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The war in Iran will accelerate China's switch to electric trucks over diesel

Analysts and automakers predict that the rise in diesel prices triggered by the Iran War will accelerate the electrification of China’s heavy truck fleet in this year. This is expected to speed up a decrease in fuel demand in the world's biggest oil importer.

Over the last two years, electric heavy trucks have grown from a niche to a market that will account for nearly a third (or more) of all new heavy trucks purchased in 2025. This is thanks to government subsidies and to expanding charging infrastructure. The growth of last year was accentuated in the fourth-quarter because buyers believed that the trade-in subsidies would soon end.

According to CVWorld.cn, the data provider, new-energy heavy trucks, which are mostly electrical, started this year with a similar boom. Sales grew 45% on an annual basis to 44,000 units, accounting for over a quarter, compared to less than 20% of sales one year ago.

CVWorld.cn also said that it expects sales of heavy electric vehicles to increase 30% in April, due to a stronger seasonal demand as well as?the increased oil prices.

The war in China has pushed up fuel prices, and this will lead to a faster replacement of conventional trucks, said Min Ji. Senior analyst at S&P global mobility, Min Ji plans to revise her forecast for the sale of electric trucks later this month.

Electric heavy trucks have a range of about 300 km (186 mi), and are mainly used for short trips between industrial sites or transport hubs. However, long-distance corridors continue to expand and manufacturers such as Sany now market trucks with a range of up 600 km.

The rapid rollout of electric trucks and vehicles powered by liquefied gas and electric cars has?also reversed decades-long growth in the consumption of diesel and gasoline, in China. Most analysts predict that oil demand will peak in 2030.

Some energy consultants now expect diesel consumption to decline faster than originally forecast.

GL Consulting predicts that diesel consumption will fall by 4.3% in this year, compared to a forecast of 4.1% before the war. Rystad Energy forecasts that diesel demand will fall by 5% in this year. This is faster than the 4% decline they predicted before the war. It's equivalent to an additional decrease of around 40,000 barrels a day.

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The economics of buying an EV truck are more compelling because the retail diesel prices in China have risen by 27% since the Iran War began on February 28, the highest they've been in four years.

In China, electric heavy trucks can cost up to 500,000 yuan (roughly $73,500), while diesel versions are more than 300,000. However, buyers will be able to save nearly half of that price with a trade-in program that has been extended from April until the end of the year.

The EV trucks operate 'vastly less expensively. GL Consulting estimates that lifetime costs for an electric truck – including purchase price, fuel and operating expenses over 1,000,000 km – are half of a diesel-equivalent at current?fuel rates.

In Europe, which is the second largest electric truck market in the world, but still far behind China, lower costs have also led to a boom in exports. According to the International Energy Agency, China will sell 160,000 electric trucks in 2024. In Europe, however, that number is less than 25,000.

In March, it was reported that at least 12 Chinese manufacturers, including the top-selling Sany brand, planned to launch sales in Europe in this year, at prices as low as a third below what is currently being charged.

Chen Dong, the Deputy General Manager of Sany, told reporters in April that Sany was already anticipating that the market for electric tractor trucks would increase by 50%, to 250,000 units.

Chen stated that the odds of reaching this goal are on the rise, due to rising oil prices.

(source: Reuters)