How Much Could Electric Vehicles Change the Market for Engine Oils?

Though the picture differs by region, electric vehicles (EVs) account for just 3% of sales worldwide, a number forecast to rise to 10% by 2025, 28% by 2030 and 58% by 2040. Within two decades, then, EVs are due to usurp automotive transport powered by internal combustion engines (ICEs), whatever fuel it is they’ll be combusting by that time. If such prophecies prove true, the rise of EVs will take a sizeable bite out of the market for engine lubricants.  

Or will they? 

Let’s run with this forecast. The crucial qualification is the fact that these are percentages of annual sales, not of cars on the road. In general, the amount of cars on the road will continue to increase, with some forecasters putting the volume at two billion by 2035. So, with electric vehicles projected to remain in the minority of sales, the number of ICEs will remain on the rise, with consumers in greater need for engine lubricants as their cars age. For instance, there are just over 280 million cars on North American roads at time of writing, the average age of which is about 12 years. Even with a fairly rapid up-take of EVs, then, we’re facing a future full of maintaining aging vehicles with internal combustion engines – indeed, there’ll likely be a greater number of these ICEs to maintain than there are today!  

Alright, then: if we’ve got a little under 15 years of continued market dominance for ICEs, we’ll have to consider the regulatory context that will be moving the lever on innovation, especially when it comes to enhancing fuel efficiency. Indeed, the next generation of diesel and gasoline engine oils is fast approaching, with API GF-7 and PC-12 heavy-duty engine oil standards expected by 2027.  

There are various different performance tests that are standardised for automotive engines, called Sequences. Conventionally, Sequence VI, the fuel economy test, runs an engine through a specific cycle, first with a reference oil, then with a test oil and the difference in fuel economy is measured as a percent improvement. But manufacturers and regulators in Japan have developed a test that measures the consumption of fuel in a fired engine, so there’s a discussion underway replacing the Sequence VI with this new test. Similarly, Sequence IX (more commonly known as the low-speed, pre-ignition, or LSPI, test), which evaluates the ability of an automotive engine to mitigate pre-ignition in the combustion chambers in gasoline, turbocharged, direct-injection (GTGI) engines under low-speed and high-load operating conditions, is being considered for revision to include a seasoned oil to test for its impact on low-speed pre-ignition. Sequence VIII, which tests the steady state operation of the single cylinder CLR oil evaluation engine, is also being evaluated, which considering it was invested during the Second World War, is no surprise.  

There are new innovations in heavy-duty engine oils on the way, as well. The proposed category currently known as PC-12 is getting new oxidation and deposit tests. The oil viscosity recommendation year-round is SAE 0W-20. Fuel economy is the major driving force for that recommendation. In that vein, GF-7 will include SAE 0W-8 and SAE 0W-12 to go along with SAE 0W-16. On the heavy-duty side, SAE 0W-20 will be included. Oil change intervals will likely hold steady at about 6,000-7,000 miles. The oxidation limits, on the other hand, are changing to reflect more stable oils, which will positively affect the longevity of fuels. More limits related to oil chemistry, including finished oil ash content and exhaust catalyst protection, will be included. And whilst there may be restrictions on composition in order to make it easier to dispose of used oil, there will most certainly be growth in used oil refining (or, I suppose, re-refining) to capture as much of the re-useable oil as possible.  

It is evident that the production of engine oil will face significant challenges in the future. In addition to technical engineering hurdles, the marketing landscape is also poised to experience significant transformations. Conventional commercial wisdom has it that the greater the development of a market, the greater the role of cost in securing sales. Whilst technological advancements are undoubtedly appealing, the demand for quality products at reasonable prices will eventually prevail. Consequently, larger organizations capable of maintaining profitability and outcompeting smaller counterparts will likely dominate the market.