Penetration rate for EVs could hit 80%

China's electric vehicle penetration rate will continue to rise over the coming years as the country accelerates its transition toward a low-carbon economy and cements its leadership in green mobility, an industry expert said recently.

Speaking at the Asia Pacific Petroleum Conference (APPEC), Wang Pei, deputy general manager of Sinopec's Economics &Development Research Institute, expects the domestic EV adoption rate will reach between 75 and 80 percent by 2030, even as the pace of expansion naturally moderates as the market matures.

"China is already the world's largest EV market," Wang said, adding that the national EV penetration rate reached 65 percent in July — encompassing both battery EVs and plug-in hybrid varieties — up from 53 percent during the same period last year and surging from a mere 5 percent in 2020.

The rapid electrification of the transportation sector is reshaping China's energy consumption architecture. According to the institute's estimates, new energy vehicles are projected to displace approximately 56 million metric tons of domestic oil demand this year, equivalent to 1.2 million barrels per day.

"This accounts for nearly 15 percent of China's total refined oil demand," Wang said, adding that roughly two-thirds of the replaced fuel came from gasoline-powered vehicles and one-third from diesel vehicles.

The momentum aligns with national initiatives outlined by the National Development and Reform Commission and the Ministry of Industry and Information Technology, which have rolled out coordinated measures to expand public charging infrastructure, encourage rural EV adoption and advance the nation's "dual-carbon" goals — peaking carbon emissions before 2030 and achieving carbon neutrality before 2060.

Meanwhile, the structural transformation of domestic transport has created fresh avenues for industrial upgrading across the broader petrochemical value chain. Reflecting a shift toward higher-value manufacturing, profits in China's chemical sector surged by more than 50 percent year-on-year in the first seven months, according to the institute's report.

As transport fuel demand peaks, traditional refiners are shifting their strategic focus from producing motor fuels to advanced chemicals and high-end synthetic materials, effectively turning the challenge of electrification into an opportunity for high-quality petrochemical-based industrial growth.

To adapt to the shifting landscape, State-owned energy giants like Sinopec are also transforming thousands of traditional gas stations into integrated energy service stations. These upgraded hubs now offer fast-charging, battery swapping and hydrogen dispensing alongside conventional refueling, effectively future-proofing their retail networks while supporting the country's NEV ecosystem.

Supported by robust passenger travel and expanding international flight networks, jet fuel demand in China is also projected to grow 1.3 percent year-on-year to 41.55 million tons in 2026.

To support the low-carbon transition, China's refining sector is proactively optimizing its industrial structure.

Tighter environmental standards and high-quality development mandates are accelerating supply-side consolidation, facilitating the orderly exit of 80 million tons to 100 million tons of outdated, inefficient small and medium-sized processing units.

This structural shift is expected to streamline national refining capacity to a more efficient and technologically advanced 900 million to 910 million tons by 2030, reinforcing the sector's long-term competitiveness and decarbonization pathway, the research unit said.