Electric taxis are turning into China's shield against oil crises

Chinese cities have found an unexpected way to survive oil turbulence—and it's already changing the global market.

China is experiencing a rare transport metamorphosis: the higher gasoline prices, the more actively the demand for taxis and ride-sharing services is growing, notes xrust. In May, residents made more than three billion trips — 6% more than a year earlier. The growth began immediately after the escalation of the conflict over the Strait of Hormuz, through which a significant part of the world's oil supplies passes.

The main reason is the massive electrification of the taxi fleet. In large cities, almost all cars run on electric power, and the national average is about half. For Russian readers, this is similar to a situation where a jump in fuel prices pushes people to take taxis, but in China the effect is amplified by cheap electric vehicles and an influx of new drivers looking for income in a weak economy.

Passengers are actively discussing changes on social networks: travel has become cheaper than using your own car. The Chinese write that with high gasoline prices, it is easier to call a taxi than to look for parking and pay for fuel. This is reminiscent of Russian realities, but in China the trend has become systemic — electric taxis have actually become an economic buffer.

The effect is noticeable in statistics. In May, the country reduced gasoline consumption by 10% and diesel by 14%, despite an increase in cargo transportation. Oil imports in June fell by 41% year-on-year — China did not actively spend reserves, but simply reduced demand. For the global market, this means less pressure on prices: the largest oil consumer has become structurally less dependent on the fuel.

The industry is also being rebuilt. The Didi service added two million hybrid and electric cars in a year, bringing the fleet of environmentally friendly cars to eight million. Electric vehicles account for 75% of all mileage. Experts predict that by 2035, up to 90% of all taxi and car sharing trips will be electric—in fact, this is a new model of urban transport.

For Russia, this contains an important signal: mass electrification of taxis can become a tool to protect the economy from external energy shocks. China shows that the transition to electric traction is not just an environmental trend, but a strategic step that can mitigate the impact of global crises.

Sources: Reuters, JP Morgan

Xrust Electric taxis are turning into China's shield against oil crises