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Comment by JumpCrisscross | Hacker News Reader

We’re the largest producer of petroleum on the planet. China is not.

Conversely, China is the largest producer of EVs on the planet, and will reach peak oil demand this year or next due to their EV manufacturing ramp rate.

China is playing to win the future, and it’s clear in how they operate.

> China is the largest producer of EVs on the planet, and will reach peak oil demand this year or next due to their EV manufacturing ramp rate

Sure. They have a strategic incentive to electrify their military. In the meantime, they need stockpiles.

Maybe we’re talking past each other. China isn’t electrifying their military, they are electrifying all light transportation. This destroys demand for oil, slowly working towards negating it as a point of leverage during a geopolitical conflict. You can’t embargo, blockade, or use economic sanctions on an input a country doesn’t need.

Oil demand destruction, EVs, renewables, are all national economic security issues. They are stockpiling, decoupling, and becoming self sufficient internally to be prepared for an isolationist period. We can wildly speculate why, but it’s very clear that they do not want to be beholden to other nation state economic counterparties.

> it’s very clear that they do not want to be beholden to other nation state economic counterparties

Days of stockpiles aren’t a strategic economic buffer. They’re tactical. You’re correct that electrification reduces one of China’s geostrategic vulnerabilities. I’m extending that to its military; stockpiles alone won’t defeat a blockade.

Commoditise your complements.

Just like the markets in the West, the chinese market for EVs is saturated. That's why they have to ship their EVs to Europe before they have a buyer.

There is a market clearing price at which even the most opposed EV buyer becomes one (total cost of ownership, fuel cost volatility, etc). The subsidies must last only until sufficient internal combustion manufacturing capacity has been reduced to where EVs become the only option. Like bankruptcy, this transition will happen slowly, and then all of a sudden (as there is a minimum volume of units a combustion vehicle factory must sell to remain viable).

> The Chinese auto industry is experiencing a revolution,” said John Zeng, the director of Asia forecasting at GlobalData Automotive. “The old internal combustion capacity is dying.”

> Sales of gasoline-powered cars plummeted to 17.7 million last year from 28.3 million in 2017, the year that Hyundai opened its Chongqing complex. That drop is equivalent to the entire European Union car market last year, or all of the United States’ annual car and light truck production.

https://www.nytimes.com/2024/04/23/business/china-auto-facto... | https://archive.today/4jCiQ

https://electrek.co/2023/04/01/ice-car-values-plummet-in-chi...

China's current dependence on long petroleum supply chains from Russia and the Persian Gulf to fuel their current fleet of cars and trucks is a weakness, and Beijing is quite rationally responding to that weakness in national security by investing heavily in EVs.

To power all those EVs, China's adding coal-fired electrical generation capacity at a very rapid pace. (China has plenty of coal.)

Since 2018, and only if you don't think of OPEC as a single block (which in many ways they are). Also, being a top producer in the short term is just another example of short-term thinking. 80% of the world's oils reserves are in OPEC countries. Burning through a limited supply in record time is hardly something to be proud of.

80% excluding oil sands. Which is silly, because the oil sands are economically viable reserves, and would be even more so during a global crisis. The oil sands contain hundreds of years worth of oil supply at current rates.

Ok... What is the EROEI of these reserves?

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