But how exactly will they do so? What disruptions will they present to the current champion, the internal combustion engine? How will growing electrification affect the lubricants industry, and how can the industry find opportunities in the apparent struggle?

The Global Car Parc

According to an October 24 webinar hosted by global consultancy and market intelligence firm Kline & Co., the passenger car parc in the major country markets (Canada, Mexico, United States, Germany, United Kingdom, France, Australia, India, Indonesia, Japan, South Korea, China, Brazil and South Africa) was made up of about 890 million vehicles in 2022. Of those 890 million cars, only about 40 million of them were electric—about 4% of the total.

However, the share of electric vehicles is forecast to increase significantly over the next couple of decades. So what can we expect the demographics of the global car parc to look like in the next ten years? What about the next 30 years?

“Essentially, we can expect that internal combustion engines will be the dominant technology in 2032. They will be about three-quarters of the overall passenger vehicle parc,” said Sharbel Luzuriaga, industry manager, energy, for Kline. “For 2050, [internal combustion engines} are not going to disappear; it’s still 34%-35% ICEs.”

Luzuriaga also predicted that the size of the overall car parc will increase significantly between the present and 2032—from 890 million to about 995 million. However, the number of vehicles on the road is expected to dip back down to approximately 950 million by 2050. 

This change in the size of the car parc “can be attributed to different factors,” Luzuriaga said. One of those factors is “the accelerated transition to different ways of car ownership—the other models, like ride sharing and autonomous vehicles, which are taking a fast exponential growth in countries like China.”

By 2050, Kline expects that of the different types of electric vehicle powertrains—battery electric vehicles, hybrid electric vehicles and plug-in hybrid electric vehicles—BEVs are likely to account for about 80% in the core 14 countries, followed by HEVs and PHEVs, respectively.  

“EV growth is going to be exponential—about 10% over the next two decades,” Luzuriaga said. “Obviously, BEVs will have outperforming growth—about 14%.”

EV Penetration

Of course, EV uptake won’t follow the same pattern in every country, as each country is subject to varying legislation, economic situations and infrastructure. Where will EVs thrive in the coming years, and where might adoption be a bit slower?

“This is a highly consolidated market in terms of geographical distribution,” Luzuriaga said. “The top three countries will account for more than 60% of the market in 2050 in the case of battery electric vehicles. The biggest demand is expected—the biggest populations—in the U.S., China and India.”

For hybrid adoption, the leading countries are forecast to be China, Japan and India, while China, the U.S. and Germany will lead the pack for plug-in hybrid vehicles.

Kline predicts that the countries with the highest levels of EV penetration (80% or more) by 2050 will be Japan, China, South Korea and the United Kingdom. These countries are likely to lead the pack in EV uptake because they have strong EV sales targets, generous financial incentives and a willingness to adopt non-BEV ICE alternatives, like hybrids. 

Countries that Kline believes will experience more moderate EV penetration (50%-80%) are France, Germany, India, Australia, the U.S. and Canada.

Brazil, South Africa, Mexico and Indonesia will experience the lowest levels of EV uptake (50% or less) by 2050. It is important to note, though, that in these countries—with the exception of Mexico—the high percentage of hybrid adoption can be attributed to the affordability of hybrid technology compared to BEVs. Furthermore, Brazil has a rather strong bioethanol industry, which favors vehicles that can run on flexifuels. 

Other reasons for EV adoption—or the lack thereof—depend on “a mix of different factors—geopolitical, reliability of energy security, technology and so on,” Luzuriaga said. 

“For the next decade—at least in the fast-growing economies, like India, Indonesia and Mexico—the transition to electric vehicles will be moderate to low,” Luzuriaga said. Reasons for this prediction include mild governmental policies along with low sustainability awareness and various socioeconomic factors, among others. 

“However, in the long run up to 2050, we can see that ultimately the transition to electric vehicles will gain more traction as different governments have pledges and commitments to reach carbon neutral,” Luzuriaga said. 

Electrification’s Effect on the PCMO Market

Lubricants industry players have known that EV penetration is inevitable for years now, and they have been bracing themselves for the equally inevitable hit that increased electrification will take on passenger car motor oil demand. 

“Certainly, the impact of electrification on PCMO looks gloomy,” Luzuriaga said. “However, there are other types of fluids that can possibly be affected—not only in terms of volumetric growth but also in terms of value and in terms of how they will be customized to better address the unique operational challenges that can be encountered in electric vehicles. For instance, nowadays, most of the fluids used in electric vehicles are mainstream lubricants off the shelf. But certainly and undoubtedly, sooner or later, these will not be meeting the requirements” of modern EVs. 

This shift to bespoke lubrication products presents an opportunity for coolants, which Kline has forecast to post the most growth in the U.S., Europe, Japan and China between the present and 2050. Of course, there will also be growth, albeit more moderate—of greases and transmission fluids, respectively. 

While there will be a marked decrease in PCMO consumption in the coming years, there are still some remaining opportunities for motor oil blenders, Luzuriaga said, as there will still be a need for low-viscosity engine oils that enable increased fuel economy and lower emissions in both ICE vehicles as well as hybrid powertrains.

Factory and Service Fill

What will the factory- and service-fill landscape look like as electrification accelerates?

“In the early stages of EV deployment, we can expect that electric vehicles will be a factory-fill market,” Luzuriaga said. “This is mainly applicable for battery electric vehicles when compared to the hybrid technologies. When it comes to product types, transmission fluids, coolants and greases would be mostly showing reduced opportunities in the aftermarket.” 

As for other service-fill opportunities for EVs, Luzuriaga said that there is still “a big question mark” until the EVs currently on the road age further. “This is still an evolving area of investigation,” he said. 

Thermal Management

Battery cooling technology, or thermal management systems, are a major area of focus right now for both vehicle manufacturers as well as lubricant blenders. 

“The way that electric vehicles will be deployed will be contingent on the innovation that will be occurring on the battery technology front,” Luzuriaga said. “Certainly, thermal management has been widely recognized as one of those methods that could directly improve and optimize the efficiency of the batteries.”

Improvements in thermal management will also be key for optimization of several other components of an EV, including power electronics, the e-motor and even fast charging devices. 

Outside of equipment efficiency, thermal management will have other equally important consequences that will affect EV uptake, chief among them being safety. 

“Certainly, the predominant technology is indirect liquid cooling based on water glycol mixes, but also there are emerging alternatives to that—basically immersive cooling, which is holding big promise in terms of efficiency that can deliver safety in terms of preventing thermal runaway and fire events,” Luzuriaga said. “So safety is an important consideration.”

Luzuriaga also touted sustainability as an increasingly relevant consideration related to thermal management endeavors. Will cooling fluids have eco-friendly credentials, and will they be recyclable to any extent? For the most part, the answer to those questions remains to be seen.   

Sydney Moore is managing editor of Lubes’n’Greases magazine. Contact her at Sydney@LubesnGreases.com