ILMA Compoundings December 2017 - 14

INDUSTRY RUNDOWN

Market Report
What is the Effect of Vehicle Electrification
on Lubricant Manufacturers?
By Joe Zirnhelt
Electrification of vehicles is growing rapidly around
the world, and this trend is forcing changes on users of
commercial vehicles. What does this change mean for
lubricant manufacturers?

Medium & Heavy Commercial Vehicle Market Share Evolution 2017-30
IC Only

100%

Hybrid

Electric

90%
80%
70%
60%

Projected 2030 share:
Hybrids & Electrics ~32%

50%
40%
30%

Hybrid

90%

Case 2: Hybrid &
Electric with 32%
share in 2030

80%

Electric
58,158 Units
11%
108,858 Units
21%

70%
60%
50%

524,827 Units
100%

40%

357,811 Units
68%

30%
20%
10%
0%

Case 1: Assume all Medium & Heavy
Commercial Vehicles are IC Only in 2030

Case 2: Assume Hybrid & Electric
with 32% Market Share in 2030

original equipment manufacturer (OEM) production and
forecast data for IC engine and alternative-drive vehicles.
Using these databases and other industry resources, we've
forecast a picture of the electrified vehicle segment as it
might look by the year 2030 in North America.
The market impact of electric and hybrids is inevitable,
but how big will that impact be, and how fast will it arrive?
Consider these facts:
* Current battery costs are at a level of $250 per kilowatt
hour, with costs expected to decrease to $150 per kWh
by 2025 or sooner. The rate of the battery cost decrease
will drive more adoption of electric and hybrids.
* A key consideration for CVs is the weight of the batteries, since the total weight of the freight is reduced by
the weight of the batteries. This is a cost to truck fleets
and factors into companies' decisions to adopt electric
technology. The current weight of batteries has come
down from 1,000 kilograms in 2010 to 667 kg today
and is expected to reach 400 kg for a 100 kWh battery
pack by 2025.
* Estimated share of new medium and heavy commercial
vehicle sales is projected to be 32 percent by the year 2030:

20%
10%
0%
2017

IC Only
100%

Market Share

Much has been written about the electrification of passenger cars, but less has been said about electrification of commercial vehicles (CVs). Perhaps not surprisingly, many of the
same trends apply to the CV segment as they do to passenger
cars, only the scope and range are different, according to
research developed by Power Systems Research (PSR).
One notable difference between the passenger car and
commercial vehicle buyer is that initial sticker shock. With
gasoline prices remaining low, the higher price tag for electric and hybrid vehicles can deter the consumers evaluating
a passenger car purchase. The commercial vehicle buyer,
however, might see a higher first cost for the hybrid or electric vehicle, but those higher first costs are offset somewhat
in terms of savings in maintenance and repairs over the
vehicle's lifetime.
PSR has been tracking and forecasting global engine production and use since 1976 and maintains three important
databases that address these questions: CV Link™, which is a
leading source of global commercial vehicle production and
volume data; EnginLink™, which is the definitive source of
global internal combustion (IC) engine production, forecast
and specification data, and OE Link™, which tracks global

Comparison of Unit Share by Drive Type Mix in 2030

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: CV Link™ 2017, PSR Analysis

14

DECEMBER 2017

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* High adoption rates in densely populated, strictly
regulated cities
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ILMA Compoundings December 2017

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