Will Chinese oil demand grow?

The concern is often heard that growing vehicle sales in China will necessarily cause demand for oil to skyrocket. So, will Chinese oil demand grow?

No, not necessarily. According to the well -respected Industrial Engineering consulting firm McKinsey & Co.:

"China is quietly laying the foundation to become a global contender in the development of hybrid and electric vehicles....The Chinese government has been actively promoting the development of the electric vehicle industry..."

They estimate that EV market penetration will be roughly 3-4 as great in China, compared to the world market.*

http://www.mckinsey.com/clientservice/ccsi/pdf/the_electric_vehicle_opportunity.pdf

*Their estimate of EV market penetration in 2030 are very conservative: 5-10% for the world, and 20-30% for China. They do not attempt to evaluate whether Chinese oil consumption can grow to the level found in simple growth projections, which they indicate is 17M bbl/day in 2030. I think we can expect EV market penetration to be much larger, based on growing shortfalls in oil production.