President Biden’s administration has proposed the toughest-ever rules on car pollution, in a move that is expected to have a significant impact on the automotive industry in the United States. On April 12, 2023, EPA announced new, more ambitious proposed standards to further reduce harmful air pollutant emissions from light-duty and medium-duty vehicles starting with model year 2027. This move is intended to rapidly accelerate the shift to electric vehicles (EVs).
For lubricant manufacturers, the new rules represent a major change. As cars become more fuel-efficient, they will require less lubricant and EVs don’t require motor oil for lubrication. This will exacerbate the decline in demand for traditional motor oils, while increasing the demand for high-performance specialty lubricants that can help cars run more efficiently and reduce emissions. Overall, the demand for lubricants from the automotive sector is expected to decline as EVs become more popular.
While this sounds like bad news for lubricant manufacturers, the decline in the demand for automotive lubricants is expected to be offset by the growth of the lubricants market for other sectors, such as the industrial and marine sectors. The industrial lubricants market is expected to grow at a CAGR of 4% from 2022 to 2028, and the marine lubricants market is expected to grow at a CAGR of 5% from 2022 to 2028.
The rise of EVs is a major challenge for the lubricants industry. However, the industry is responding to the challenge and many manufacturers are seizing the opportunity by developing new lubricants for EVs. These new lubricants are designed to meet the specific needs of EVs, such as low viscosity and high thermal stability. Currently many manufacturers are investing in research and development to adapt to this changing landscape. These technologies include the use of synthetic lubricants, the use of micro-fluidics, and the use of nanotechnology.