FLORENCE, Italy – Electric vehicles will make a more noticeable impact on passenger car motor oil demand from 2027 onwards when sales come to depend on market forces – including shared mobility applications – and less on government incentives, an industry observer told ACIs European Base Oils & Lubricants Interactive Summit here.
Kline & Co. Project Manager Sharbel Luzuriaga said the consulting firms conclusions were based on a 15-country study that predicted EVs will remain a niche market with limited influence on passenger car motor oil demand in the near term.
The transition from government-driven to a market-driven EV transition conceals high uncertainty. Oil drain intervals will remain the main factor for motor oil demand drive near-term. While effects of the ride-sharing economy on motor oil demand is very limited, battery electric vehicles are not yet used in shared mobility applications, Luzuriaga told the summit, held Nov. 28-29.
From 2027 onwards, barriers to EV penetration will be gradually surpassed, with consumers opting to purchase EVs even when government incentives are removed. Kline also expects ride sharing to make a bigger impact on motor oil consumption in the 2030s. The company analyzed data for 15 countries – Germany, the United Kingdom, France, Australia, Russia, Saudi Arabia, South Africa, the United States, Canada, Mexico, Brazil, Japan, China, South Korea and India – and forecast what would be the maximum penetration of the EVs and what implications it will have on passenger car motor oil demand.
The presentation on the effect of evolving mobility patterns on the long-term PCMO outlook was based on Klines study, The PCMO Market in 2040: A Long-term Outlook. The study provides a most likely scenario based on the events and developments that have potential to trigger fundamental changes in EV adoption pattern and what would the impact on motor oil demand would be at different stages.
The study estimated passenger car motor oil demand based on assumptions of high, low and medium levels of EV penetration through 2040.
The EV population growth in these countries will depend on regulatory and other drivers while battery technology is one of the largest barriers, Luzuriaga said.
Kline found it most likely that the EV population in these countries will grow from 16 million units in 2017 – out of 800 million total passenger cars – to 460 million units in 2040.
It is a significant growth to almost a third of the total passenger car population [in those countries], expected to be at 1.5 billion units in 2040, Luzuriaga said. Kline also found that the EV transition will be a gradual process that would have a varied impact on the motor oil demand at different stages.
In this case the most likely scenario in the selected countries shows a stagnation of motor oil demand at the level of 5.2 million tons, or a compound annual growth rate of negative 0.1 percent through 2040, Luzuriaga observed, adding that EV penetration will cause a cumulative motor oil demand loss in the studied countries of about 1.2 million tons through 2040.
In 2017, motor oil demand in the selected 15 countries totaled 5.3 million tons, according to Kline.
Kline said it would have expected passenger car motor oil demand in those countries to grow at a compound annual rate of 0.9 percent over the forecast period, reaching 6.5 million tons in 2040, if EVs remained constant at 2017 levels through 2040.
In other words, a 1.0 percent [CAGR] decline rate for the motor oil demand is directly linked to the increase in EV penetration in the total passenger car vehicle population, Luzuriaga observed.