Electrification is spreading through industry and transport
Fossil fuel use has already passed its peak in eight of the 11 industrial sectors tracked in the report, most of them since 2018. The declines are substantial: fossil fuel use is down 26% in food and beverages, 52% in transport equipment and 71% in fossil fuel extraction. Behind them is a steady deepening of electrification. In light manufacturing sectors such as machinery, electronics and textiles, electricity now supplies about three-quarters of final energy, and the shift is reaching harder sectors like metals smelting and non-metallic minerals.
In transport, electric passenger cars reached 67% of new sales in June 2026. Electric truck sales more than doubled in 2024 and again in 2025, taking them to 26% of new truck sales last year. Nine out of every ten electric trucks sold worldwide that year were sold in China.
The decline is not deindustrialisation
These declines are not the result of China producing less. In China, industrial value added per person keeps climbing while fossil fuel use per person has declined since peaking in the early 2010s, meaning the fall reflects electrification, not a shrinking industrial base. In comparison, industrial fossil fuel use per person has also fallen in the UK, Japan and Germany, but industrial value added per person in those economies stayed broadly flat.
China’s economy now runs on electricity to a greater degree than the economies that industrialised before it. Electricity reached 29% of China’s final energy consumption in 2024, up from 22% in 2015, compared with around 23% in Europe and about 21% in the US.
Electrification is also changing what energy security looks like for China, an economy that imports more than 70% of its oil and has the largest absolute exposure to the Strait of Hormuz. In 2024, China’s electric vehicle (EV) fleet displaced an estimated 0.4 million barrels per day of gasoline, up from about 0.1 million barrels per day in 2020, with total avoided oil demand at or above 1 million barrels per day. Over a single year, that avoided demand is roughly double the government-held strategic oil reserves of OECD Europe, which stood at 179 million barrels at the end of 2025.
The report argues that reserves and diversified suppliers can cushion a supply shock, but they cannot address its source. A structurally declining need for oil reduces the exposure itself, a layer of security that is available to any economy dependent on imported fuels, not only to China.
