It is becoming increasingly apparent that electric and plug-in hybrid cars are catching on and are destined to become a significant portion of the global automobile fleet. On its face, this seems like a threat to erode demand in one of the lubricant industrys biggest segments. But there is reason to think it wont be anytime soon and that the impact will be muted by other factors.
Various sources have warned recently that the lubes industry needs to awake to the threat posed by alternatively fueled vehicles, including cars, light trucks and light commercial vehicles that run on electricity or liquefied petroleum gas, along with hybrids that can also accommodate gasoline or diesel. Evonik Oil Additives Christoph Wincierz joined the list in November when, speaking at RPI Internationals Lubricants Russia conference in Moscow, he cited forecasts that these designs will account for 30 percent of new vehicles in less than two decades. The original source for the forecast, Japans Nomura Research Institute, said alternatively fueled vehicles will account for 19 percent of car and light truck production by 2020.
The potential worry is that these vehicles use less lubes than todays conventional, gasoline- and diesel-powered cars and light trucks. Wincierz did not give specific numbers but said that it is a lot less.
At first glance, that sounds like a scary proposition for oil marketers. In most industries, prospects of a big dent in such a large end-user market as passenger car motor oils would be cause for alarm. But as Wincierz noted, the outlook in this case isnt so dire when one takes a closer look.
The total number of car sales is projected to rise fast enough that the number of conventionally powered new cars will increase even as their portion of new sales falls. Nomuras forecast does show numbers of new gasoline and diesel-powered cars declining after 2030, and this would tend to reduce demand for passenger car motor oils. Two decades is a long time off, however – perhaps time enough for other developments that could soften the impact of hybrids.
For example, automakers have to date sought to improve fuel economy mainly by reducing friction and raising driveline efficiency. Wincierz said they will probably be forced to try other strategies, such as recovering energy lost to braking. Companies have already conceived of a way to do this by replacing transmissions with hydraulic motor/hydraulic pump systems that pressurize an accumulator when braking and then use the stored energy during acceleration.
These systems will require sophisticated hydraulic fluids with high viscosity, high viscosity index and high shear stability, Wincierz said. Creation of a product line like this could offset a contraction in demand for todays passenger car motor oils.