The rise of electric vehicles threatens the future of the automotive engine oil industry

engine oil industry
The Future of Engine Oil Industry: Adapting to the Rise of EV

The automotive engine oil industry is facing a potentially major disruption from the rise of electric vehicles (EVs). Currently, over 93% of the more than 1.4 billion vehicles on the road require engine oil. However, as EVs make up a larger share of new car sales (predicted to be 50% by 2035), the demand for engine oil could decline significantly. This is because EVs don’t require oil changes as frequently as gasoline-powered cars.

The shift to EVs could lead to a decline in demand for engine oil of up to 35% by 2035, according to a report by BNEF. This presents a challenge for the automotive engine oil industry, which may need to adapt its products and business model to survive in a world with fewer internal combustion engine (ICE) vehicles.

Expecting to have different lubrication needs than ICE vehicles

One option for the industry is to focus on developing oils for EVs, which are expected to have different lubrication needs than ICE vehicles. This could involve creating specialized oils that cater to the specific needs of EV engines and drivetrains.

Another option is to explore new markets for automotive engine oils, such as the growing market for hybrid and electric commercial vehicles. These vehicles still have internal combustion engines, but they also rely on electric power and may have different lubrication needs than traditional ICE vehicles.

The rise of EVs will also have an impact on aftermarket services such as oil changes, as well as petroleum companies that may see a decline in demand for gasoline. Service stations and other businesses that rely on oil changes for revenue may need to find new ways to monetize their products and services.

Petroleum companies, on the other hand, may need to pivot to producing more alternative fuels in order to meet the changing demand for transportation energy.

It’s important for companies in the automotive industry to be prepared for the shift to EVs in order to stay competitive as the industry undergoes a major transformation.

Those that don’t adapt could be left behind as EVs become more prevalent on the roads. The prediction of a 50% EV market share by 2035 is just one of many scenarios for the future of the automotive industry, but it underscores the need for companies to be prepared for a shift away from traditional gasoline-powered cars. Source