s oil demand and nearly 3% of global oil consumption — most of it diesel.

A Structural Hit to Diesel

For decades, diesel has been one of the steadiest pillars of oil demand — powering freight, industry, and construction in ways that felt immune to the shifts in passenger cars. Now that assumption is under threat.

Chinese producers like Sany forecast that 70–80% of all new trucks sold in China will be electric by 2028. These aren’t speculative targets — they’re backed by tangible economics: electric trucks are already 10–15% cheaper to run than diesel over a million kilometers, with battery and charging costs falling fast.

Behind this push are aggressive subsidies (up to 95,000 yuan per truck) and a rapidly expanding charging network, with over 2,400 dedicated truck charging stations already deployed. That infrastructure advantage will be hard for other regions to ignore — or keep up with.

Battery Overcapacity: A Strategic Advantage

One piece that often gets overlooked is the role of China’s massive battery production capacity. By some estimates, China is on track to control around 70% of global battery supply by 2030. Far from being a problem, this overcapacity is actually fueling affordability: oversupply has pushed battery costs to record lows, making it economically viable to electrify heavy trucks, buses, and industrial fleets — not just cars.

This is not just about local freight. Chinese manufacturers are targeting emerging markets from Southeast Asia to Africa with low-cost electric trucks and the batteries to power them. It’s an industrial strategy that ties together mining, refining, battery cell production, vehicle assembly, and the build-out of the charging ecosystem — creating a supply chain loop that is hard to compete with.

For diesel, the effect is clear: every new battery pack rolling off the line and onto a truck means one more long-haul route that no longer needs a barrel of oil.

Refiners Pivot to Petrochemicals

China’s refiners aren’t standing still as diesel’s dominance wanes. Major players like Sinopec and PetroChina are accelerating investments in mega-complexes that convert more crude oil into petrochemicals — turning barrels that once fueled trucks into feedstocks for plastics, textiles, and advanced materials.

This pivot isn’t a hedge — it’s a structural shift. As the refining system decouples from road fuel, the “chemical barrel” becomes the new “fuel barrel.” For global refiners that lack this integration, the risk is clear: being stuck with assets tied to a shrinking market.

The real wild card is how fast this pattern could spread. If China’s electric truck model gains traction in other developing regions — think Asia, Africa, Latin America — the ripple effect on diesel demand could show up sooner than the conservative forecasts suggest.

What This Means for Oil Markets

Peak oil demand has been a long-running debate. The rise of electric cars moved the conversation forward — but the rise of electric trucks could accelerate it further.

Some forecasters have already pulled their “peak oil” timelines forward from the 2030s to the late 2020s. If electric trucks displace even a fraction of the 3 million barrels per day that China’s freight sector burns today, the implications for global diesel margins, refining strategy, and even petrochemical feedstock balances could be very significant.

Sometimes the biggest disruptions happen in plain sight — in this case, hidden behind the trucks that deliver nearly everything we use every day.

Read More for Further Insights

✅ IEA Global EV Outlook 2025 — How electric trucks and cars are changing oil demand assumptions.

✅ Global Energy Monitor: China’s Wind & Solar Boom — The scale of China’s energy transition.

✅ IRENA: Green Hydrogen and Commodities Trade 2025 — Context on China’s broader clean energy industrial strategy.

✅ C-MACC: From Fuel Barrel to Chemical Barrel — Deep dive into how refiners are rebalancing portfolios.