The shift away from traditional combustion engines reflects a broader cooling of the Chinese automotive market. Passenger car sales plummeted by over 22% in May, even as electric and hybrid vehicles captured 62.9% of the total market share. While the absolute sales volume for EVs also dipped by 7.5%, the trend highlights a rapid transition in consumer preference away from fuel-dependent models.

Beijing has attempted to soften the impact by tapping into strategic crude oil stockpiles and prioritizing domestic fuel supply, yet these measures have failed to fully shield drivers from the global price shock. Imports of crude oil dropped to an eight-year low of 7.8 million barrels per day in May. Consequently, domestic refinery activity has slumped to a four-year low, with run rates averaging just 66.3% as the state manages the tension between maintaining supply and curbing costs.