China Truck Sales Now Majority Electric. What’s Next?

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EV heavy trucks hit 50.3% market share in China for September, with sales up 34% from a year ago. Long-haul big rig market share hit 64.5%. China is on track to have over 40% EV market share for the entire year, reaching their 2030 goal in a matter of months. This is not the first time China’s heavy truck market share topped 50%, but that previous blip in December last year was prior to subsidies ending, followed by a dip in January. Current sales rates are not bolstered by the subsidy and are now on a much more stable upward trajectory.

The speed of EV adoption for heavy trucks in China has recently grown much faster than for cars, having risen from just 13.6% in 2024. When I visited Guangzhou in November of last year and again in April of this year, I noticed a lot more green plates on trucks, indicating that they were electric. It seems that my perception is backed by sales data.

With the addition of LNG trucks, diesel’s share of heavy trucks has dropped to roughly 40%. While LNG sales have also declined with the rate of EV adoption, diesel trucks could soon make up less than 1/3 of sales and decline further from there. China could feasibly double its 2030 goal and hit 80% EV penetration, by which point many diesel models are likely to be discontinued.

With these levels of market penetration, in addition to retirements, China’s diesel demand is on track to fall by about 230,000 barrels per day this year, despite increased freight movement. Every additional electric truck that replaces a diesel truck then builds on that reduction. Due to their duty cycle, each electric truck sold has a much greater impact on fuel consumption than each car sold. And the price of the fuel combined with the duty cycle has a much greater impact on overall truck economics.

To be clear, these improving results are not due to subsidies, as they appear in the year after subsidies were cut. They are also not due to mandates, as the 2030 goals were met before the ink was dry on their announcement. EV trucks are now more affordable to own and operate than diesel trucks in China. The increase in diesel prices has only increased the cost gap.

Last year, roughly 90% of all electric truck sales globally were in China. That percentage is set to expand this year, despite rising sales in some other countries. Those sales are simply not rising fast enough outside of China to keep pace with China. In comparison, the EU is looking at 2.5% EV market share this year. China is on pace to average roughly as many electric trucks sold per week as Europe sells per year. The US EV truck market looks like a rounding error in comparison at less than one percent.

In addition, China has rapidly been building out heavy truck charging infrastructure as part of the 28 million charging facilities planned to be in operation by the end of 2027, up from 21 million last March. This not only focuses on the major cities but also extends into more rural areas that have been slower to adopt electrification. In addition, several companies are building out battery swap stations. While we have yet to see if battery swap or MW+ charging wins in the truck market, expect the competition between the two approaches to be fierce.

Within Tier 1 cities, I could see a potential phase out of diesel trucks in the near future. Hainan province is already planning to end ICE passenger car sales by 2030, and I expect that to extend to diesel trucks as well. Although rural areas have been slower to adopt, they also tend to be less wealthy and thus more impacted by the changing economics. If diesel prices stay elevated while charging becomes convenient, many rural businesses will not be able to afford to buy new diesel trucks. With the end of diesel truck sales, strict emissions standards and a potential return of scrappage incentives could take remaining diesel vehicles off the road at an accelerated rate.

With fewer diesel trucks on the road in the largest market globally, diesel consumption is set to decline. In addition, the supply chain for diesel parts will also start to decline. As protectionism has targeted electric vehicles, rather than internal combustion  engine (ICE) vehicles, a decline in Chinese (ICE) parts has a potentially significant impact on global markets.

Where Will Electric Trucks Go From Here?

Of course, as EVs take over the majority of heavy truck sales in the fiercely competitive Chinese market, Chinese manufacturers will start looking outside of the country for growth.

The traditional thought would be to look at wealthy Western countries that have substantial buying power. However, many Chinese companies may be a bit reluctant to focus on those markets after the protectionist efforts against electric passenger vehicles. Many European markets, like Germany, also have very high electricity prices, which makes the financial proposition less attractive for commercial vehicles that are heavily motivated by costs. Chinese companies may start focusing elsewhere.

The Middle Corridor could become a focus. This essentially rebuilds the Silk Road land route from China, across the Caspian Sea, on to Turkey. Many of the countries along this route  once had prosperous trade, only to fall into decline when ocean trade routes were established. However, land transport is much easier to electrify than long ocean voyages. China is investing heavily with countries like Kazakhstan along the route with renewable electricity infrastructure. Electrified rail is expanding by 26-fold in Turkey. Electrified trucking is the next logical step, connecting the rail lines to more local production along the route.

Other Belt and Road Initiative (BRI) countries could also benefit. In countries like Ethiopia, which has expensive diesel but electricity prices to businesses of just $0.017/kWh, electric trucks could make perfect sense to transport between new factories and new ports. Trading partners like Vietnam and Thailand could also see an influx.

All this is not to say that local companies will not benefit. Unlike passenger cars, heavy equipment tends to be more modular. Due to the bulk and mass of the vehicles, final assembly is more likely to be localized, with greater use of local suppliers.

Overall, we could see much of the “Rest of the World” (ROW) leapfrog legacy economies in EV truck adoption. The purchase price is no longer prohibitive in China, and the operating costs are much lower. With infrastructure buildout and increasing renewable installed capacity, electric trucking is poised to take over rapidly.

That is not to say that the West will be completely left out. Countries with less prohibitive trade policies toward EVs will likely see increased adoption. While EVs have taken over passenger car sales in Norway, their trucking industry still has a way to go at just 14.4%. And the geographically most eastern country typically lumped in with the “West,” Australia, is likely to see EV truck sales follow a similar pattern to EV car sales. If Canada continues to open up, they could also benefit. Of course, as the majority of the economic benefit from electric trucks comes from their use, inflated trucking costs hurt every company that moves products by truck, and those inflated costs then lead to inflation throughout the economy. That impacts overall affordability. As such, there is a chance that protectionists do not put as much effort into undermining electric truck imports as they put into passenger EVs.

And the EV heavy truck global supply chain will become increasingly well established. This could mean more parts availability for brands outside of China to build competitive vehicles, if those companies have access to global supply chains. Competitive markets will also drive innovation, moving the technology forward at an accelerating rate. Meanwhile the supply chain for diesel trucks will shrink.

While the US still seems to be figuring out how to make a safe EV Semi, battery-powered heavy trucks are becoming increasingly mature products elsewhere. As electric trucks move from majority share to complete market dominance in the largest market, other markets will follow, and the transition will become inevitable. Hopefully, the largest oil producing country in the world will not be left too far behind.