The surge in diesel prices, precipitated by conflict with Iran, could hasten the electrification of China’s heavy-duty truck fleet this year, according to market analysts and auto manufacturers. This shift could further expedite the decline in fuel consumption in the world’s top oil-importing nation.
The past two years have seen electric heavy-duty truck sales rise from a niche market to nearly one-third of all new heavy-duty truck purchases by 2025. This increase is attributed to government subsidies, lower refueling costs, and an expanding charging infrastructure. Growth in 2025 was particularly significant in the last quarter as buyers anticipated the termination of the trade-in subsidy program.
Sales of new-energy heavy-duty trucks, predominantly electric, commenced this year with similar growth, increasing by 45% from the previous year to 44,000 units. This figure represents over a quarter of the entire segment, a strong increase from less than 20% a year earlier, as stated by data provider CVWorld.cn.
CVWorld.cn also expects sales of heavy electric trucks to rise by 30% in April. The increase is likely driven by robust seasonal demand and high oil prices. According to Min Ji, a senior analyst at S&P Global Mobility, the conflict has increased China’s domestic fuel prices, inevitably accelerating the transition from conventional trucks.
Electric heavy-duty trucks, with a range of approximately 300km, are primarily used for short hauls between industrial locations and transportation hubs. However, long-distance routes are expanding, and manufacturers such as Sany are introducing trucks with a range of up to 600km.
The extensive electrification of passenger cars and the swift deployment of electric and liquefied natural gas-powered trucks have reversed China’s longstanding growth in the use of diesel and gasoline. Industry analysts largely predict that the demand for oil will reach its peak by 2030.
Projections for Diesel Consumption and Export Trends
Current predictions from energy consultancies anticipate a more rapid decline in diesel use than previously expected. GL Consulting predicts diesel consumption will decrease by 4.3% this year, in comparison with a pre-conflict estimate of a 4.1% fall. Rystad Energy forecasts a 5% reduction in diesel demand, surpassing its previous estimate of a 4% decrease, equating to a further decline of about 40,000 barrels daily.
A 27% rise in retail diesel prices in China following the onset of the Iran conflict has made the economic case for purchasing electric trucks more compelling. Despite the higher initial cost of electric heavy-duty trucks (500,000 yuan or US$73,500) compared to their diesel counterparts (more than 300,000 yuan), nearly half the price difference can be offset through a trade-in program recently extended to the end of the year.
The lower operating costs of electric trucks are fueling a surge in exports to Europe, which is the world’s second-largest electric truck market, albeit considerably behind China. In 2024, China’s electric truck sales reached 160,000 units, while Europe lagged with fewer than 25,000 sales, as reported by the International Energy Agency.
Questions & Answers
What impact has the Iran conflict had on diesel prices in China?
The conflict with Iran has led to a significant surge in diesel prices in China, rising by 27% since the conflict began on February 28.
What are the benefits of electric heavy-duty trucks?
Electric heavy-duty trucks offer a range of benefits including lower operating costs, far-reaching government subsidies, and reduced environmental impact compared to their diesel counterparts.
How is the growth of electric truck sales expected to change in the near future?
The growth of electric truck sales is projected to continue, with a predicted increase of 30% in sales of heavy electric trucks in April. This growth is primarily driven by strong seasonal demand and high oil prices.
