Automotive

The most recent marketing studies suggest that ICEs will continue to be the dominant engine/vehicle combination of choice, but there will be more inroads from electric vehicles until the mid- to late 2030s. In North America, the vehicles currently in operation (referred to as VIO) number somewhere over 300 million passenger cars and light trucks. The average age of this fleet is around 12 years. This means that there will be lots of opportunities for quick lubes to sell oil changes and other services. 

Although the fleet will continue to grow in size, ICEs will begin to be replaced by EVs. I think the speed at which this will occur depends on the cost differential between the two technologies. Currently, the average EV costs about $20,000 more than a comparable ICE, and that will continue to be the case for a while. However, legislation at the state and federal level will tilt the playing field toward EVs.

Shifting all vehicles to battery electric vehicles would demand more than 40% of the country’s electricity production, the American Transportation Research Institute noted in a report Published December 8 last year. In that report, the ATRI noted that electrifying long-haul truck runs alone on today’s roadways would require about a tenth of the nation’s power generation. What’s more, installing charging equipment at truck parking stops across the U.S. could cost upwards of $35 billion, which is based on a per-unit cost of $112,000. 

In another report, the cost of lithium batteries has risen due to inflation and scarcity to $151 per kilowatt hour. Most engineering reports indicate that $100-$110/kWh is required to be cost competitive with ICE vehicles. Right now, most EVs will require batteries delivering 95 kW/hr.  If you do some back of the envelope calculation, you can see that battery packs are pretty expensive. 

There will also be some applications that may never be converted to solely electric power. These applications will require oil changes, which will become highly specialized. Surprisingly, electromotive vehicles will continue to use ICEs to generate electricity to power electric motors, such as those found in large scale mining equipment, railroad locomotives and marine applications. Other applications include emergency generators to provide electricity in critical applications, such as hospitals and to charge first responders’ EVs. 

Of course, you may be asking, what will fuel these applications? That still remains to be seen, but there is a lot of work going on to use natural gas, hydrogen and biofuels as alternatives to gasoline and diesel fuels. 

Since ICEs in the U.S. will rule for the next 15 years at least, oils will continue to evolve to meet improved engine design demands. You may not be aware of the fact that the next generation of diesel and gasoline engine oils are underway now. API GF-7 is currently under development, with a targeted introduction date of 2027. Likewise, PC-12 heavy-duty engine oil standards are slated for about the same timeframe. 

The last time this happened was when GF-6 and what became API CK-4 both were developed for introduction around 2017. However, due to the complexity of GF-6, it didn’t make its introduction until 2020. There were a lot of hard lessons learned, and the hope is that the timing will be better this time around.

Almost without question, changes to these oil categories are driven by outside forces—the most notable of which is increased and more restrictive government regulations. Both new categories bring some visible and invisible changes. For GF-7 (gasoline-fueled engine oils), there is the continuing push for better fuel economy. 

In the past, the fuel economy test (all iterations of the Sequence VI) has been run using an engine that is run through a specific cycle—first with a reference oil, then with the test oil. The difference in fuel economy is measured and reported as a percent improvement. The Japanese have developed a test that measures the consumption of fuel in a fired engine. There is a discussion underway as to whether or not the Japanese test should replace the Sequence VI. 

The Sequence IX is being considered for revision to include a seasoned oil to test for its impact on low-speed pre-ignition. 

In addition, the Sequence VIII is being evaluated for continuing use. It is a single cylinder, research engine that measures copper and lead bearing corrosion as well as viscosity loss due to viscosity index polymer shearing. The test is very old, (World War II era) and there should be some other test—either an engine test or a laboratory procedure—that can analyze the oils. 

Heavy-duty engine oil is being upgraded as well. The proposed category currently known as PC-12 is getting new oxidation and deposit tests.

When I started in the business, the primary viscosity recommendation was SAE 30 or SAE 10W-40. My most recent vehicle is a 2020 Honda Pilot with a 3.5-liter V-6 engine. The oil viscosity recommendation year-round is SAE 0W-20. That is really significant when you know that I live in the Phoenix, Arizona, area. 

Fuel economy is the major driving force for that recommendation. Apparently, it works, because I’m averaging over 25 miles per gallon over about 25,000 miles. 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. This grade has been in use for several years in Europe and has been met with success.

Oil change intervals are holding steady at about 6,000-7,000 miles. I’m sure you’ve seen the extremes on this one. People tend to push the interval. I have spoken to operators who have literally mined gelled oil out of engines!  I am also aware of those cautious individuals who still accept the 3,000-mile or three-month rule of thumb and say that it is cheap insurance. But with the cost of oil and all the expenses tied to quick lubes, it isn’t very cheap anymore.

While the oil change intervals are about the same, the oxidation limits are changing to reflect more stable oils, which will positively affect fuel economy. Oil chemistry—including finished oil ash content and benign elemental chemistry (exhaust catalyst protection)—will be included. On the flip side, there may be restrictions on composition in order to make it easier to dispose of used oil. In addition, there may be growth in used oil rerefining to capture as much of the useable used engine oil as possible.

Base oil selection will drive all engine oil formulations toward increased use of synthetics to capture the improved viscometrics as well as other less visible properties. Highly refined Group III and III+ will become more common in passenger car motor oil.

As you can see, the future will be very challenging for engine oil production. Beyond the technical engineering, I think that we will see significant changes in marketing. Business 101 tells us that as the marketplace becomes more mature, cost will have a greater and greater influence on sales. Technology, while very appealing, will give way to good products at reasonable costs. The marketplace will be captured by large organizations that can be profitable and eliminate smaller organizations. I have noted recently that some of the larger players are acquiring smaller businesses. This concentrates the quick lube segment of the auto parts service marketplace.

The bottom line is that things look pretty good for the next several years. The number of VIOs in service will still grow, but ICEs will begin to be replaced by EVs. The smart vehicle owners will begin to look for products and services for EVs. Some enterprising organizations will develop heavy-duty versions to service those ICE applications that don’t lend themselves to EV operations. So if I were a betting man, I’d say that quick lubes and other oil service organizations will continue to be profitable and necessary for at least the next 20 years, so go out and capture what you can and be innovative in your business practices. Good luck!  

Steve Swedberg is an industry consultant with over 40 years experience in lubricants, most notably with Pennzoil and Chevron Oronite. He is a longtime member of the American Chemical Society, ASTM International and SAE International, where he was chairman of Technical Committee 1 on automotive engine oils. He can be reached at steveswedberg@cox.net.