China is at the forefront of a global automotive revolution, with bold plans to transform its vehicle market by 2030. The country aims to make electric and hybrid vehicles the norm, while also paving the way for widespread adoption of autonomous driving technology. These ambitious targets are set to reshape not only China’s domestic market but also the global automotive landscape.
The Chinese government’s commitment to this transition is evident in its comprehensive roadmap for the automotive sector. This strategy encompasses both passenger and commercial vehicles with a clear focus on reducing reliance on traditional fossil fuels and enhancing the country’s position in the global market.
Accelerating the shift to electric vehicles
China’s target for electric and hybrid vehicles to account for 70% of passenger car sales by 2030 is part of a broader initiative to reduce demand for road-transport fuel. This goal is supported by several government agencies and is expected to have a significant impact on the automotive sector. Additionally, the plan aims for electric vehicles to make up 40% of new commercial vehicle sales by the same deadline.
The adoption rate of these vehicles is already surpassing expectations. Recent fluctuations in fuel prices have encouraged consumers to switch more quickly to electric alternatives. Data from the Passenger Car Association shows that these vehicles accounted for 65% of total passenger car sales in August, a substantial increase from the 54% share recorded at the end of last year. This accelerated adoption rate suggests that China may reach its targets earlier than planned.
Implications for fuel demand and industry forecasts
The shift towards electric and hybrid vehicles is contributing to a multi-year decline in road-transport fuel demand in China. This trend has been intensified by energy price volatility linked to conflicts in Iran. State-owned refineries are preparing for a future where fuel demand levels off or falls further.
Sinopec the world’s market leader in refining capacity, expects a sharp drop in oil demand. Its research institute predicts that total oil demand in 2026 will fall by 8.9% compared with the previous year. This forecast includes an expected 8.7% decline in petrol consumption and an even steeper 11.4% decline in diesel consumption. These decreases are driven by a combination of high oil prices and the rapid rise of electric mobility, which suppresses demand regardless of supply disruptions from the Middle East.
China’s vision for autonomous driving
China’s industry ministry has unveiled a roadmap to strengthen its smart electric vehicle industry, targeting large-scale deployment of autonomous-driving vehicles by 2030. This initiative aims to enhance the country’s global influence in the automotive sector and promote the development of multiple automakers that rank among the world’s top 10 by sales.
The ministry plans to reinforce the auto sector’s role as an economic pillar, with autonomous-driving vehicles achieving higher safety levels than human drivers. To support this vision, China will tighten rules on vehicle production, road safety, self-driving, and software upgrades. The ministry also plans to encourage deeper cooperation between Chinese and foreign companies in vehicle and key-component research, investment, and global market expansion.
Chinese automakers are already making significant strides in the global market. In the first half of this year, six Chinese automakers accounted for more than 60% of global sales of electrified vehicles. This rapid expansion is driven by price competitiveness and multi-brand strategies, despite a slowdown in China’s domestic economy. The global market share of Chinese automakers is expected to continue growing, with policy support and expanded incentives playing a crucial role.
