Electric trucks are what brings China's oil demand to a peak
Heavy trucks are 15% of vehicles and half of road fuel consumption. Electric penetration went from 8.6% to 26% in eighteen months. That single shift is why the peak oil forecast keeps moving forward.
Electric truck sales in China rose 175% year on year in the first half of 2025, reaching roughly a quarter of all truck sales. At the same time, forecasts for China's peak oil demand moved forward to late 2025 or early 2026. These are the same fact viewed twice.
Why trucks decide the oil question
Heavy trucks are about 15% of vehicles and roughly 50% of road transport fuel consumption. Transport accounts for around 35% of China's oil demand and is electrifying fastest.
The movement is quick. Diesel fell to 51% of total truck sales in the first half of 2025, from 75% in 2023. Electric truck penetration reached 26%, up from 8.6% in 2024. Diesel consumption in heavy transport is already declining; petrol demand flattened in 2024.
On that basis the peak oil forecast is credible. It does not depend on passenger vehicle electrification, which is further along but matters less per unit — it depends on the vehicles that burn the most.
The growth looks genuine
A fair question is whether these figures are inflated the way passenger EV numbers were by zero-mileage used cars — vehicles registered but never driven.
The evidence suggests limited contamination. Some practices of that kind appeared in new energy light trucks, particularly logistics vehicles, mainly to capture subsidies ahead of policy changes. In heavy trucks the growth appears substantively real, driven by:
- Replacement subsidies — old-for-new policies paying up to ¥30,000 more for electric than combustion
- Operating incentives — 85% toll discounts for electric trucks using ETC, and weight exemptions up to four tonnes for zero-emission vehicles
- Cost convergence — battery costs down 40% over three years, narrowing the price gap
- Usable infrastructure — ultra-fast charging and battery swapping deployment, including CATL's plan for 300 swap stations
Fleet operators buy on total cost of ownership. When tolls, weight allowances and energy costs all favour electric, the purchase follows without much persuasion.
The industry losing money doing it
Roughly 45–50 manufacturers actively produce electric trucks, around 45 of them in heavy duty — traditional producers including FAW Jiefang, Sinotruk, Dongfeng, SANY and XCMG, alongside BYD, Geely and other new energy specialists.
Very few make money. Batteries remain 30–40% of vehicle cost. Price competition has been severe: a 400kWh heavy truck fell from ¥700,000 to ¥450,000 during 2024, and to ¥400,000–450,000 within twelve months. Industry estimates suggest only about one in seven Chinese EV brands across all categories will be profitable by 2030, with heavy truck margins expected to stay negative until 2026–2027 at best.
Overcapacity is explicit. Production capacity exceeds demand by 40–50%, with utilisation at around 48% — 45+ manufacturers competing for a market of roughly 150,000–200,000 units in 2025, while new entrants continue building 10,000–20,000 unit plants. Inventory is accumulating.
Consolidation is under way: the top five manufacturers controlled 71% of sales between January and July 2025. Smaller players without technology or scale will not survive it.
Foreign manufacturers are present but marginal — Volvo is the only non-Chinese brand in the top ten, with Daimler through joint ventures and MAN and Iveco through partnerships, all concentrating on premium segments.
Charging is the binding constraint
Around 50,000 specialised heavy-duty truck charging stations existed nationwide as of Q3 2025. Against sales of 76,100 units in the first half and a projected 200,000+ for the year, maintaining even a 1:5 vehicle-to-charger ratio requires over 3,000 new heavy-duty points a month.
Technology is arriving — ultra-fast chargers delivering 100 km of range in six minutes, swap stations completing in five, cross-provincial fast-charging corridors, 400kW+ chargers at logistics hubs and ports. But coverage is uneven, with third- and fourth-tier cities and highway service areas poorly served, which constrains long-haul adoption specifically.
Battery swapping has found its niche in mining and port operations, where routes are fixed and duty cycles predictable.
Where the policy goes next
Measures not yet formally announced but indicated: continued support for adoption in key sectors despite general subsidy reduction; minimum electric penetration requirements for port, airport and urban logistics fleets by 2027–2030; mandatory charging infrastructure at commercial zones, logistics parks and highways; and emissions standards beyond China VIb.
The provincial lead is already visible — Shanxi banned diesel trucks from January 2026, and more provinces are expected to follow in 2027–2028.
The export map
| Region | Segment | Main players |
|---|---|---|
| Southeast Asia | Light and medium duty | BYD, JAC, Foton |
| Europe | Heavy-duty long haul | SANY, XCMG, Geely |
| Australia | Mining and heavy transport | XCMG, SANY |
| Middle East | Construction and logistics | FAW, Dongfeng |
| South America | Urban distribution | BYD, JMC |
Europe is targeted with heavy-duty long-haul specifically — the hardest segment, and the one where European manufacturers have the strongest position. Local assembly partnerships are being explored to work around trade barriers.
Autonomy is further along here than in passenger vehicles
China operates 2,108 autonomous trucks, around 70% of the global total. Level 3 is in commercial use in closed environments — ports, mines, logistics parks — with 56+ autonomous trucks working in northwest China mines and fully autonomous fleets at Shanghai and Shenzhen ports. Cross-provincial autonomous convoys have been completed.
Pony.ai and SANY have a joint venture on L4 trucks with first commercial deployment planned for 2026; DeepWay is focused on L4 heavy trucks for long-haul. Most deployment through 2027 will remain closed-loop, with commercial long-haul expected 2028–2030. Autonomous trucking is projected to generate ¥854 billion in revenue in China by 2030.
Closed environments are the right place to start: fixed routes, controlled access, and an operator who owns both the vehicle and the road.
What this means if you are on the European side
European truck makers are being targeted in their strongest segment. SANY, XCMG and Geely are aiming at heavy-duty long haul in Europe, backed by a domestic price war that has driven costs down 40% in a year. The competitive pressure will arrive having been stress-tested in the harshest market in the world.
The charging gap is a European opportunity now, not later. China needs 3,000+ heavy-duty charging points a month and has structural coverage gaps. European expertise in high-power charging, grid integration and depot electrification has a live market.
Overcapacity at 48% utilisation means export pressure. 45 manufacturers, half-idle plants and negative margins produce exactly one behaviour: aggressive pricing abroad. Anticipate it rather than treating it as a surprise when it arrives.