Media365
China’s aggressive shift towards electric taxis is emerging as an unexpected strategic hedge against oil market disruptions triggered by geopolitical tensions around the Strait of Hormuz, one of the world’s most critical energy chokepoints.
The country’s growing fleet of electric taxis and ride-hailing vehicles has significantly reduced gasoline consumption even as travel demand continues to rise. Analysts say the transition is making China’s transport sector less vulnerable to oil price spikes caused by conflicts in the Middle East.
Government data show taxi and ride-hailing trips reached 3.05 billion in May, marking a 6 per cent increase compared with the same period last year after the Iran conflict began. At the same time, a surge in drivers entering the ride-hailing market and the falling cost of electric vehicles has pushed taxi fares lower, encouraging commuters to switch from private petrol cars to taxis.
China’s Ministry of Transport estimates that around half of the country’s 1.3 million taxis are now electric, while major metropolitan areas have almost entirely electrified their taxi fleets.
The trend extends beyond taxis. Ride-hailing giant Didi added another 2 million electric and hybrid vehicles to its platform last year, taking its non-fossil-fuel fleet to 8 million vehicles, with electric vehicles accounting for 75 per cent of total mileage.
The electrification drive is already reshaping China’s fuel consumption. Despite higher road travel and increased freight movement, the country consumed 10 per cent less gasoline and 14 per cent less diesel in May compared with a year earlier.
The shift has also translated into weaker crude demand. China’s oil imports plunged 41 per cent year-on-year in June, easing pressure on global energy markets without requiring a major drawdown of strategic petroleum reserves.
Analysts believe these structural changes have reduced China’s dependence on imported oil, providing a natural buffer against supply disruptions from the Strait of Hormuz and limiting the economic impact of higher crude prices.
Forecasts suggest the transition is far from complete. Greenpeace expects 90 per cent of taxi and ride-hailing mileage in China to be electric by 2035, reinforcing the country’s long-term strategy of reducing oil dependence while accelerating transport electrification.
Although fuel prices have eased in recent weeks, market experts expect China’s gasoline demand to continue declining over the coming years, albeit at a slower pace than in 2026, as electric mobility becomes increasingly dominant across urban transport.
