Dominance in the Chinese Domestic Market
The Chinese electric vehicle market is demonstrating phenomenal growth:- Nearly 50% of new passenger car sales in China are electric vehicles and plug-in hybrids, showcasing an enormous leap from 6% in 2020.
- Approximately 14% of the total passenger vehicle fleet in China (42 million out of 300 million) now consists of electric vehicles, up from less than 2% in 2020.
- This rapid growth is beginning to apply pressure on gasoline demand in the country, which could have serious consequences for the oil industry and oil exporters, including Russia.
- Government support, infrastructure development, and technological innovations have become key factors in this rapid growth.
Global Influence
China is becoming a leader in the global electric vehicle market:
- One out of every two electric vehicles sold worldwide is sold in China, highlighting the scale of the influence of the Chinese market.
- Half of all electric vehicles on the roads globally are in China, underscoring the country's dominant position.
- According to the International Energy Agency (IEA), global electric vehicle sales could reach 17 million units by the end of 2024.
- Chinese manufacturers are actively investing in research and development, allowing them to create more efficient and affordable electric vehicle models.
Expansion into International Markets
Chinese electric vehicle manufacturers are actively entering the global arena:- BYD, a leader in Chinese electric vehicle manufacturing, sells over 1 million electric cars per quarter, surpassing Tesla's figures.
- BYD is already exporting its products to 95 countries, demonstrating the global ambitions of Chinese manufacturers.
- The opening of BYD's production facility in Uzbekistan showcases a strategy of localization in key regions.
- Other Chinese brands, such as NIO, Xpeng, and Li Auto, are also actively expanding their presence in international markets.
- Chinese companies are investing in the development of charging station networks and service centers abroad, creating the necessary infrastructure.
Impact on the Russian Market
Trends in the Chinese automotive industry are significantly impacting the Russian market:- More than 90% of cars imported into Russia come from China, making China a key player in the Russian automotive market.
- Over the past two years, the electric vehicle fleet in Russia has quadrupled, demonstrating a growing interest in this technology.
- From January to April 2024, China exported 237,100 passenger cars to Russia, which is 37% more than in the same period last year.
- Russian consumers are increasingly choosing Chinese electric vehicles due to their affordability and technological advancements.
- The development of infrastructure for electric vehicles in Russia is becoming a priority, stimulating further market growth.
Development Prospects
Experts predict continued growth in the electric vehicle market:- By 2030, global electric vehicle sales are expected to exceed 40 million units per year.
- It is anticipated that the share of electric vehicles in the market could reach 45% in China, 25% in Europe, and over 11% in the U.S. by the end of 2024.
- Further decreases in battery costs are expected to make electric vehicles even more accessible.
- The development of fast charging technologies and increased driving ranges of electric vehicles will promote their wider adoption.
- Tighter environmental regulations in many countries will provide additional incentives for the transition to electric vehicles.
Comments from Sergei Tereshkin
Sergei Tereshkin, General Director of AO "UK Open Oil Market", comments on the situation: "The rapid growth in the popularity of Chinese electric vehicles in the global market, including Russia, marks the beginning of a new era in the automotive industry. For the oil sector, this presents a serious challenge that requires strategic adaptation. We are observing how the increasing share of electric vehicles is beginning to affect the demand for traditional fuels even in China – a key market for Russian oil. For Russia, this opens both opportunities and risks. On one hand, the availability of Chinese electric vehicles may accelerate the transition to environmentally friendly transport in our country, potentially reducing dependence on the import of internal combustion engine vehicles. On the other hand, this puts pressure on the oil industry, demanding diversification and innovation. In the short term, the growth in car sales, including Chinese vehicles, may temporarily increase fuel demand. However, in the long run, the transition to electric vehicles will inevitably lead to a decrease in the consumption of traditional fuels. Oil companies should closely monitor these trends and develop strategies to maintain business resilience in changing market conditions. It is important to note that the success of electric vehicles in Russia will depend not only on their accessibility but also on the development of the corresponding infrastructure – such as charging stations and service centers. This opens new investment opportunities and business development in related fields. As a representative of the oil industry, I see the need for active adaptation to new realities. This may include investments in alternative energy sources, the development of technologies to improve the efficiency of oil product usage, and the exploration of new markets. The transformation of the automotive industry is not a threat, but a stimulus for innovation and development in the energy sector."
