Pain at the pump fuels EV rush in China, driving a timely boost for carmakers
Brent crude above US$110 is pushing mainland buyers away from petrol cars, lifting China’s EV makers despite fading subsidies
With Brent crude climbing past the psychologically significant US$100-a-barrel mark – and now trading above US$110 – mainland buyers are turning away from petrol vehicles, according to dealers and analysts.
“It’s a no-brainer for me now,” said Wang Wenbo, a 25-year-old first-time car buyer. “I was weighing the pros and cons last month and initially preferred petrol cars because I thought they were more reliable, but now I’d choose an electric vehicle to save money. Fuel costs would simply be too high at these oil prices.”
Earlier this week, China’s top economic planner raised retail petrol and diesel prices, although the increases were capped at about half the level dictated by the official pricing mechanism. Even so, Wang estimated the adjustment would add about 200 yuan (US$29) to his monthly fuel bill.
With no clear end to the US-Israel conflict involving Iran – and the Strait of Hormuz still closed – he said the case for EVs had strengthened further. “Chinese electric cars are already high quality and high performance; it just makes more sense now,” he added.
UBS estimated in early March that if oil prices held at around US$90 a barrel, annual fuel costs for petrol car owners would rise by roughly 2,000 yuan. With prices now well above that level, the pressure on drivers is intensifying.