Norwegians have almost stopped buying fossil-fuel-powered vehicles. By the end of 2024, about 96% of new passenger car registrations were battery electric vehicles with a few other alternative fuel cars in the mix. The country is also the first to have more EVs in the fleet than gasoline cars.

It looks likely that Norway will cruise toward the government’s aim to end ICE sales by 2025.

There are several factors that have led to this full-throttle adoption of EVs. The population of Norway in 5.5 million people, living standards and average income are high and it has a galactic sovereign wealth fund of U.S.$1 trillion to pay for things like infrastructure. The country has also benefitted from successive governments that have consistently supported substantial incentive packages that helped people make the transition.

Timeline of Norway’s EV purchasing incentives

1990-2022: exempt from purchase or import tax
1996-2021: exempt from annual road tax
1997-2017: exempt from toll road charges
1999-2017: free municipal parking
2000-2008: 25% reduced company car tax  
2001-2022: exempt from 25% VAT on purchase
2005: can use bus lanes
2009-2017: 50% reduced company car tax. free ferries
2015: exempt from 25% VAT on leasing
2016: New rules allow local authorities to limit the access to only include EVs that carry one or more passengers
2017:  Parliament sets zero-emissions cars target for 2025. People living in apartment buildings have the right to access chargers
2018: EVs paid up to 50% of the total amount on ferry fares for EV
2018-2021: Company car tax reduction reduced to 40%
2018-2022: Maximum 50% of the total amount on toll roads
2021: Reduced road tax
2022: Full tax private cars. Company car tax reduction reduced to 20%. Publicly procured cars must be ZEV
2023: Some purchase tax based on cars weight. 25% VAT on the purchase price from 500,000 kroner and over. Maximum 70% of the total amount on toll roads​
2025: City buses must be ZEV​

Incentive information collated by the Norwegian EV Association.

The rise of electric vehicles continued on in the second half of 2021, and there was more to this half of the year than the dominance of battery power.

Hydrogen fuel cell electric vehicles took center stage, as two industry behemoths, Hyundai Motor Group and Toyota Motor Corp., underscored their commitment to the fringe technology. On its website, Hyundai laid out its vision for a fully fledged hydrogen society, “where hydrogen energy can be easily and conveniently used for ‘Everyone, Everything, Everywhere’ by 2040.” 

The Korean manufacturer aims to launch a string of FCEVs from 2023 onward. The following year a fuel cell-powered semi-truck will make its debut. From 2024 through 2028, Hyundai will bring to market a full range of commercial vehicles, including delivery vans and city buses. The company broke ground on a $1.1 billion factory capable of producing 100,000 fuel cells per year, the Carscoops website reported in October. The plant is expected to come online in the second half of 2023. 

Toyota emphasized that it will be doing its part in driving a hydrogen economy, although it is taking a less aggressive approach than its Korean competitors. That said, in December the Japanese company unveiled its production-ready, second-generation fuel cell stack. The stacks will be assembled in Brussels, Belgium, beginning in January, Toyota said in a news release. They will be available in two configurations (cube and rectangular) to make a wider range of applications possible. The fuel cell stacks won’t be offered in FCEVs but are intended for use in trucks, buses, trains and boats. In that sense, Toyota is both a technology provider and an OEM.  

ICEd Out

Toyota is also taking a different approach to hydrogen technology. While committed to FCEVs, it is also experimenting with hydrogen as a fuel for internal combustion engines. Using a modified injection system and fuel supply, Toyota has been using a hydrogen-powered Corolla Sport in the Super Taikyu race series in Japan, where it took part in and completed a 24-hour endurance race. In December Toyota presented its second experimental hydrogen-powered vehicle, the GR Yaris. Toyota president Akio Toyoda hinted that the technology might be production-ready in about a decade. 

Toyota’s endeavors are part of a broader Japanese plan to drag the internal combustion engine, or ICE, from the gates of hell. The effort involves Toyota, Kawasaki Heavy Industries, Mazda, Subaru and Yamaha, Carscoops reported. The manufacturers will not only conduct research on hydrogen engines but will also study biodiesel and biomass-derived synthetic fuel. 

Yet it’s unlikely cars with hydrogen internal combustion engines will pose a threat to the dominance of battery electrics, dashing the hopes of automotive lubricant blenders that the future of transportation will still need engine oils.

Few companies have experimented with hydrogen ICEs. Toyota’s Mirai has not bee the success it had hoped for. It was abandoned by the International Olympic Committee as the car of the games. To add insult to injury, Ukrainian soldiers repurposed one as an improvized explosive device.

The move comes at a time when more and more major manufacturers are either committing to phasing out ICEs or signaling their readiness to do so. On the sidelines of the COP26 U.N. Climate Change Conference, BYD, Ford, General Motors, Jaguar Land Rover, Mercedes-Benz and Volvo all pledged to cease production of ICE-powered vehicles by 2040, Reuters news agency reported. Of the six, Jaguar Land Rover and Volvo had already promised to do so. In 2024, Volvo indicated it may have been hasty to dump the ICE.

Small surprise, then, that Toyota presented its first mass market BEV, the bZ4X toward the end of 2022 and will be the first of at least seven “beyond Zero” vehicles. Toyota announced that it had earmarked $13.5 billion for investment in the accompanying battery development and production through 2030. 

With the bZ4X launched, it will be competitive but by no means groundbreaking, especially not in terms of range and charging speeds. Instead, Toyota is relying on its reputation as a manufacturer of some of the most reliable vehicles in the world. The Japanese giant will guarantee a mere 10% battery degradation over a period of 10 years or 240,000 kilometers. It will also be offered – under certain conditions – with a warranty of 1 million km per 10 years.

Speaking to the press, Toyota officials said they wanted to avoid costly battery recalls and reputational risk at all costs. Looking back at the past few months, it is easy to see why. Ford, General Motors and Hyundai have had major and costly recalls. While they might be able to recover money from their battery suppliers, that won’t undo the bad press. 

Meanwhile, the expansion plans of battery cell suppliers continue unabated. Industry leader CATL of China has annual output capacity of 65.45 gigawatt hours, with an additional 92.5 GWh under construction, data compiled by Reuters showed in October. LG Energy Solutions is forecast to hit 155 GWh of capacity by the end of 2021. The South Korean electronics company aims to build new production facilities in the U.S. states of Ohio and Tennessee, as well as in Indonesia. As a result, annual output capacity is expected to almost triple by 2025. Their compatriots at SK ON are at global annual production capacity of 40 GWh. Its own expansion in the state of Georgia  will increase capacity to 220 GWh. The new plant is expected to begin operations in 2022. 

Samsung SDI and Japanese major Panasonic do not disclose manufacturing capacity. But Panasonic is working on the new, potentially game-changing 4680-type cells that Tesla intends to use going forward. 

To be fitted in a new structural battery, Panasonic’s cells are expected to result in a 16% increase in range for the Berlin-built Model Y. Tesla’s new plant is essentially completed, with only some necessary permits keeping the company’s divisive founder Elon Musk from bringing the German facility online officially. 

Tesla’s second new plant, in Texas, began operations in 2022. While this is expected to give the automaker a big boost, its production push is still hampered by a chip and cell shortage, Musk said. But even with its existing production facilities in the United States and China, Tesla announced in that it was able to break production, delivery and earning records in the third quarter. On top of that, it achieved those record earnings mainly by selling vehicles, not by selling regulatory emission credits to traditional automakers or bitcoin trading.

Performance demands for some lubricants are no different in low-emissions vehicles than in conventional vehicles. Those include brake and shock absorber fluids, as well as greases for doors, locks and wheels. Requirements differ for other lubes and fluids. In some cases, a lubricant is used in an EV but not in an ICE-powered car, or vice versa. Some products are used across all vehicle types, but the equipment differs enough to require differences in lubricants. And in some cases the equipment is the same, but operating conditions differ enough to affect lube requirements.

Several issues are emerging as the main sources for differences in performance requirements – and as the main areas of current focus for the industry’s research efforts. These include the challenges of thermal management for e-motors and batteries; exposure to higher levels of electrical current in EVs; and the risk of copper corrosion in e-motors. Viscosity, material compatibility, friction management and performance life are also areas that need to be addressed for EV lubricants and fluids.

Today, BEVs and PHEVs are largely using off-the-shelf products developed for ICE engines, but there is consensus that OEMs would like to have more optimized products today and customized solutions will be necessary in the future. 

Viscosity

Increasingly, the trend across the board for lubricants is toward lower viscosities. Viscosity is a key parameter that the lubricant industry and OEMs understand well. In the ICE motor oil segment, lower viscosities have enhanced engine efficiency leading to improved fuel economy. Lower viscosities also provide improved low-temperature performance, but there is always a balance between lowering viscosity, hardware protection and volatility. As viscosities go down, oil volatility goes up, which can be detrimental to the performance of fluid and equipment life. 

Peak performance needs to be maintained throughout the lifecycle of the oil. Advances in base stocks to provide lower viscosities without negatively impacting volatility will be important, and this rules out conventional base stocks as we look at advanced API Group III, polyalphaolefins and maybe even esters. 

Conductivity

The issue of electrical compatibility overarches all EV developments and many of them are associated with hybrids. The power electronics of EVs operate at hundreds of volts, compared with the 12-volt systems in conventional ICE-powered vehicles. Motors are usually powered by alternating current, so the direct current generated by the battery must be inverted to drive them. This all brings new requirements into play.

Electrical conductivity could have a significant effect on formulation and the risks are clear. If conductivity is too high, current will leak with the risk of electric shock and short-circuits in the motor. Conversely, if a fluid is too effective an insulator, static buildup can occur, leading to discharges that could damage equipment. 

There is plenty of evidence in other areas of lubrication that static discharge can damage equipment, so this must be addressed. Currently, ISO 6469-3:2018 specifies electrical safety requirements for protection of persons against electric shock and thermal incidents but does not lead to a definition of what is “too low” or “too high” electrical conductivity in EVs.

Research by additive companies has determined that lubricant and fluid conductivity can be affected by several factors, including viscosity, chemical characteristics of additives and lubricant aging. The effect of fluid viscosity is well understood, in that lower viscosity leads to higher conductivity, because it is easier for a charge carrier to migrate through the fluid. With OEMs asking for lower-viscosity fluids, this could be a significant issue in the future. Increases in temperature also increase conductivity.

Lubricant additives generally increase conductivity, but Afton Chemical researchers concluded that the magnitude of impact varies depending on polarity. Low polar components, such as dispersants and detergents, have relatively small impacts, while others such as friction modifiers, antioxidants and anti-wear agents cause larger increases in conductivity. The clear implication then is that formulators will need to strike the right balance between conductivity and performance. 

The conductivity of an oil increases with use. Lubrizol examined some ATFs during a field trial and concluded that oil oxidation and reduced viscosity led to increases in conductivity. This confirms much first principles conjecture: Oxidation products are more polar, so they either carry charge themselves or solvate the charge carriers, and lower viscosity allows charge carriers to move faster. However, Lubrizol demonstrated that other feasible causes of higher conductivity, such as the presence of wear particles or dissolved metals, were not important.

Since not all lubricants are the same with regards to oxidation rates, the additive package and base stock are key factors in managing conductivity, and formulators should understand how to balance this. 

Interaction between these factors and their relative impact also matter, and there is a lack of consensus on that as well as whether the conductivity of existing fluids is problematic. Afton compared the effect of viscosity and additives when considering the effect of temperatures changes on conductivity. 

Afton and Lubrizol both concluded that chemical additives have a greater impact on conductivity than fluid viscosity. In its 2016 SAE paper on electrical conductivity of new and used ATFs, Lubrizol concluded that “the differences in conductivity between these ATFs, although small, is due to differences in the amount and type of additives used and not to viscosity differences.” While showing that the detergents used contributed much more to conductivity per unit mass of additive in one ATF, the Lubrizol team stressed that, once typical treat rates were taken into account, all additive types impart a significant fraction of the total conductivity.

No conclusion is drawn over whether existing lubricants are too insulating and all products that were tested are in the dissipative range of conductivity. It is also unclear whether conductivity will be an issue. If it is, however, how much can formulators affect conductivity with existing additives and base stocks?

“Our research shows that electrical properties can be influenced in both new and used fluids. We are able to significantly dial in the conductivity contribution from the additive based on the types of individual components used and their relative treat rates. The choice of base oils and the viscosity [of the fluid] also have a big effect,” said Chris Cleveland, R&D manager at Afton Chemical.

Additive companies, including Lubrizol, have investigated electrical conductivity to determine how much of a concern this is. How much does electrical conductivity impact efficiency, components and life of the lubricant, and can the lubricant pose a shock hazard?

To investigate, work was done on actual transmissions. If conductivity is too low, could it lead to static build-up and arcing causing damage to components? Lubrizol found that “lubricants are static dissipative,” so low conductivity generally is not a problem. 

Copper Corrosion

Corrosion is, of course, an issue common to all vehicles, but there are specific challenges in hybrids and plug-ins. Preventing corrosion of ICEs in hybrids can become a bigger challenge than in non-electric cars because in the former, the ICE is used less and therefore will less often reach operating temperatures necessary to burn off fuel and water that collect in engine oil sumps. Oils in hybrid ICEs can therefore become diluted by water and fuel and contaminated by acids, leading to increased wear and corrosion.

Corrosion takes on an additional dimension, however, in electric motors that are integrated into transmissions. This design puts the copper wire windings of the e-motor in direct contact with the lubricant. If the copper is allowed to corrode, two problems can result. First, it could compromise performance of the wires, which create an electro-magnetic field key to the operation of the motor. Second, corrosion can create copper sulfide like the white dust that forms on terminals of conventional car batteries. There is a range of pure copper sulfides with varying ratios of copper to sulfur, many of them electrically conducting. If these collect in certain areas they can bridge insulating gaps leading to electrical shorts.

Formulators can improve corrosion protection by reducing sulfur and phosphorus levels. Unfortunately, sulfur and phosphorus compounds have long been popular agents for protection from scuffing. That suggests a need to balance anti-wear performance with protection from copper corrosion. However, not all sulfur-containing additives create copper sulfide. To date, additives suppliers have been very careful to not mention those additives that cause problems.

To address these issues, the industry will need tests that gauge the level of copper corrosion protection that a lubricant provides. The ASTMD130 copper strip test is a common fresh oil test used that measures corrosion, but some question its relevance in modern transmissions that are exposed to electrical currents during operation. Lubrizol therefore developed a charged wire resistance test to help evaluate corrosion in transmission fluids. The company says this test is a more realistic simulation of the workings of an EV than submerging a copper strip in fresh oil. The test can also be run at realistic temperatures and can be completed in a short period of time.

New test tools such as this one can examine new concerns, such as conductive deposits that can form copper sulfide and can bridge conductor circuits, as well as stray voltage, which can promote corrosion that would not occur without an electric current. How significant a problem this is, is still to be determined, but experience should lead to optimization of a transmission fluid’s ability to tolerate significant electrical current. 

At first glance, the combination of copper contained in electrical circuits or as a component of alloys, voltage and sulfur in lubricants additives would seem like a recipe for trouble. If copper sulfide is formed inside the e-motor and builds up in a similar manner to copper sulfate on battery terminals, then this could be a serious problem.

H1 2024

The first half of 2024 was a challenge for the world’s heavyweight OEMs. Demand for EVs is cooling (but is still warmer than for ICEs), strategies have been retooled and hybrids and hydrogen ICEs are getting another look. The story that dominated the end of the half-year was tariff ping pong between the European Union and China.

In June, the EU busted out with new tariffs – on top of the 10% already in place. A rates are based on the results of four-month investigation into what it considers to be subsidies, and are therefore unfair. Three Chinese OEMs responded to EU request to scrutinize their supply chains and see what helping hands the got for every input. In the end, Brussels settled on an average 21% for those companies that opened their books and 38.1% for those that don’t roll over. 

The Chinese were up in arms, and Western carmakers that are trying to cut costs by manufacturing in China then importing cars back to the bloc also protested.

Implications

The impact of these tariffs is clear. They’ll dampen Chinese OEMs’ enthusiasm for the EU market, but is unlikely to kill it altogether. Income and employment are at stake. But given the hyper-competitive environment among China’s EV OEMs, it won’t be long before that is minimized. Some analysts argue that it’s the hyper-competition that has kept prices low and car tech high in the cars.

Profit and jobs are at stake in the West, too. BMW, Volkswagen and Tesla manufacture in China, and tariffs will impact on the ability of Western OEMs like BMW and Tesla, which produce EVs on slimmer margins than Chinese firms—to export from their Chinese manufacturing facilities compared to China-based automaker.

Beijing’s response has been to hunt for the EU’s pain point and press hard. The Chinese opted to parlay investigations into European brandy and pork imports to ratchet tensions.

Chinese OEMs may decide to set up shop in Europe and its environs, as demonstrated by a new BYD plant in Turkey. Or they might consider the U.S. market where they’re effectively locked out. In contrast with the EU’s more meticulous examination of the Chinese state’s thumb on the scales, the Biden Administration went all the way to a 100% duty on imported Chinese cars. In fairness, Biden was only carrying on where Trump had left off. Even though the World Trade Organization castigated the U.S., both administrations ignored the WTO’s rules. Besides, carmakers and governments are privately happy with the situation as it makes their own cars more competitive.

Asia is an area so culturally and geographically diverse that it would paint a false picture trying to characterize it vast swathes of rural landscape interspersed with mega-cities jammed with honking horns and belching exhaust pipes. But what is evident is that over the next decade, a population the size of China to surpass the income threshold to be able afford a car.

There are other hurdles to overcome. More than 800 million people without access to basic electricity services and nearly 1.9 billion still using such as wood, charcoal and dung for cooking and heating, people are unlikely to prioritize buying an EV over a fridge.

Still, the region that includes powerhouse economies of China, India, Vietnam, Thailand and Indonesia are set to outpace the rest of the world in vehicle sales in the near future. Some governments in the region are looking to EVs as part of a solution to the problem chronic pollution and energy independence.

“Thailand and Vietnam would be the two major forefronts,” Eric Yip, marketing director of Quantel, an Asian company focused on clean energy and electricity, told regional media. The market in Vietnam is growing, especially for electric motorcycles, known as e-motorbikes. And in Thailand, the EV market is expected to reach 1.2 million units within the next few years. “This makes Southeast Asia quite a big market,” Yip said.

Countries are encouraging car companies and trade groups to help make EVs more accessible to the people. In Vietnam, Vinfast, the country’s first carmaker, released a line of electric scooters. The Philippines Department of Energy partnered with the Asian Development Bank to introduce e-tricycles that run on lithium-ion batteries. Singapore announced a series of incentives to grow the country’s EV population and phase out ICE vehicles by 2040. In late 2018, its Land Transportation Authority awarded a tender to three companies for the first 60 electric buses.

Many Asian automakers are transforming and adopting EV technology, and some have started building components instead of an entire EV. Yip added that most of the key components for EVs, such as batteries, will soon be manufactured in Asia, possibly making the region a major global source for parts.

However, there are still hindrances before EVs overtake ICEs in the region, including higher tax rates on EVs, a shortage of charging stations and limited range. Analysts have suggested more government intervention is needed to drive growth of the sector, and Yip told the EE Times Asia in June 2019 that similar incentives such as London’s ultra-low emission zones, which charge certain vehicles an entry fee to drive in the city, could be a viable incentive. 

“I believe that the Vietnam government is looking at moving in this direction,” he said. “To only allow electric vehicles on the roads of the cities. They are planning this soon.” 

Since petroleum is relatively cheap and there is a lack of battery charging stations in certain Asian countries, some analysts said, it will be difficult for government legislation and regulations to work. Even if governments fast-track charging stations, at least five years are needed before the infrastructure is in place to handle demand. 

China

Chian is the biggest producer and user of EVs. The government to date has ploughed huge incentives into low- and zero-emission vehicle ownership and manufacturing, as well as clean energy – much to the chagrin of the European Union, which in June slapped Chinese OEMs with tariffs.

EVs in China are not subject to registration restrictions or driving bans on certain days in certain cities. Purchase incentives have supported high demand for EVs in the country so far. 

All this looked set to cool down when in 2019, the government announcement it was scaling back on subsidies for EVs. It said the move was meant to encourage local manufacturers to rely on innovation instead of handouts. Beijing said it intended to eliminate subsidies after 2020.

The subsidy for BEVs with a driving range of 400 km and above was slashed by 50% to €3,700 from €7,300 per EV, according to the government, adding that to qualify for any subsidy an EV must have a driving range of at least 250 km. Purchase incentives are expected to be cut entirely after 2020.

Immediately after the roll-back announcement, stocks of China’s largest EV manufacturer fell nearly 4.2%, while another EV maker’s stocks fell 3.5%. BAIC Blue Park New Energy Technology Co. said it may increase EV pricing going forward amid “certain and even relatively huge” pressure on the sector. 

Then came the announcement in December 2020 by the Ministry of Finance that would reduce tax breaks for EV buyers by 20% from last year’s level, equating to an average of $550. A mandate was also passed requiring EVs to make up 40% of automakers’ sales by 2030.

“While financial support for purchases has fueled the rapid growth of China’s electric car industry, there are concerns that automakers have become overly reliant on them at the expense of developing new technologies and better vehicles,” Bloomberg reported.

Over the past 10 years, some analysts estimate that China has pumped $60 billion into its domestic EV industry and now controls between half and three-quarters of the global supply of raw materials for EVs, according to a study by the Yano Research Institute. 

In 2018, China had more than 1 million EV sales (more than all other countries combined), is home to 99% of the world’s 250 million electric scooters and has 99% of the globe’s electric buses, according to a number of sources.

Now, Europe has passed China in EV sales, though China still leads in electrified two- and three-wheelers and buses.

“It’s very important for the governments to take the necessary steps to promote indigenous manufacturing of lithium-ion cells for EV batteries,” said Sri Harsha Bavirisetty, chief operating officer at Gayam Motor Works, adding that Beijing controls the vast majority of lithium and cobalt – two vital minerals for EV batteries – through joint ventures or outright purchasing of mines in Congo, Chile, Bolivia and Australia, leaving other carmakers, such as Tesla, far behind.

South Korea

EVs are also turning heads on the streets of South Korea, since a large number of motorists still cannot fathom the transition from an ICE vehicle to an EV because of economics, though the tides may be starting to turn.

The latest figures report there are 140,000 electric cars being driven in South Korea, up from 10,000 in 2016. The market share of BEVs and PHEVs in the country is at more than 2%, while there are almost 10,000 public chargers in the country with plans to install 3,000 more throughout 2021.

Currently, South Korea provides a little over $17,000 in purchase subsidies for EVs that cost up to $52,000, and half that amount for EVs that cost between that and $80,600. They also enjoy a 50% reduction of tollgate fees and free or reduced parking at public parking lots. However, proponents of EVs said more is needed to encourage purchases and usage. 

Japan

Across the Tsushima Strait, Japan has the third-largest fleet of plug-in vehicles in the world, after China and the U.S. The government aims to reduce vehicle greenhouse gas emissions by 80% by 2050 through a combination of hybrids, PHEVs, BEVs and fuel-cell vehicles. 

The country’s investment in EVs is not new. Its postwar gasoline shortage gave birth to a small EV industry that in 1947 produced the Nissan Tama, an adorable cream-colored two-door mini-car. Now, Japan’s auto industry is famous for the world-dominating Toyota Prius, the bestselling hybrid ever, and the Nissan Leaf, which is cruising toward sales of half a million.

The government has offered generous incentives since the 1990s, when there was a 50% purchase subsidy. These days, the incentives are less enticing, but zero-emissions vehicle buyers still qualify for a grant $7,300 dollars after the government doubled its offered subsidies at the end of 2020, depending on the vehicle’s range. The most generous subsidy offered today is up to $11,400 for FCEVs.

In January 2020, it also signaled continued support for EVs with a mandate to end the manufacture of new ICE vehicles beginning in 2030. This will be aided by a $20 billion for investment in reducing the cost of battery manufacture $96 per kilowatt hour, as well as money for improving electricity generation infrastructure, something that many jurisdictions seem to ignore.

The country also has a network of more than 18,000 charging stations, and there are plans to have a charge point every 15 km.

Lastly, the country is also considering cradle-to-grave implications of EVs. 4R Energy Corporation, a joint venture between Nissan and Sumitomo Corp, has opened a battery recycling plant to refurbish Leaf batteries in the town of Namie, devasted by an earthquake in 2011. Toyota intends to reuse retired batteries to power freezers and ovens in Japan’s 7-Eleven convenience stores. 

Two countries where EV numbers are expected to skyrocket in the next few years are India and Indonesia, both in terms of manufacturing and consumption. Both countries have a burgeoning middle class and a desire to either increase or start a domestic EV manufacturing industry. But an obstacle stands in the way – relations with China.

Indonesia

Indonesia is pushing for the development of EVs and battery production facilities to create a downstream sector to exploit the nation’s rich deposits of nickel, which is used in lithium batteries. The country also hopes to start producing EVs in 2022, after a number of auto manufacturers, including Japan’s Toyota and South Korea’s Hyundai, announced plans to invest in the country’s nascent EV manufacturing industry. In July 2019, Toyota announced that over the next five years it plans to invest $2 billion, including EVs.

By 2025, the government estimates, EVs will have a 20% share in the nation’s auto market, which is dominated by two wheelers. Meanwhile, the government cut tariffs to 0% for PHEVs earlier this year. The country also offers tax holidays to companies manufacturing EV batteries.

India

In July 2019, India witnessed its worst month in passenger car sales in 20 years, as purchases plummeted 35% from the year before. But in the same month, the country’s bestselling carmakers – Maruti, Suzuki, Tata Motors and Mahindra – announced their EV plans. In a country where four-wheeler EVs account for 0.1% of India’s car parc, some met the announcement with arched eyebrows, including major shareholders in some of those companies.

The government’s FAME program – in full, Faster Adoption and Manufacturing of Hybrid and Electric Vehicles – was launched in the same year. The scheme, which mostly targets two- and three-wheelers, was set to run until 2022 but was extended until 2024. FAME’s purpose was to encourage localization of EV manufacturing.

Indian carmakers’ shift from ICE vehicles to EVs is in line with a very ambitious government target announced in 2017 of 100% new EVs sold by 2030. This was walked back to 30%, but it is still a lot of vehicles. This includes three-wheelers manufactured in India by 2023 and two-wheelers with an engine output equivalent to less than 150 CC by 2025, according to Indian news outlets. The government said the reason for the shift was to curb rising air pollution and mitigate dependence on imported oil. The country is the world’s fourth-largest car market and has some of the most polluted cities on Earth.

Trying to advance EVs is nothing new in India. A decade ago, the Ministry of New and Renewable Energy gave incentives to carmakers to produce EVs. Then in 2015, the administration of Prime Minister Narendra Modi earmarked $140 million for infrastructure development, incentives, research and development and pilot projects.

Then in 2019, Modi’s budget reduced the federal sales tax on EVs from 12% to 5% and on chargers from 18% to 5%. Additionally, EV buyers were given exemptions on certain taxes, and import duties on lithium-ion cells were removed.

Modi’s action has caused jitters among the car industry, which constitutes about 15% of India’s economy. The industry voiced concerns over time frames for transition from ICEs, while complaining about the lack of charging infrastructure.

“The response forced the government to soften its stance and clarify that its policies would allow internal combustion engines vehicles and EVs to coexist and grow,” according to an article in This Week in Asia.

Given the opposition from the powerful and well-funded Indian auto lobby, sector analysts predict the adoption of EVs in the market is still a fair way off and are wary of the government’s timeline for EVs cruising the streets of New Delhi and Mumbai. 

The analysts said the pace of reform is too fast for EV manufacturers, infrastructure and resources. For example, in March 2019, the Modi administration mandated EV manufacturers should produce 50% of their components locally to benefit from subsidies, which proved to be a hard punch for the market. In response, EV sales slumped from 12,000 a month in March to just 300 in April, according to the Society of Manufacturers of Electric Vehicles. 

“An industry which is not even 1% of market share cannot possibly replace the sector 100% within three years,” said Alok Ray, assistant director of the Society of Manufacturers of Electric Vehicles. “What we need are more subsidies, robust models for consumers, a cleaner road map like setting up charging centers and unambiguous regulations to streamline the commercial usage of vehicles.” 

Indian media reported Modi’s government plans to target India’s 10 most-polluted cities, including Delhi, Bangalore and Gurugram, which host about one-third of the nation’s vehicles. 

“I will not say it is sustainable in terms of short-term goals – it is more of a vision from the government’s side. Even the major auto players are not wholeheartedly supporting [the government’s initiatives], and consumers are not fully ready to embrace EVs,” Puneet Gupta, advisor at market research firm IHS Markit, told local media. “Most of the auto giants are still keeping EVs as a backup option as the industry is still nascent, and they do not know how it will shape up regarding [government] policies and investments.” 

Not a great deal is happening down under in the EV scene. No cash is on the table for buyers, only tax breaks worth in the hundreds of dollars. The New Zealand government’s Electric Vehicles Program aims to get 64,000 EVs on the road by the end of 2021, but it only offers EVs exemption from road user charges until they make up 2% of the fleet and reduced national accident compensation fees. Australia’s EV incentives are virtually non-existent beyond breaks on luxury car tax and stamp duty. An outgoing Labour government had pledged to develop an EV policy but failed to win the 2019 election, and the policy evaporated.

The European Union tried to stanch the flow of affordable Chinese electric vehicles by slapping on substantial tariffs that it believes will protect the bloc’s automotive industry and its 13 million workforce.

China is Europe’s biggest trading partner and in 2023 sold almost U.S.$11 billion-worth of EVs to Europeans. Chinese cars are up against some of the biggest and most well-established cars companies in the world, such as VW Group, BMW and Stellantis.

The tariffs follow an EU investigation into China’s automakers launched in October. It considers favorable government loans to be subsidies, which disadvantages European carmakers and makes production of unfairly cheap. Some believe that intense competition in China’s EV market led to innovation that has driven down costs. Europe’s car companies struggle to compete with those costs.

Tariff rates were set depending on whether companies cooperated with the EU’s probe. BYD, the world’s largest EV maker, and Geely will face tariffs between 17% and 20%. At the upper end, state-owned SAIC will get 38% for not playing ball. This is in addition to the 10% already in place. European marques that produce in China and export to Europe will pay 21%.

China’s commerce ministry called the measure an “ill-informed and lawless” act of protectionism.

The EU will vote next week on whether to increase tariffs on electric vehicles imported from China, a move that if implemented would cost the Chinese U.S.$4 billion in trade. The Chinese have threatened to retaliate with tariffs on European aviation and agriculture.

China is the world’s largest EV maker and the European Union is the third-largest economy, making the bloc an essential part of Chinese OEMs’ profits, especially as sales are slowing at home and the United States hiked tariffs to 100%. There are also a number of joint ventures between European and Chinese carmakers that could be in jeopardy.

The Chinese were hoping to persuade Spain’s EU parliamentarians to block the vote. Commerce Minister Wang Wentao said while visiting the Chery-Ebro joint venture factory in Barcelona vowed his government would take all necessary measures to defend the legitimate interests of Chinese companies, reported Chinese media.

German automakers are looking to strike deals with Chinese counterparts to gain access to the market and help lower costs on expensive homemade cars. VW and BMW in April pledged more than $5 billion to expand research and production in China. In 2023, almost 29% of cars made by German automakers were sold in China, trade data shows.

Flooding the EU market with cheaper EVs built overseas could be detrimental to the continent’s passenger car motor oil and metalworking fluid producers. EVs do not use engine oil and fewer moving parts means less need for MWFs for achining.

The fervor for battery electric vehicles is cooling. OEMs are rethinking strategies that were perhaps a touch optimistic, but growth remains robust. Still, there is much variance among forecasts over the long-term EV fleet growth projections. They will be a key factor in the impact that EV sales have on passenger car motor oil volumes. But with fewer parts in an EV compared with an internal combustion engine, metalworking fluids will take a hammering too.

In 2023, registrations of BEVs hit 250,000 per week globally. That’s more than double the annual total in 2013. This upward trend continued through one of the worst pandemics in a generation. Most surprising was the collapse of the internal combustion engine vehicle market.

The consensus among analysts and EV proponents is that this trend will continue. But how steep it will climb is open to speculation. Some of that variation probably stems from the core interests of different organizations, some of which are outlined below.

The global population of battery-powered and plug-in hybrid cars has been growing rapidly and is expected to continue doing so. That does not mean, however, that forecasts assume a continuation of the status quo. After the pandemic, sales slowed but growth predicted for coming decades is positive. Moreover, it will be driven by quite different factors. Based on trends in 2023, global annual sales will reach 16 million units by the end of 2024.

During those years when the rate of growth is sharply increasing, the reasons for the growth would also be evolving. Until now, government incentives have been one of the main factors for increasing numbers of consumers to buy EVs. EVs offer their own built-in financial incentive. Owners can stop (in the case of BEVs) or largely reduce (PHEVs) money spent on fuel. To date, however, that savings would more than be offset by the bigger price tags that EVs carry.

For model year 2024, battery-powered sedans in the US cost between U.S.$45,000 and $55,000 depending on range. That compares to around $32,000 for a typical ICE car in the same size category. The electric premium widens to between $9,000 and $17,000 for crossover BEVs and $11,000 to $20,000 for sport utility vehicles. Those are very large upfront cost differences – too large to overcome for most car buyers.

Recognizing this, governments have offered a variety of carrots aimed at reducing the cost of buying and owning EVs. These range from exemptions on sales or personal property taxes to free parking and ferry rides, but the biggest are direct payments to subsidize purchases. To date, 90% of EV purchases have occurred in some dozen countries, and in all of them national and/or local governments offer large subsidies, in some cases exceeding $10,000 per vehicle in some countries.

In most cases, at least, subsidies were never intended to be permanent. Indeed, governments have good reason to eliminate them because the bill for such payments rises rapidly as EV sales shoot up. Some are already winding down. In June of 2019, China eliminated subsidies that it pays to manufacturers of EVs with range of less than 250 kilometers and cut in half its subsidies for those with longer ranges. In the US, federal subsidies were conceived as applying only to the first 200,000 in sales for any one model.

Private Sector Perspectives

The most aggressive prediction for the highest number of EVs on the roads in a given timeframe is by Bloomberg New Energy Finance, which expects registrations to reach 16.7 million units by then end of 2024.

Its forecast in 2021 turned out to be conservative. BNEF predicted sales of 4.4 million units. The number was 6.75 million, according to e-mobility vehicle data provider EV Volumes. Then by 2026, BNEF expected 10% of global passenger vehicle sales, rising to 28% in 2030 and to 58% in 2040. In fact, by 2023 sales reached almost 18% of passenger car at around 14 million units.

EV Volumes, part of automotive data company JD Powers, predicts annual global EV sales doubling to 29 million units in 2027. Contrary to BNEF, it thinks the global share of EVs will be more like 22.6% in 2025 and 35% in 2028.

Financial services consultancy EY thinks BEVs and plug-in hybrids will account for 55% of global vehicle sales by 2030.

In its December 2020 forecast, the U.K.-based research company IHS Markit estimated EV sales would grow by 70% in 2021 to 3.94 million and then to 11.26 million vehicles by 2025, a compound rate of 52%.

Agency Views

In its Global EV Outlook 2024, the Paris-based International Energy Agency presents three pictures. First is the Stated Policies Scenario, which considers the effects of existing government policies and objectives, as well as announcements by carmakers on their EV manufacturing plans and uptake.

It predicts the global EV stock (excluding two/three-wheelers) will grow from less than 45 million in 2023 to 250 million in 2030 and reach 525 million in 2035. IEA thinks that in 2035, more than a quarter of vehicles on the road will be electric. On average, the EV stock will grow by 23% per year from 2023 to 2035.

In its 2021 outlook, IEA’s Stated Policies Scenario predicted the global EV stock (excluding two/three-wheelers) will grow from the 11 million is calculated for 2020 to 145 million by 2030. This represents growth of roughly 30% and foresees EVs accounting for 7% of the road fleet.

To achieve this, annual sales would have to reach 15 million in 2025, which at today’s rate seems doable, and more than 25 million in 2030, representing 10% and 15%, respectively, of all road vehicle sales. The agency also thinks that if governments apply more pressure to reduce fleet average emissions on automakers and incentivize consumers to buy EVs, the fleet could hit 230 million units.

In what IEA calls its Announced Pledges Scenario, the stock of EVs in 2035 will reach 585 million in 2035 and almost a third of the vehicle fleet will be electric.

The IEA’s Net-zero Scenario, the fleet of EVs will grow at an average rate of 27% per year until 2035, culminating in a fleet of 790 million, excluding two and three wheelers.

The U.S. Energy Information Agency is one of the most cautious. Its first prediction in 2011 had sales of battery EVs in the U.S. at fewer than 500,000 units a year by 2035. Its current prediction in the Annual Energy Outlook 2020 puts the figure in the region of 1.9 million by 2050, with PHEVs climbing to 900,000 sold per year by the end of the same period.

None of the organizations mentioned above offer estimates on the effects EVs will have on PCMO demand, but such wide variations would have an impact on volumes. EV uptake in Oronite’s 2018 analysis was significantly higher than any of these other projections, and it is safe to say the impact would be less under those scenarios.

Oil Company Forecasts

Since its last analysis, named the Sky Scenario, Shell has been shedding hydrocarbons refining assets and buying up EV-related companies at a speed that would make Elon Musk blush.

Over the past few years it has invested in Greenlots, a Californian charging network startup; Newmotion, a Dutch electric charging company with 30,000 charge points; and another Californian charging startup called Ample. Shell also signed an agreement with Ionity, a European charging network operator, and acquired Sonnen, a German energy storage and home EV charging business.

In January 2021, Shell announced it would buy up Ubricity, the U.K.’s largest public EV charging network. A few months later, it joined with charging equipment company Alfen to develop a battery-backed ultra-fast charging system in the Netherlands.

The supergiant oil company predicted that more than half of new car sales around the world will be electric by 2030 and all of them by 2050. This might seem surprisingly bullish for a corporation whose core business is petroleum, but Shell has a vested interest in EVs. It says it will install 2.5 million charge points by 2030.

In BP’s most recent Energy Outlook, it set out three scenarios for the energy transition. In its Accelerated and Net Zero scenarios, the number of EVs (including battery, plug-in hybrid and light-duty electric trucks) would increase to between 550 million and 700 million by 2035 from 20 million in 2021. E-mobility will account for 30-35% of the vehicle parc by 2035. This, BP thinks, will hit 2 billion such vehicles by 2050, or around 80% of the parc.

By the mid-2030s, most new car sales will be electrified. Tighter emissions regulations and lowering cost from the competitiveness of electric cars will make this happen.

BP’s New Momentum scenario thinks there will be 500 million such vehicles by 2035 and 1.4 billion by 2050. New Momentum has EVs making up 40% of new car sales in 2035, rising to 70% in 2050.

In its 2021 Energy Outlook, BP laid out a couple of scenarios for the adoption of EVs. In scenarios where policy adoptions to combat global emissions happen at a more rapid pace, EVs account for 30% of four-wheeled vehicle miles traveled on roads in 2035, increasing to 70-80% in 2050. If efforts to fight global emissions remain at the same pace as the last few years, the share of miles traveled drops to 10% in 2035 and 30% in 2050.

Similarly, BP predicted that EVs would account for 80-85% of the stock of passenger cars in more optimistic scenarios. Meanwhile, the market share will be 35% in 2050 at the current rate.

Like its Anglo-Dutch rival Shell, BP has laid out lots of money for a handful of EV-related businesses: the charging network company Chargemaster, ultra-fast charging lithium-ion battery developer StoreDot, mobile rapid EV charging technology firm FreeWire and PowerShare, one of China’s leading charging platforms.

ExxonMobil, the biggest oil company in the world, predicted in its 2019 Energy Outlook that what it calls “advanced vehicles” (hybrids, plug-ins and fuel-cell cars) will grow to occupy more than 20% of the vehicle fleet, or some 420 million units, and 30% of new sales by 2040. The U.S. giant has been slow to invest in EV charging infrastructure companies and start-ups. However, although it did signal in January 2019 that it was mulling entering those sectors.

According to Andrew Logan, oil and gas program director at nonprofit sustainable investing organization Ceres, “This move suggests that a cultural shift may be underway … [in] the most bearish of the oil majors on electric vehicles.”

OPEC, typically more downbeat than ExxonMobil, puts EVs at 430 million by 2045, or 17% of the global fleet.

Monthly new passenger car registrations in the European Union declined for the first time in 2024, including battery electric vehicles, which had been on a constant trend upward the past year.

Registrations of all passenger cars fell by 5.2% year-on-year to 1 million units, according to statistics provided by the European Automobile Manufacturers’ Association (ACEA). BEV registrations fell by 11.3% to 134,397 units. While sales in Belgium and France were up by double digits, neighboring Germany slumped by almost 30%. Non-plugin hybrid sales rose by 12.6% while plugin hybrids fell by 6.5%.

ACEA ascribes the downturn to the Easter break and the general economic hardships faced by many, with the four largest markets Germany, Spain, Italy and France the most affected.

Over the course of first quarter, registrations of all cars increased by 4.4% in real terms during, reaching nearly 2.8 million units. January and February both outperformed the same months the year before.

The first quarter of 2024 ended with a total of 332,999 new battery-electric cars, 3.8% up from the same quarter 2024.

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Sales of both hybrid and battery electric vehicles in Europe continued growing in February, according to statistics gathered by the European Automobile Manufacturers’ Association.

BEV sales were up by a modest 9% to 106,187 units, with Belgium leading France and the Netherlands as the three biggest buyers that month. Sales Germany were down by more than 15%. By contrast, registrations of non-plugin hybrids jumped by nearly 25%, with France ahead of Spain, Germany and Italy consuming a combined 70% of the 255,511 vehicles sold.

Plugin sales were up by almost 12% to 64,351 units, with Germany, Belgium and Spain with the highest demand.

Non-plugins made up 28.9% of the market, BEVs 12% and plugin hybrids 7.3%.

While it’s true that some OEMs are rethinking their EV strategies, electric vehicle sales continue growing and there has been no catastrophic collapse, contrary to some media reports.

Sales were up by about 50% year on year in 2023 and Bloomberg NEF projected an increase by 30% this year. The rate of growth is slower, but hasn’t fallen off a cliff and is still more than any other vehicle category. The numbers are also good for adoption, with 38% of consumers surveyed in the United States saying they intend their next vehicle car will be an EV and 27% are considering one in the future, according to a survey by Boston Consulting Group.

That said, Ford and GM have both delayed plans for EV expansion. Tesla is feeling the pinch of scanter sales by fiddling with prices. In Europe, Volvo plans to transfer some of its stake in EV company Polestar. The company follows Volkswagen Group, which expressed doubts that its battery manufacturing unit PowerCo is a viable. Mercedes is also disappointed by sales, say reports.

“It’s true, the pace of EV growth has slowed, which has created some uncertainty. We will build to demand,” General Motors CEO Mary Barra said on an earnings call.

Growth for 2024 falls well short of industry predictions of 70%, not assisted by higher purchase prices before incentives. But with high interest rates globally, all vehicle sales have slowed. OEMs also have plenty of challenges yet to overcome before EVs go mainstream. These include concerns from consumers, fleet buyers and their own capabilities to produce at volume and be profitable. Inventory is backing up, EVs are selling at a loss, rental companies are not buying and drivers have less cash.

Driver behaviours in gasoline-powered cars may influence electric vehicle design, according to e-mobility researchers in a new study.

Professors Frances Sprei of Chalmers University in Sweden and Willett Kempton of the University of Delaware, U.S., suggest a change of mentality could lead to more effective charging methods, help new EV buyers adapt and inform planning of charging stations.

New EV drivers tend to regard the battery the same way as a fuel tank, and fill up with charge when needed. These fueling habits can lead to range anxiety when there isn’t enough charge to complete a journey, enough time to charge or no access to a charger when needed.

In response, carmakers have increased battery sizes, which ups weight and costs. Kempton and Sprei suggest a change of mentality could save time charging and increase demand for cheaper cars.

“Liquid fuels and electricity have really different characteristics related to refueling. The prior focus has been on the much longer time for energy transfer with EVs,” Kempton told Lubes’n’Greases.

Drivers who habitually charge their cars when not in use complained less about range anxiety, inconvenience or waiting to charge, the researchers found.

Kempton and Sprei project that an EV with a smaller battery would be sufficient for many drivers following this habitual model. It would only require en-route charging for a few days a year and allow them to buy a lower-cost, lighter EV that meets their needs.

“A few people have travel needs requiring large batteries, but others may only be motivated by ‘buyer’s range anxiety.’ We found that if EV drivers develop habits like charging during a set daily event – overnight when asleep, or at work – they have less anxiety and spend less time thinking about charging,” Kempton said. “Many experienced EV uses had over time developed fueling habits that were easier and which could actually make EV charging faster – in driver time used – than liquid refueling.”

Like him or loathe Elon Musk, the Marmite CEO of car company Tesla has revolutionized the passenger car business from root to branch. From the cars themselves to the sales model and the way the plants are powered, the game has changed and legacy original equipment manufacturers are scrabbling to respond. Tesla is also a useful barometer of the EV market overall.

Tesla is often in the news, occasionally for the wrong reasons, such as when Musk bought social media company Twitter. He dismayed investors and sent the company’s already-high stock price into free fall. Tesla stock is a rollercoaster, taking investors on stomach-wrenching rides from all-time highs to crashing lows. Sinking money into rockets that could make a “rapid unscheduled disassembly” could also prove costly to the company’s health.

European Woes

Tesla is mulling making cars for the Indian market at its Berlin gigafactory, which reopened in early 2024 after German environmentalists were accused of setting fire to electricity supply infrastructure near the plant. Protestors are angry about trees being cleared to make way for the plant’s expansion. Berlin was producing an estimated 6,000 cars per week at the time.

German auto unions were also not best pleased with Musk’s employment practices. A court ruled in February 2024 that the company had flouted union election rules. Musk is publicly anti-union and has been effective at keeping them out of his plants even though pay is subpar, hours are long and injury rates are high, allegedly. There are, or have been, industrial disputes between workers and management in the US and Sweden as well.

India

The decision to produce cars for the Indian market in Germany comes ahead of a Tesla delegation that will look for locations for a plant in India. Like neighboring China, India has a vast population with a growing middle class. Indians buy 1.5 million EVs per year. Even though most of them are two- and three-wheelers, people are already comfotable with electric mobility.

Great Sale of China

In China, where Tesla makes one-third of its cars, production from the Shanghai factory has been patchy over the past three years. President Xi Jinping’s zero COVID policy kept the plant closed for weeks on end in 2021 and 2022. Shutdowns in May 2022 due supply-chain issues; December 2022 because of COVID; and in February 2023 and May 2023 for upgrades. The company lowered prices for some models in October 2022, January 2023, twice in August 2023 and in January 2024.

But in the topsy-turvey world of Tesla, as the company’s value took a hammering, sales dipped and Musk played at being a media mogul, the company launched two new models in Thailand.

Competition

The California-based independent carmaker dominates the global battery electric vehicle market. It has outsold every EV maker bar none, having delivered almost 2 million BEVs in 2023. Only now is the competition catching up with technology and sales after Tesla has been operating for 20 years.

Tesla is not the only game in town. Carmakers in Europe and Asia are chipping away at Tesla’s market lead in sales and range. Volkswagen delivered 293,000 EVs in 2022, an increase of 25% year on year, and China’s BYD is working to knock Tesla off the top spot at home. The Chinese company sold more EVs in January 2024, when including hybrids, but fell short of outdoing Tesla on pure BEVs.

BYD’s CEO Michael Shu bristled at the comparison, telling Automotive News, “BYD has a vast of portfolio of brands and technologies —  including our state of the art plug-in hybrids — while Tesla is electric cars only with a single brand. We are two very different animals.”

In April 2024, Tesla shelved plans for a low-cost model fearing the competition from Chinese OEMs was too fierce. The company hoped the car could unlock the mass market and please investors.

Policymakers have also snubbed Tesla. Along with Lucid and Rivian, President Joe Biden did not invited the company to the White House EV summit in August 2021. The cold shoulder showed Detroit and its unionized workforce are still a force to be reckoned with. Biden’s Bipartisan Infrastructure Law earmarked U.S. $7.5 billion for a national network of 500,000 chargers, $7 billion to domestic battery manufacturing and $10 billion for clean transit and school buses.

While Tesla still dominates the EV market, its vaunted position is coming under attack from competitors around the world as well as a general sales cooling off.

A suspected arson attack on a nearby electricity substation halted production at Tesla’s Berlin Gigafactory in Gruenheide on the outskirts of Berlin. Elon Musk, the company’s CEO, said the attack was “extremely dumb.”

The Berlin Gigafactory and surrounding area suffered power outages, media reported. The plant will be closed until further notice, costing the company millions of dollars and leaving more than a thousand cars unfinished on the production line.

German media reported that local environmentalists were responsible, which the police neither confirmed nor denied. Since last week, activists have occupied a section of forest that Tesla intends to clear to make room for an expansion of the plant.

A 2,500-word online letter purportedly from the an activist group called the Volcano Group claimed responsibility. “Tesla consumes earth, resources, people, workers, and in return spits out 6,000 SUVs, killer cars and monster trucks each week,” the letter said.

“These are either the dumbest eco-terrorists on Earth or they’re puppets of those who don’t have good environmental goals,” Musk said on his social media platform X (formerly Twitter). “Stopping production of electric vehicles, rather than fossil fuel vehicles, ist extrem dumm.”

Tesla Berlin has capacity to produce 500,000 cars per year and the expansion could allow the company to double production. The plant’s 12,500 employees were sent home and the company’s stock fell 3%.

There are several categories of alternative fuel vehicles. Many use lubricants similar to those seen found in conventional internal combustion engines. There is ongoing development of fluids optimized for hybrids and battery electric vehicles, as well as hydrogen and hydrogen ICE cars. But what is different in the lubrication needs for hybrids and EVs and how can lubricants provide optimum performance?

Current lubricant technology has been found acceptable for hybrids but has not been optimized for them, as OEMs continue driving toward lower viscosities in the conventional lube space and SAE 0W-XX-type products are rapidly growing. Indeed, Japanese OEMs are looking at SAE 0W-8 and 0W-12 engine oils and have just introduced JASO GLV1, which is the first industry specification allowing these grades. Three European OEMs – BMW, Daimler and VW – are considering SAE 0W-12 and 0W-16 for passenger car gasoline and diesel engines, in efforts to meet the latest European Union fleet emissions requirements across their platforms, which are increasingly electrified.

Mild Hybrids

Mild hybrids, also known as power- or battery-assist hybrids, have an ICE that still does most of the work and a small 48-volt electric motor on a separate electrical system from the onboard electronics that boosts power and allows the ICE to turn off when the vehicle coasts, brakes or stops. They have advanced transmissions and often feature regenerative braking but do not have a large battery to store the generated energy. 

In a mild hybrid, the ICE turns off repeatedly during city driving because of the frequent stops, and this causes the engine oil’s operating temperature to fluctuate. Of course, for most, these engines’ typical driving cycles will also include continuous highway driving, allowing for fuel and water to vaporize. Current lubricant technology appears to be fit for purpose for these conditions. 

Typically, the e-motors in mild hybrids have been a mix of 12 and 48 V systems, but as OEMs move toward making more 48 V full hybrids, and engines operate less, stress on the lubricant is likely to increase, but at least today, no one is sounding the alarm.

A few years ago, OEMs rolled out 48 V systems, and expect half of all hybrids to use them by 2025. They provide four times the voltage and power to provide better acceleration and an improved driving experience. This is noteworthy because it demonstrates how fluids used in these systems will be exposed to more electrical current as we drive toward greater electrification of the global car parc.

Time will tell if increased voltage will drive the need for improved lubricants that can deal with higher current along with the different operating cycles ICE engines will experience, as well as anticipate potential but unknown issues. It should also be noted that if the cost of these 48 V systems is competitive, this will impact the pace of change from mild to full battery EVs. 

Full Hybrids

Full hybrids have similar features to mild hybrids, but have larger batteries and e-motors that allow the ICE to turn off and for the e-motor to take over during various operational states. The ubiquitous Toyota Prius has been successfully operating on the same lubricant technology as standard ICE vehicles since its inception more than two decades ago.

Like mild hybrids, full hybrids see more extreme start-stop conditions for the ICE and can operate on battery-only mode, in series or parallel with the ICE, for longer periods. However, in battery-only mode, lubricants and some transmission functions are not turning over during idler functionality but are subject to vibration and potential fretting corrosion. To date, there has been no hard evidence gathered that suggests this is a concern, however. 

Because their e-motors are used more, ICEs in full hybrids are used less, which means more extreme periods where the lubricant is cycling at lower-than-operating temperatures and the potential to absorb moisture or fuel increases. These conditions can lead to fuel dilution and lower viscosities, where wear and sludge can become a serious issue over time. Fuel dilution decreases viscosity, while water, which is most likely to accumulate and form emulsions, will increase viscosity and both will reduce the life and performance of the lubricant. 

Plug-in Hybrids

Plug-in hybrids have a large battery that powers an e-motor, as well as having a small ICE that serves both as a range extender and charges the battery, as with the Chevrolet Volt. PHEVs may be an intermediate step toward full electrification but are also more complex than pure BEVs. Moreover, as battery technology improves and ranges increase, it would not be surprising to see automakers move away from PHEVs. Although powertrain designs in this category differ, along with capability of the ICE, the general concept is the same. 

There are two major types of PHEV architecture – parallel and series – but both use ICEs and e-motors, battery packs, generators and controllers. In parallel designs, the ICE and e-motor connect to the transmission so that either can directly propel the vehicle. A controller dictates which motor is running at any particular time. In series design, only the e-motor connects to the transmission, so propulsion is always supplied by that motor, which draws power from the battery pack or the generator. ICEs in this case are used only to generate electricity, so they are smaller. A controller in the transmission determines how much is needed and whether the e-motor draws from the battery or generator.

Parallel designs are better suited for highway operation because they are more efficient than series configurations when being driven at relatively constant speeds. Parallel designs are less suited, however, for city driving because the ICE is liable to be providing propulsion during stop-start conditions. This requires instantaneous delivery of full power, which can strain the ICE and can also lead to instances where oil does not immediately flow upon start up.

Ranges of both types of PHEVs are increasing. The first-generation Chevrolet Volt, for example, has a series design and had a range of 56 kilometers in battery-only mode and 610 km with a single tank of gasoline for the ICE range extender. The 2019 Volt can travel about 85 km on the battery and 692 km in total. 

Parallel architectures are less common, but one example is the BMW i3, which has a Kymco-made scooter engine. The basic i3 has a battery range of 116 km going up to 240 km with the range extender in operation.

Common to all three hybrid categories above is that they require varying quantities of engine and drivetrain lubricants. Advances will continue for lubricant technology as operating conditions change, but the foundation is well established. 

It is generally expected by many legislators, the auto industry and lube companies that over time full BEVs will become the powertrain of choice, as battery range, charging infrastructure and consumer confidence grow. 

Full Battery EVs

As the name suggests, a BEV only has a large battery that is charged by an external power source and does not require engine oils. It still has transmission fluid, more like today’s gear oil, and only uses small quantities of lubricant for typical moving car parts. A wild card is the battery and e-motor coolant, which may create new opportunities for lubricant suppliers.

BEVs are simpler to manufacture, since they comprise far fewer components, and will eventually be less costly than cars such as Tesla Model 3 or even the more modest Chevrolet Bolt. Indeed, Chinese manufacturers already produce a wide range of EVs catering to all price brackets.

Fuel-cell Vehicles

Finally, there are fuel-cell vehicles that use an onboard hydrogen tank and atmospheric oxygen to generate electricity to power an e-motor, like a BEV. However, they are yet to see significant traction in the marketplace. According to the IEA, the global fuel-cell fleet reached 11,200 units at the end of 2018. This number is, as yet, too small to pose much of a threat to lube marketers.

China’s government seems to be aggressively pursuing fuel-cell technology by offering manufacturers generous subsidies, as it did with the EV and battery sectors, according to reports in the U.K. press.¹ 

In the West, the eye-popping sticker price for a car, virtually no manufacturing capacity and next to no refueling infrastructure have consigned these cars to the back-burner for now. But watch this space.

Monthly registrations of new battery electric vehicles contracted for the first time in almost four years at the close of 2023, but the year-end total is far greater than the previous year, according to data compiled sby the European Automobile Manufacturer’s Association.

In December, ACEA said that new BEV sales fell by 16.9% to about 160,700 units. The explanation is strong sales in the same month of 2022, a 47% downturn in leading EU market Germany. New registration for the whole year passed 1.5 million units, representing a 37% increase over 2022. The BEVs snagged a 14.6% market share across the bloc.

Dealers are speculating that the slowdown is due uncertainty about the pace of technological development. This leaves drivers waiting until the next generation of cars comes onto the market. They also found that customers are put off by the still-high price tags, especially in the UK, according to Autotrader.

The market could heat up again as an EV price war erupted in Europe in January. Tesla dropping its prices and an influx of cheaper Chinese models should bolster demand again.

Through COVID, conflicts and chip shortages, global EV sales trends have followed an upward path. Battery EVs and plug-in hybrids and gaining more and more market share in new vehicle registrations. Even as the market heads toward becoming mature in key territories China, Europe and the United States, here’s plenty of room left for conventional engine vehicles as well as hybrids and all other new energy vehicles.

2023

Even as the global light vehicle market slows, EV sales (BEVs and plugin hybrids) are likely to exceed 14 million units in 2023, accounting for growth of 34% over 2022, according to online EV data provider EV Volumes. Expectations are that EVs could reach global market share of 16% when the 2023 numbers are crunched.

Registrations of EVs have cooled off in line with ICEs, and market watchers are adjusting predictions downward world wide. A combination of subsidies and incentives drawing to a close in Europe and economic instability in the United States and China are taking the heat out of what has been a hot market for the past two years.

China as usual leads the pack when it comes not only to sales but now Chinese EV maker BYD sold more units than Tesla to become the number one EV maker in the world, according to Reuters. The country’s drivers bought more than 8 million EVs in 2023, upwards of 3 million were produced by BYD. Europe nudged toward sales of 3 million units, of which 2 million were BEVs, while the U.S. bought 2 million, split 50-50 between battery and hybrid.

2022

Another bumper year, especially for Tesla. 2022 closed on global deliveries of 10.5 million EVs (BEVs and PHEVs), an increase of 55% compared with 2021. EVs took 13% of global light vehicle sales in 2022, compared with 8.3% the year before.

The overall vehicle market and component shortages kept sales down compared with stellar growth in the previous two years. Even so, one in four cars sold in China was an EV in 2022. Sales of 6.9 million units bucked against a crashing real estate sector – one of the country’s major economic drivers – and more COVID 19 outbreaks. This translates into sales up by 82%. BYD and Tesla take the lion’s share.

Europe accounted for 1.13 million units, up 15% on 2021. Norway has long been the market share leader with BEVs 71% and PHEV 8%. North America saw growth of 48%, year on year, reaching 918,500 units.

The fastest-growing EV markets were in the East, with Indonesia from 1,000 to 10,000 units almost overnight, India up 223 % to 50,000 units and New Zealand up 151% to 23,000 units.

2021

While the world was confined to quarters, somebody was buying an electric vehicle. But after a year of economic chaos and lockdowns, global EV sales trends carried on regardless. Registrations reached 6.75 million units by the end of the year, an immense 108% increase on the year before, according to EV Volumes. But the figures are less impressive when we factor in an ongoing slump in conventional vehicle sales.

China’s population would rather have bought an EV over taking the bus to work, which saw sales rocket by more than 2 million units. Growth in Europe stayed lower

Consistent, high growth also among the remaining countries: South Korea increased by 64 200 units to 114 500 EV sales. Israel, Australia, India, Japan contributed with additional sales of more than 10 000 units each. Many smaller EV markets e.g. Brazil, New Zealand, Saudi Arabia, Singapore increased EV sales by over 200 %. Most OEMs have noticeably enhanced their EV offers beyond Europe, China and North America.

New registrations of EVs in Europe reached 878,092, while conventional vehicle sales faltered. In the U.S., sales nearly doubled to 608,000 units.

2020

Despite the ruinous start to 2020 for sales of EVs of all kinds, there are now more than 7.5 million plug-in four-wheelers in the world. Most are still in China and the car that has outsold all others, even in the depths of the pandemic freeze, was the Tesla Model 3, which sold more than the next five models combined. Global plug-in sales passed 2.97 million units, capturing a market share of 2.7% of registrations.

China reached EV market share of 4.3%, up from 4% the year before, selling 1.27 million units. Europe as a whole crept up to 3.8% market share and Europeans registered almost 536,200 units. The U.S. saw the highest market share of plug-in sales during that period of 5.5%, with registrations amounting to 308,000 units.

As pressure increases from governments and international organisations on original equipment manufacturers to meet strict emissions regulations, most of the major world’s major carmakers are developing battery electric vehicles. There are also a slew of start-ups and pure BEV players, such as the mighty Tesla.

The following list of EV OEMs is non-exhaustive, but highlights the evolving and growing roster of vehicles on offer by region. If you would like to add or suggest amendments to this list, please contact info@lubesnnreases.com. A handy guide to the sustainability of EVs can be found here, too.

Europe

Aston Martin

After the stalled Rapid E failed to get past prototype, Aston Martin now plans to launch its first plug-in hybrid, ominously called the Valhalla, followed by an as-yet electric model by 2025. Aston also says all of its models will be available with an electrified powertrain by 2026. Despite a cash injection to the tune of £182 million from a Canadian investor, the British luxury carmaker put the brakes on the limited edition, all-electric Rapide E.

BMW (Alpina, BMW, Mini, Rolls Royce)

High-end German carmaker BMW is bullish about BEVs. Having made its ambitious target to sell 1 million electrified passenger cars by the end of 2021, it now has plans to build six models in the U.S. and start producing its Neue Klasse (“new class”) generation of EVs in Shenyang, China, in 2026. 

Group BEV sales increased by nearly 80% year-on-year, accounting for about 15% of the total sales, up from 9% in 2022.

BMW opted for flexible vehicle architectures, allowing it to fit various models with different drivetrains, including fully electric.

The Mini marque celebrated its 60th anniversary with the global launch of the Mini Electric, which entered into production in November 2019. The company announced in October 2022 it would shift production from the U.K. to China.

Rolls-Royce will launch its first battery EV, CEO Torsten Müller-Ötvös said. While the platform underpinning the Phantom and the Cullinan SUV is designed to accommodate an all-electric power train, a future Rolls-Royce BEV is likely to be a standalone model.

Daimler Benz

Daimler’s Mercedes-Benz rolled out its EQ range with the EQC SUV, which went on sale early 2019. The EQC will likely be followed by other models in the range of various specifications and price points. The company plans to launch the higher-end EQS and the EQV, an electric minivan based on the existing V Class, both around 2020. The next BEV will likely be the EQB in 2021, which is based on the conventional GLB SUV model. An all-electric G Class was confirmed in November 2019.

By 2022, Mercedes-Benz will offer 10 BEVs. The EQ-initiative is backed by an investment worth €10 billion, with another €1 billion earmarked for investment in battery production. It has secured contracts for battery cells through 2030 for a total value of €20 billion.

Earlier in 2019, Daimler’s Smart switched over to an all-electric lineup. The revamp of the Smart ForTwo and Smart ForFour models, first unveiled at Frankfurt, marked the full changeover to electric.

Groupe Renault

Renault was heading toward BEV sales of 65,000 units in 2023. More than half of these were the Megane E-Tech. The company already upgraded its bestselling Zoe in September 2019, overhauling its all-electric drivetrain and interior and tweaking the exterior. The Scenic E-Tech is due in 2024. Renault also introduced the China-only K-ZE in 2019.

The Renault Twingo, developed alongside the Smart ForTwo in partnership with Daimler, is likely to be fitted with a Daimler drivetrain in 2020. It will be one of eight BEVs planned through 2022, which will also include a model that will slot in above the Zoe in the marque’s lineup. Renault may also develop a new platform for BEVs with alliance partners Nissan and Mitsubishi

PSA Group (Peugeot, Citroën, DS, Opel, Vauxhall)

In 2019, PSA Group launched four new BEVs across three brands. The DS3 Cross Back E-Tense, Opel Corsa-E and the two Peugeot e-models all share the group’s modular e-CMP platform, co-developed with Chinese JV partner Dongfeng. All four cars will go on sale in 2020.

The group may phase out the Citroën C-Zero and Peugeot iOn, based on the aged Mitsubishi iMiEV. In late October, PSA and FCA announced a merger, creating one of the world’s largest automotive groups.

The e-Boxer van is also on its way, with sales anticipated to begin in early next year.

In 2023, Ford Europe will launch its first BEV using Volkswagen’s modular electric toolkit (known as MEB) architecture as part of July 2019 deal that saw the two manufacturers deepen cooperation. Ford aims to sell 600,000 MEB-based BEVs over a six-year period. Talks are underway for a second MEB model.

Togg

The first Turkish EV Togg rolled off the production at the end of October 2022. The company said it will make 17,000-18,000 SUVs in 2023 and gradually increase production to hit a target of 1 million units by 2030.

Volkswagen Group (Audi, Bentley, Bugatti, Cupra, Lamborghini, Seat, Skoda, Porsche, Volkswagen

Volkswagen Group upped the ante in 2019 when it announced it will launch close to 70 new electric models, instead of a previously announced 50, over the next decade. The German car giant is targeting production of up to 22 million such vehicles in the coming 10 years. More than €30 billion is earmarked for electrification alone, and EVs will have a 40%share of the group’s fleet by 2030. Battery procurement agreements are in place with Chinese venture CATL, as well as Korean companies LG Chem, SK Innovation and Samsung.

VW kicked off its move toward EVs with the ID.3 in September 2019. Production began in November, with first deliveries expected in the middle of 2020. Three versions are planned, with the 420-km, mid-range model to launch first. VW wants the ID.3 to become as iconic as the Beetle or the Golf before it.

The ID.4 SUV will be the second model of the family of five ID vehicles. Production began in mid-2020 in the Zwickau plant.

At the 2019 Los Angeles Auto Show, VW showcased the ID Space Vizzion station wagon concept, which should hit markets at the end of 2021.

The ID models use VW’s so-called modular electrification toolkit platform, to which Ford gained access as part of a comprehensive agreement between the two manufacturers in 2019. The platform will also be used by VW subsidiaries Skoda and Seat. The latter will launch a rebadged version of the ID.3, tentatively called El Born, while Skoda will use the MEB for a coupe-style SUV based on its Kodiaq. Both are slated for launch in 2020.

The three brands – Seat, Skoda and Volkswagen – also launched an upgraded version of the group’s all-electric supermini in 2019 (Seat Mii Electric, Skoda Citigo e iV and the VW e-Up.) Seat will launch six electric models by 2021, while Skoda is targeting five by 2025.

Audi began deliveries of its E-tron in 2019 and unveiled the E-tron Sportback in Los Angeles in November. In China, the German luxury brand sells the Q2 E-tron. By 2025, Audi aims to have 20 BEVs in its model lineup. The marque’s upcoming launch is the E-tron GT, which shares its underpinnings with the Porsche Taycan.

Porche unveiled the Taycan at the Frankfurt International Motor Show. It is available with three different power outputs, and will be joined by a Cross Turismo version in 2021. Porsche in 2019 also announced that the 2021 replacement for the Macan SUV would be all-electric. Porsche has a 15.5% share in Croatian manufacturer Rimac Automobili, which produces electric supercars.

Bugatti presented an all-electric, three-quarter-scale version of the legendary Type 35 in 2019. Labelled the Baby II, all 500 planned units were sold within three weeks. While no Bugatti BEV is planned for the foreseeable future, CEO Stephan Winkelmann said in March 2019 that he could foresee the brand “doing a battery EV.”

Luxury marque Bentley is working towards building a BEV and believes there would be demand for one from its customers, Chief Executive Adrian Hallmark said in July 2019. However, Hallmark thinks battery technology that meets Bentley’s requirements will not be available until after 2025.

Supercar manufacturer Lamborghini believes current battery technology cannot deliver the level of performance that its clientele expects from the marque, and so is working with the Massachusetts Institute of Technology to develop one. Lamborghini expected tests to conclude in 2019, after which the firm began development of the Lanzador, expected to hit the roads in 2028.

North America

AC

The AC Cobra is the stuff of motoring legend. The souped-up British-American roadster has been resurrected again as the very limited edition Scorpion battery EV. A range of 150 miles comes from a 54 kWh battery and the 230 Watt motor delivers zero to 60 miles per hour in 6.7 seconds using a Tesla Model S power train. The Tesla Model 3 punts up to 60 from a standing start in 3.2 seconds and goes 250 miles on a charge. An AC Cobra EV can be yours for an eye-popping U.S.$185,000.

Bollinger

Founded in 2015 by owner Robert Bollinger, the United States-based Bollinger Motors pivoted to commercial trucks, and now produces the B4. It had attempted to build two Land Rover-inspired BEVs – the Bollinger 1 SUV and Bollinger 2. The vehicles were expected to enter into production in 2020 with first deliveries in early 2021.

In September 2022, Mullen Automotive Inc. bought a controlling stake in the company and is planning to revive the cancelled production of the consumer trucks after reservations reached 50,000. The company now intends to launch a medium-duty truck in 2024.

Fisker

U.S. EV maker Fisker has had a few bumps in the road getting its Ocean SUV off the ground. The California-based company has initially approached Volkswagen for a license to use the MEB platform, but negotiations are so far yet to conclude. The company signed a production contract with Austrian firm Magna Steyr, with work starting in 2022.

The car is aimed squarely at the So-Cal market, with components made from recycled plastics and a vegan interior.

Ford

Ford Motor Co. earmarked $11 billion for investment in electrified vehicles, more than double its previously announced investment figure. By 2022, the U.S. giant aimed to have 16 BEVs in its global lineup, it said. The Mustang Mach-E, its first BEV, was launched in early 2020, followed by the F-150 e-truck in 2022. By the end of 2022, the production lineup was three.