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China Oil Use Seen Peaking in 2025 as EVs and Rail Take Over

  • China won’t follow U.S. highway driving model: Morgan Stanley
  • Nation accounts for more than a third of global demand growth
Updated on

The country that’s driven global oil demand since the turn of the century may hit the brakes sooner than expected as travelers shift toward electric cars or even forgo the open road in favor of trains.

China’s oil consumption will peak in 2025, five to eight years earlier than market consensus, according to Morgan Stanley analysts including Andy Meng. The reversal will be driven by a transportation model unique to China: While most countries moving up the economic ladder show continued growth in oil demand from increased driving, mass-adoption of electric vehicles and high-speed rail in China will drastically reduce gasoline use, the bank said.