China- China is moving from diesel to electric heavy trucks far faster than expected, a shift that could significantly affect global oil and gas markets. Electric trucks made up 22% of new heavy-truck sales in early 2025—up from 9.2% a year earlier—and could reach 46% by year-end and 60% in 2026, according to Commercial Vehicle World and BMI.
Heavy trucks are major polluters, producing a third of transport-related CO₂ emissions in 2019. Decarbonizing them has been difficult because large batteries reduce cargo capacity, and LNG has been viewed as a temporary cleaner option.
But China’s freight sector is changing quickly. Diesel demand is leveling off, and analysts say it may fall sooner than expected as electric trucks now outsell LNG models. Diesel use dropped 11% in June 2024—the biggest decline in three years—partly due to the switch to electric and LNG vehicles.
Electric trucks remain pricier than diesel or LNG but offer lower operating costs, saving owners 10–26% over a vehicle’s lifetime. China has also encouraged adoption with subsidies of up to about $19,000 for trading in old trucks, while major logistics hubs have built fast-charging stations and battery-swap networks. CATL plans swap stations covering most of the nation’s expressways.
The rise of electric trucks is already cutting oil demand by over 1 million barrels per day, Rhodium Group estimates. Meanwhile, LNG truck sales in China peaked in 2023–2024 and have since declined, raising questions about LNG’s long-term role in transport.
China’s coming emissions rules will make it increasingly difficult for manufacturers relying on fossil fuels alone. LNG’s climate benefits are also limited by methane leakage, and modern diesel engines now match LNG in air-quality performance.
As domestic adoption surges, China is positioning itself to dominate global electric truck exports. Shipments to the Middle East, North Africa, and Latin America have grown rapidly, and companies like Sany and BYD are targeting Europe and the U.S. BYD is already building an electric truck and bus factory in Hungary ahead of Europe’s 2040 emissions targets.
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