China's EV boom cuts fossil fuel use; oil displaced rises 42% in H1 2026: Jefferies

The trace

How it reaches your house.

Starting from Gasoline and diesel, we walked the supply graph hop by hop to the goods you buy and the companies you own. Each step is the engine’s reasoning, scored for confidence and cited where a source backs it.

1. First impact

   Gasoline and diesel →Prices ease

   Crude Oil Feedstock

   China's EV-driven fuel displacement directly cuts gasoline and diesel demand, so refiners need less crude feedstock and crude prices come under pressure.

   94% confidence

   NdFeB Rare Earth Permanent Magnets →Stands to benefit

   China

   China dominates NdFeB magnet supply at 92%, so stronger EV-driven magnet demand should disproportionately benefit Chinese producers.

   86% confidence

   NdFeB Rare Earth Permanent Magnets →Stands to benefit

   Zhongke Sanhuan000970.SZ

   China's EV boom should lift demand for NdFeB magnets used in EVs, and Zhongke Sanhuan's 28% share plus 24-month replacement time make it a strong beneficiary.

2. Hop 2

   Lithium-ion battery cells (prismatic, cylindrical, pouch) →Stands to benefit

   China

   China supplies 73% of these battery cells, so faster EV adoption there should lift domestic cell output and industry economics.

   91% confidence

   Lithium-Ion Battery Cells →Stands to benefit

   China

   China accounts for 85% of the supplied lithium-ion battery cells, so domestic production should capture most of the EV-driven demand increase.

   90% confidence

   Lithium-ion battery cells (prismatic, cylindrical, pouch) →Stands to benefit

   Contemporary Amperex Technology Co. Limited

3. Hop 3

   Gulf Coast crude oil feedstock (jet fraction) →Prices ease

   Jet fuel

   This feedstock is a critical jet fuel input (dependency_strength 0.95), so weaker fossil-fuel demand should pass through as cheaper jet fuel.

   72% confidence

   Gulf Coast crude oil feedstock (jet fraction) →Prices ease

   United States

   The U.S. supplies 52% of this feedstock, so lower oil demand should pressure realized prices for the largest supplier base.

   68% confidence

   BYD Company Limited →Prices rise

   Lithium-ion battery cells (prismatic, cylindrical, pouch)

   Rising EV adoption should increase BYD's need for core lithium-ion cells, putting upward pressure on this major input even though it is more substitutable than LFP.

4. Hop 4

   Lithium-Ion Battery Cells (Li-Co/NMC) →Stands to benefit

   China

   China supplies 65% of this battery-cell input, so a China-led EV boom should raise demand for Li-Co/NMC cells and benefit the main supplying country.

   84% confidence

   Lithium-Ion Battery Cells (Li-Co/NMC) →Stands to benefit

   ATL (Amperex Technology Limited)

   ATL has the largest listed share of this cell input at 38% and low substitutability, so rising EV battery demand should disproportionately help it.

   77% confidence

   Lithium-Ion Battery Cells (Li-Co/NMC) →Stands to benefit

   South Korea