China’s diesel trucks are shifting to electric. That could change global LNG and diesel demand

In Vietnam’s capital, Hanoi, recent reports indicate that China is rapidly transitioning its heavy truck fleet from diesel-powered vehicles to electric models, a shift that could have significant implications for global fuel consumption and the future of freight transport. Just a few years ago, in 2020, nearly all new trucks sold in China ran on diesel. By the first half of 2025, however, battery-electric trucks represented 22% of new heavy truck sales, more than doubling from 9.2% in the same period in 2024, according to data from Commercial Vehicle World, a Beijing-based trucking industry research firm. British consultancy BMI projects that electric trucks could comprise nearly 46% of all new heavy truck sales in 2025 and could reach 60% by 2026.

Heavy trucks play a central role in modern economies, carrying large quantities of goods across vast distances. They are also major contributors to global carbon-dioxide emissions. In 2019, for instance, freight transport by road accounted for roughly one-third of all transportation-related carbon emissions. Historically, decarbonizing trucking has been difficult because the batteries required for electric trucks are heavy, reducing cargo capacity compared to traditional diesel trucks. As a result, some industry advocates have supported liquefied natural gas (LNG) as a lower-emission alternative while electric vehicle technology matures. LNG is natural gas cooled into liquid form for easier transport and storage.

China, which has the world’s second-largest trucking fleet after the United States, still relies heavily on diesel, but the market is clearly shifting toward electrification. Analysts from the International Energy Agency and the Institute for Energy Economics and Financial Analysis (IEEFA) note that transport fuel demand in China is flattening, and diesel consumption could decline faster than previously anticipated. Christopher Doleman, an IEEFA analyst, pointed out that electric trucks have now overtaken LNG models in sales, which could reduce China’s fossil fuel demand and limit the global spread of LNG trucking.

The acceleration of electric truck adoption in China has been aided by falling costs. The share of new trucks sold that are electric has risen from 8% in 2024 to 28% by August 2025. Electric trucks now outsell LNG-powered vehicles for several consecutive months, despite being two to three times more expensive than diesel models and roughly 18% more costly than LNG trucks. Researchers in China estimate that higher energy efficiency and lower operating costs allow electric truck owners to save between 10% and 26% over the lifetime of the vehicle, an important consideration for China’s fleet owners, who are highly cost-conscious.

Government incentives have also played a critical role. For example, a 2024 program allowed truck owners to trade in older vehicles for newer or electric models, with subsidies of up to around $19,000. Additionally, China has invested heavily in charging infrastructure. Key logistics hubs in the Yangtze River Delta, as well as major cities such as Beijing and Shanghai, now feature high-capacity charging stations along freight corridors capable of charging trucks in minutes. Battery maker CATL has introduced a battery-swapping system for heavy trucks and plans a nationwide network of swap stations covering roughly 150,000 kilometers of China’s expressways.

The growth of electric trucks in China is already reducing demand for diesel and could influence LNG consumption as well. Diesel use in China, the world’s second-largest consumer after the U.S., fell to 3.9 million barrels per day in June 2024, an 11% year-on-year drop — the largest decline since mid-2021 — partly due to the combined effects of LNG and electric trucks. Analysts suggest this trend is underreported despite its potential to significantly alter regional diesel trade flows. While LNG truck sales surged briefly in late 2023 and early 2024 following the relaxation of COVID-era transport restrictions, they had declined by 6% by mid-2025 as electric trucks gained market share.

Though LNG remains part of the transition, it is seen largely as a temporary solution, particularly within China, where extensive domestic gas production, pipeline infrastructure, and byproducts like coke oven gas make LNG more viable than in most other markets. A 2020 study by the International Council on Clean Transportation found that while LNG trucks reduce emissions modestly over a century-long horizon, methane leaks associated with LNG can actually worsen short-term warming, given methane’s high global warming potential compared to carbon dioxide. Modern diesel engines now achieve air-quality performance similar to LNG in many respects.

China is also positioning itself as a major player in the global electric truck market. Already the world’s largest exporter of passenger vehicles, Chinese manufacturers are streamlining production of electric trucks and integrating in-house production of batteries, motors, and electronics to reduce costs and ensure compatibility. Urban freight routes and China’s fast-paced delivery industry have served as effective testing grounds for electric truck technology.

Between 2021 and 2023, Chinese heavy-duty truck exports, including electric models, to the Middle East and North Africa grew about 73% annually, while shipments to Latin America increased by 46% per year. Exports to Europe are planned, with companies such as Sany Heavy Industry intending to begin shipments in 2026. BYD has begun construction of a truck and bus factory in Hungary to prepare for Europe’s target of cutting carbon emissions from new trucks by 90% by 2040 compared to 2019 levels. McKinsey & Company notes that European adoption will require zero-emission truck prices to roughly halve to compete with diesel alternatives.

Overall, the shift toward electric trucks in China is already having measurable effects on global fuel markets, particularly diesel, and signals a growing trend in electrification for heavy transport. While challenges such as charging infrastructure and upfront costs remain, China’s rapid adoption of electric trucks could reshape both domestic and international trucking industries in the years to come, potentially serving as a model for other countries and regions seeking to reduce transport-related emissions.

Source: AP NEWS