The other major disruptor facing lubricants marketers are sustainability and decarbonization, which refer also to e-mobility. The successful technical breakthrough of electric vehicle technology depends on three factors: competitive car prices, increased driving range and accessible recharging infrastructure. Electric vehicles have different lubrication needs, so factory fill engine and gear oil demand will shrink significantly, as will metalworking fluid demand, while aftermarket demand for automotive lubricants will shrink slightly each year as internal combustion engine vehicle stock is replaced. First-fill grease demand needs to be evaluated, too, as some applications will grow in volume and new applications could come up. Also, the trend toward lighter weight, as steel is replaced with more aluminum and thermoplastics, could lower the demand for forming lubricants and corrosion preventives. On the other hand, the batteries for electric vehicles will require new formulations of battery-cooling fluids. Overall, the impact of e-mobility on global lubricants demand over the next 10 years will be slightly negative on balance. Demand in Europe could decrease by up to 10 percent, and in the U.S., it could fall by up to 20 percent, while lube demand in China could increase by 15 to 20 percent as a result of increased car sales.
The evolution of e-mobility and the replacement of the combustion engine by a battery will create opportunities for lube manufacturers. The whole focus of carmakers, customers to the lube industry, will shift from their use phase to their supply chain regarding carbon dioxide (CO2) distribution. This means that the low-CO2 footprint of a sustainable lubricant will help car manufacturers lower their overall carbon footprint. In this way, sustainability becomes a potential differentiation criterion and competitive advantage for lubricant manufacturers when reaching out to customers.
The European Union will require lubricant companies, like other industries, to begin adopting sustainable business practices to cope with such aforementioned disruptions as e-mobility and digitalization. Rather than waiting for authorities to dictate them, it would be much better if the lube industry proactively came up with standards, benchmarks and key performance indicators of its own now, while there is still some breathing room to do so. German lube associations VSI and UNITI, together with independent lubricant manufacturing companies, have established an initiative named NaSch, which is short for Nachhaltigkeitsinitiative Schmierstoffindustrie, or sustainability initiative lubricants industry. Its objective is to establish sustainability standards, identify key performance indicators and benchmarks for the lubricants industry, and emphasize the industry’s value to society.
We need to pay attention to the disruptions of today and tomorrow, but they cannot kill demand for lubricants. We need to continue to adapt to new realities for the future of our industry.