By Paul Homewood
The clownish AEP has lost the plot again!
The existential threat to Saudi Arabia and the OPEC cartel comes from China, not from net zero or from green deals in the West.
Chinese sales of petrol and diesel cars fell 20pc in absolute volume terms in February from a year earlier. Sales of plug-in electric vehicles kept rising explosively and reached a record 32pc of the market for standard passenger cars.
At the current pace, EV sales in China will hit eight million this year, helped by the proliferation of battery-swapping stations. Rather than charging your own car, you do an instant swap. No need to wait. No need for charge-points everywhere.
Sales have surged despite the elimination of subsidies at the end of last year. China’s best-selling EV is the BYD Song Plus, which retails for about £22,000. Number two is the smaller Wuling Mini. It starts at around £4,000 (not a misprint).
“They are producing cheap EVs for the mass market, which is still completely lacking in the West. It is absolutely taking off,” said Lord Adair Turner, chairman of the global Energy Transitions Commission (ETC).
The consensus forecast until recently was that EV penetration would reach 40pc of Chinese sales by 2030. That threshold could be crossed as soon as this year if manufacturers can produce fast enough to meet the demand.
Before AEP gets too excited, maybe he should consider a few facts:
In particular most urban Chinese live in high rise apartments, so will find EVs pretty much useless. Similarly rural Chinese will also find EVs unfit for purpose, because of the lack of any charging infrastructure, the long distances involved and the rough roads.
2) Car sales in China have grown rapidly, even within the last decade. The number of cars on the road in China will carry on increasing for years to come, and many of these will be petrol.
3) He claims that “sales of petrol and diesel cars fell 20pc in absolute volume terms in February from a year earlier”. But to just cherry pick one month is deceitful. As Trading Economics report, there has been a sharp decline in petrol/diesels in the last couple of months because of the expiration of tax credits at the end of last year.
4) Oil consumption has been rising steadily for the last two decades, despite the rise of EVs and renewables:
BP Energy Review
5) Far from importing less oil from Saudi, China is allowing Saudi Aramco to build a much needed oil refinery in China, which will import two thirds of its oil from Saudi.
6) Xi Jinping has also been eager to ally with Saudi Arabia, in order to ensure a steady flow of the black stuff. That was why the two countries signed a wide ranging agreement last December, to cooperate on diplomatic, security, economic and energy issues.
That is also why China formally brought the Saudis and Iranians together last month, in order to build up ties with the Middle Eastern oil producers.