Rapid EV uptake in the US and China puts pressure on gas sales

The annual rate of growth in transportation fuel consumption may not happen this year, as electric vehicle sales in China and the US are picking up.

Instead of the 700,000 barrels per day last year, in 2024 the growth in oil consumption is pegged at 340,000 barrels per day (bpd), or half of that historical pace of growth.

According to Wood Mackenzie analysts, "for this year Chinese demand will grow by only 10,000 barrels per day (bpd), due to higher EV uptake."

The International Energy Agency predicts that the whopping 45% of vehicles sold in China this year will be electric. Europe will hit the 25% threshold, while in the US electric cars will reach 11% penetration.

That is a huge amount of deferred purchases of gas-powered vehicles, with the respective drop in demand for gasoline.

China, as the world's largest driver of transportation fuel demand growth in previous years, is now reaching peak oil demand, while the proliferation of Tesla vehicles made the US pass that point already.

In the pre-pandemic era, the US consumed 392 million gallons per day in 2018, an absolute record. Since then, however, demand has been continuously dropping to hit 376 million gallons per day in 2023, and is only expected to go down as electric vehicles sales grow.

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