NEW DELHI : China’s rapid adoption of electric vehicles is accelerating the country’s shift away from fossil fuels, with oil displaced by EVs rising 42 per cent year-on-year to 33.7 million tonnes of oil equivalent (Mtoe), or 1.4 million barrels per day, in the first half of 2026, according to a Jefferies report.

The report, citing a study by the Centre for Research on Energy and Clean Air (CREA), said the fossil fuel displaced by EVs during the first six months of 2026 was equivalent to 6 per cent of China’s total crude oil imports in 2025, which stood at 579 million tonnes. It added that oil displaced by EVs has nearly tripled from 11.6 Mtoe, or 0.5 million barrels per day, in the first half of 2023, highlighting the growing impact of electric mobility on the country’s energy consumption.

According to the report, the shift has been driven by the continued rise in new energy vehicles (NEVs), including battery electric vehicles and plug-in hybrids, in China’s passenger vehicle market.
Jefferies said NEV sales accounted for a record 63 per cent of total passenger vehicle sales in June 2026, up from 33 per cent in January 2024, reflecting the rapid pace of electrification in the world’s largest automobile market.

The report also referred to the International Energy Agency’s (IEA) Global EV Outlook 2026, which reached a similar conclusion on the impact of electric vehicles on oil demand.

According to Jefferies, the IEA estimated that EVs displaced around 1 million barrels per day of oil demand in China in 2025 and projected this could increase to 2.7 million barrels per day by 2030, suggesting the country’s transition towards cleaner mobility is expected to further reduce fossil fuel consumption in the coming years.

The report said the continued increase in EV adoption is reshaping China’s energy demand profile, with higher penetration of new energy vehicles expected to play an increasingly important role in reducing oil consumption and supporting the country’s transition towards cleaner sources of energy.