The transformation of Beijing's bustling streets into quiet avenues filled with electric vehicles (EVs) symbolizes a broader shift across China. Once dominated by the cacophony of traffic, the city now hums with the subtle presence of eco-friendly cars, marked by their distinctive green license plates. This change is not confined to Beijing; visitors to many of China’s major urban centers are struck by the serenity brought about by this technological leap.

China’s embrace of EVs signifies more than just environmental progress. The country has become a global leader in clean technology, challenging traditional automotive markets. According to data from UK-based Rho Motion, over half of new car sales in China are now electric, with 2023 seeing a nearly 40% surge in EV purchases. Analysts predict that this trend will lead to the near-complete phasing out of gasoline-powered vehicles in the coming decades. This transition is not only altering local landscapes but also reshaping global oil markets, potentially signaling the peak of oil demand in one of the world’s largest importers.

The roots of China’s EV success trace back nearly two decades. Initially lagging behind legacy automakers in the US, Japan, and Europe, China saw EVs as an opportunity to dominate a burgeoning market. Energy security played a crucial role: unlike fossil fuel-rich nations, China relied heavily on imported oil, a geopolitical vulnerability. By promoting EVs powered by domestically generated electricity, China mitigated this risk. Government support, including favorable policies and funding for research, laid the foundation for this transformation. Despite early setbacks, consistent backing from both city and central governments, coupled with advancements in battery technology and competitive domestic manufacturers like BYD, ensured the success of this ambitious project.

The implications of China’s EV revolution extend far beyond its borders. As the world’s largest oil importer, China’s declining demand is reverberating through global markets. Oil consumption in the transportation sector is plummeting, even as incomes rise and car ownership increases. While other sectors, such as petrochemicals, still rely on oil, they cannot match the reductions achieved by the transportation industry. Experts predict that China’s oil demand will start declining by the 2030s, significantly impacting global demand growth. Additionally, China’s growing EV exports to countries in the Global South could accelerate electrification worldwide, further reducing reliance on fossil fuels.

China’s rapid transition to clean energy underscores a convergence of economic, geopolitical, and environmental interests. Even with a grid still reliant on coal, EVs produce less pollution over their lifetime compared to gas-powered cars. As China continues to expand its renewable energy capacity, the environmental benefits of EVs will only increase. By 2040, EVs could account for 100% of new car sales in China, setting the stage for a dramatic reduction in transportation emissions. This shift not only positions China as a leader in sustainable development but also highlights the importance of aligning national policies with global climate goals. The contrast with countries like the US, where support for clean energy faces political challenges, emphasizes the transformative potential of forward-thinking policies.