Lindemann is based in the companys headquarters in Mannheim, Germany.

Fuchs found e-mobility – use of electric vehicles and plug-in hybrids – and digitalization could decrease lubricant demand in Europe by 8 to 10 percent and in the United States by 20 percent over the next decade. Fuchs projects that lube demand in China could actually increase 15 to 20 percent as a result of the increased car sales.

Global lubricant demand, which was 35.7 million metric tons in 2016, could decrease by 450,000 tons to 800,000 tons by 2027, according to Lindemann.

In Europe, sales of electric vehicles reached 206,000 units in 2016 to account for 1.4 percent of the market and representing a 10 percent increase in numbers of units from 2015. In China, electric vehicle sales rose 53 percent last year to 507,000 units and now account for 1.8 percent of that market. In the U.S., electric vehicle sales jumped 38 percent to 157,000 but still represent only a 0.9 percent market share. Fuchs attributed the data to Clean Technica, the European Automobile Manufacturers Association and Inside EV.

Lindemann said that the technical breakthrough of electric vehicle technology depends on several factors. To [succeed], the e-car industry needs to fulfill three main tasks – competitive car prices, increased driving range and accessible recharge infrastructure. We estimate that if battery capacity can be increased by 250 percent, driving range will be at 500 kilometers for compact e-cars and at the same time cost can be reduced to 100 per kilowatt hour. And this could be achievable by 2020, he observed, citing Daimler AG data.

Lindemann added electric and hybrid vehicle battery system costs are falling and could become equivalent to conventional power train costs by 2025, citing Daimler data.

By 2028, Fuchs predicted, electric cars would have a 30 percent market penetration in the European Union, while cars with combustion engines will hold a 28 percent market share and hybrids will account for 40 percent.

Similarly, the U.S., Canada and China could see electric cars outnumber internal combustion cars by 2027, according to the German lube maker.

Electric vehicles have different lubrication needs, so factory fill engine and gear oil demand will shrink significantly, and the same will be the case with metalworking fluids, while aftermarket demand for automotive lubricants will shrink slightly year on year as internal combustion car stock will be replaced, according to Fuchs. First fill grease demand needs to be evaluated too, as some applications will grow in volume and new applications could come up. Also, the trends toward light weight, as steel is being replaced with more aluminum and thermoplastics, could lower the demand for forming lubricants and corrosion preventives.

Fuchs officials believe the European Union will require lubricant companies, like other industries, to begin adopting sustainable business practices, and the company has urged the lube industry to develop its own standards for sustainability rather than waiting for authorities to dictate them.

It would be much better now if we as the lube industryproactivelycome up with standards, benchmarks and key performance indicators of our own, while we still have some breathing room to do so, Apu Gosalia, Fuchs vice president for sustainability and global competitive intelligence, said in an interview.

The German Lubricants Manufacturing Association has already established a working group named NaSch, which is short for nachhaltigkeit schmierstoffindustrie, or sustainability lubricants industry. Its objective is to establish sustainability standards, to identify key performance indicators and benchmarks for the lubricants industry and emphasize the industrys value to society.

After electric vehicles and new materials, Fuchs considers digitalization the third disruptive development that lubricant manufacturers need to handle. Digitalization is a term referring broadly to employing information technology to make business practices more effective. While this is often done by existing businesses, Fuchs officials warn that start-up companies could do this to nudge their way into the lubricants industry.

We know at least 15 start-ups that employ between five and 700 staff that … apply whatever statistics and simulation methods you can think about to substitute and to dig in into this relation between lubricant manufacturer and customer, Lindemann concluded, adding that this trend is really visible in China.

These start-ups serve manufacturers by offering to analyze all or parts of their operations. They may advise the manufacturers not only about their lubricant usage but on various aspects of their business – such as the raw materials or equipment they use in their manufacturing process, but the potential threat to lubricant marketers is that these start-ups may also determine the lubricant characteristics that are needed and then identify the best source for such performance, rendering the lube supplier little more than a toll manufacturer.

They offer directly to the customer sophisticated tools such as sensoric condition monitoring, explorative statistics, data mining and big data – all of which can be used for system modelling in chemical, tribological, logistic and manufacturing areas, Gosalia explained.