According tomedia reports, the $146 billion lubricant industry is facing the same fate as Kodak due to the rise of electric vehicles. From Volkswagen to Nissan, carmakers are turning to battery-powered models that demand less lubricant than fuel-based cars. Lubricants manufacturers are wary of expecting a decline in demand for lubricants in the automotive market from 2025. They want to avoid a repeat of Kodak,” which was doomed in the 1970s by failing to capture the potential of digital cameras.
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For decades, lubricant manufacturers have focused on helping to improve fuel efficiency and extend oil change cycles in internal combustion engines. Electric cars present them with a series of new challenges. They require grease to cool and lubricate the motor, while also protecting the in-car’s electronic son and compatible with non-metallic materials such as plastics.
“I’m well aware that the world is changing,” says Dave Hall, a 30-year-old industry veteran. “
Electric cars are expected to account for the bulk of new car sales by 2040.
At present, as more and more electric vehicles are on the road, people’s attention is mainly focused on battery performance and design, while lubricants are secondary. Lutz Lindemann, chief technology officer at Fuchs, a German lubricant company, says some electric cars use standard internal combustion engine grease.
There are signs that this pressure is about to affect the lubricants business. Demand for automotive lubricants should remain unchanged for the “foreseeable future” due to the impact of electric vehicles, increased use of synthetic lubricants and economic pressures, according to research by energy consultancy Kline and Company. Last year, the demand for automotive lubricants reached about 20 million tons.
Other oil majors are also focusing on developing new products, and they are fighting the impact of emissions reduction campaigns in a number of areas. Royal Dutch Shell, the world’s largest supplier of finished lubricants, has developed a range of lubricants for high-tech powertrains for hybrid and electric vehicles. Total SA launched two brands of electric vehicle lubricants last year, and Petronas launched its own this year.
Like Castrol, Foss has created a dedicated international team of executives and researchers specializing in the development and marketing of electric vehicle lubricants, Lindman said. BP’s Hall says a new formula that will increase efficiency by 1 percent could increase mileage by four miles as automakers are eager to extend the mileage.
Jean-Baptiste Rolland, an analyst at Merrill Lynch, said sales of lubricants could start to decline as early as 2025 as electric vehicles become more popular in China and Europe. He estimates that the demand for lubricants for pure electric vehicles is 50 to 70 per cent lower than that of internal combustion engines.
“Most importantly, demand for electric vehicles will not compensate for the loss of demand for lubricants for internal combustion locomotives,” said George Morvey, industry manager at Kline Energy. “
Both Movi and Mr Lindman of Foss say the good news is that the industry foresees future turmoil and has a long time to deal with it. ‘Given that the number of internal combustion engine vehicles in China alone will increase dramatically, from the current 260 million to 350 million in 10 years’ time, there will be no sudden sharp downturn in the market, ‘ Mr. Lindman said. In addition, he said, developing specialized high-performance lubricants for electric vehicles would lead to more profitable sales.
Linderman points out that the value of lubricants for electric vehicles may be 90 percent of that of internal combustion locomotives. “We’re really not sure, but for us, it’s not a dramatic disaster. “Sales will drop dramatically, but not in value. “