ILMA Compoundings December 2017 - 15

* Incentives might play a role in adoption rate

Comparison of First Fill Engine Oil Requirements in 2030

* Slow penetration in smaller towns and rural areas

IC Only

* Charging infrastructure and driving range limitations will be ongoing concerns
* Limited impact expected on Class 8 long-haul sales.
Will electrification kill the engine lubricant business? Certainly not. However, increased numbers of hybrid and electric
vehicles will mean a reduced demand for lubricants used by
CVs as we move into the future. Consider these factors:
* Units-in-operation (UIO) with IC engines won't disappear overnight, and there is still a large base of vehicles
that require lubricants.
* Major infrastructure work for charging stations and
facilitating electric vehicles will be necessary before many
current IC applications will be suitable or even comfortable with the idea of migrating towards electrics.
* Class 8 long-haul is likely to favor IC for the foreseeable future.
* "Last mile" services are the probable niche for hybrid
and electric CVs in the near term.
* Hybrids will have IC engines onboard and will need
lubricants.
CHANGING NEED FOR ENGINE LUBRICANTS
As electrification changes the North American transportation industry over the next 13 years, what sort of impact
will this have on engine lubricants? There are many variables
in terms of the mix between traditional IC powertrains,
hybrids and full electric. As an illustration of what this could
mean in terms of a tangible change, we evaluated how the
first fill requirements for engine oils may be affected for
medium and heavy CVs in 2030, including buses and Class
4 to Class 8 trucks.
In order to consider the impact on first fill engine oil
requirements, we have divided the view of the 2030 market
into two cases. Case 1 is to assume the null case, where all
vehicles will have a traditional IC engine in 2030 and therefore require a factory first fill of engine oil. The second case,
Case 2, is to assume that 32 percent of medium and heavy
vehicles produced in North America will have either hybrid
or electric powertrains in 2030. Furthermore, for Case 2, we
have assumed a stronger penetration of electrics into buses
and both hybrid and electrics into the shorter-route types

4,000,000

Net Difference: Case 1 to Case 2

Case 2: First Fill
Requirement is
433,339 gallons
less (11%) than
Case 1.

3,500,000

Gallons

* Large percentage of hybrids with IC engines is likely.

Hybrid

4,500,000

3,000,000

433,339
793,396

2,500,000
2,000,000

4,204,793
2,978,058

1,500,000
1,000,000
500,000
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

of applications, and less overall for the Class 8 long-haul
vehicle types.
Looking at the numbers in both cases, we forecast a total
market for medium and heavy CVs of over 524,000 vehicles
in 2030. In keeping with our example, we assume in Case 1
that 100 percent of the vehicles will have an IC-only powertrain and will account for a total first fill requirement of over
4.2 million gallons of engine oil.
In contrast, for Case 2 we assume that the total share of
vehicles will be split, with 357,811 vehicles as IC-only (68
percent), 108,858 vehicles as hybrid (21 percent) and 58,158
vehicles as electric (11 percent). In Case 2, we see a total first
fill demand of 3.77 million gallons of engine oil needed,
which is over 433,000 gallons (11 percent) less than Case 1.
The example does not account for hybrid and electric
vehicles that are already on the road or that will be sold until
2030. Aftermarket engine oil requirements are another topic
altogether that requires careful consideration.
As the technology for electrics and hybrids continues
to develop over the next several years, there will be many
factors that will influence and shape the market demand for
migration away from traditional IC powertrains. As these
factors take shape and adoption continues to move forward,
this will have some impact on the engine oil requirements.
Zirnhelt is chief operating officer at Power Systems
Research (PSR), a global market research and consulting
company based in St. Paul, Minnesota. PSR provides data
and forecasting information on engine production and
applications to help companies reduce risk in product development and
market expansion.

15



ILMA Compoundings December 2017

Table of Contents for the Digital Edition of ILMA Compoundings December 2017

LETTER FROM THE CEO
INSIDE ILMA
WHAT’S COMING UP
INDUSTRY RUNDOWN
MAKING CLAIMS
SOLVING THE ENGINE OIL PUZZLE, PART I
BUSINESS HUB
COUNSEL COMPOUND
WASHINGTON LANDSCAPE
IN NETWORK
PORTRAIT
ILMA Compoundings December 2017 - Cover1
ILMA Compoundings December 2017 - Cover2
ILMA Compoundings December 2017 - 1
ILMA Compoundings December 2017 - 2
ILMA Compoundings December 2017 - LETTER FROM THE CEO
ILMA Compoundings December 2017 - INSIDE ILMA
ILMA Compoundings December 2017 - 5
ILMA Compoundings December 2017 - WHAT’S COMING UP
ILMA Compoundings December 2017 - 7
ILMA Compoundings December 2017 - 8
ILMA Compoundings December 2017 - 9
ILMA Compoundings December 2017 - INDUSTRY RUNDOWN
ILMA Compoundings December 2017 - 11
ILMA Compoundings December 2017 - 12
ILMA Compoundings December 2017 - 13
ILMA Compoundings December 2017 - 14
ILMA Compoundings December 2017 - 15
ILMA Compoundings December 2017 - MAKING CLAIMS
ILMA Compoundings December 2017 - 17
ILMA Compoundings December 2017 - 18
ILMA Compoundings December 2017 - 19
ILMA Compoundings December 2017 - SOLVING THE ENGINE OIL PUZZLE, PART I
ILMA Compoundings December 2017 - 21
ILMA Compoundings December 2017 - 22
ILMA Compoundings December 2017 - 23
ILMA Compoundings December 2017 - BUSINESS HUB
ILMA Compoundings December 2017 - 25
ILMA Compoundings December 2017 - COUNSEL COMPOUND
ILMA Compoundings December 2017 - 27
ILMA Compoundings December 2017 - WASHINGTON LANDSCAPE
ILMA Compoundings December 2017 - 29
ILMA Compoundings December 2017 - PORTRAIT
ILMA Compoundings December 2017 - 31
ILMA Compoundings December 2017 - 32
ILMA Compoundings December 2017 - Cover3
ILMA Compoundings December 2017 - Cover4
https://www.nxtbook.com/ygsreprints/ILMA/G127535ILMA_vol71_no7
https://www.nxtbook.com/ygsreprints/ILMA/G126213ILMA_vol71_no6
https://www.nxtbook.com/ygsreprints/ILMA/G125546_ILMA_vol71_no5
https://www.nxtbook.com/ygsreprints/ILMA/G124996_ILMA_vol71_no4
https://www.nxtbook.com/ygsreprints/ILMA/G123886_ILMA_vol71_no3
https://www.nxtbook.com/ygsreprints/ILMA/G123315_ILMA_vol71_no2
https://www.nxtbook.com/ygsreprints/ILMA/G122980_ILMA_vol71_no1
https://www.nxtbook.com/ygsreprints/ILMA/G121540_ILMA_vol70_no11
https://www.nxtbook.com/ygsreprints/ILMA/G120882_ILMA_vol70_no10
https://www.nxtbook.com/ygsreprints/ILMA/G120035_ILMA_vol70_no9
https://www.nxtbook.com/ygsreprints/ILMA/G121XXX_ILMA_vol70_no8
https://www.nxtbook.com/ygsreprints/ILMA/G120XXX_ILMA_vol70_no7
https://www.nxtbook.com/ygsreprints/ILMA/G119XXX_ILMA_vol70_no6
https://www.nxtbook.com/ygsreprints/ILMA/G118112_ILMA_vol70_no5
https://www.nxtbook.com/ygsreprints/ILMA/G117382_ILMA_vol70_no4
https://www.nxtbook.com/ygsreprints/ILMA/G116888_ILMA_vol70_no3
https://www.nxtbook.com/ygsreprints/ILMA/G115555_ILMA_vol70_no2
https://www.nxtbook.com/ygsreprints/ILMA/G114774_ILMA_vol70_no1
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no12
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no11
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no10
https://www.nxtbook.com/ygsreprints/ILMA/g109884_ILMA_vol69_no9
https://www.nxtbook.com/ygsreprints/ILMA/g109284_ILMA_vol69_no8
https://www.nxtbook.com/ygsreprints/ILMA/g108494_ILMA_vol69_no7
https://www.nxtbook.com/ygsreprints/ILMA/g107507_ILMA_vol69_no6
https://www.nxtbook.com/ygsreprints/ILMA/g106483_ILMA_vol69_no5
https://www.nxtbook.com/ygsreprints/ILMA/g105803_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/g104743_ILMA_vol69_no3
https://www.nxtbook.com/ygsreprints/ILMA/g103647_ILMA_vol69_no2
https://www.nxtbook.com/ygsreprints/ILMA/g102869_ILMA_vol69_no1
https://www.nxtbook.com/ygsreprints/ILMA/g101930_ILMA_vol68_no12
https://www.nxtbook.com/ygsreprints/ILMA/g100836_ILMA_vol68_no11
https://www.nxtbook.com/ygsreprints/ILMA/g99200_ILMA_vol68_no10
https://www.nxtbook.com/ygsreprints/ILMA/g98468_ILMA_vol68_no9
https://www.nxtbook.com/ygsreprints/ILMA/g97711_ILMA_vol68_no8
https://www.nxtbook.com/ygsreprints/ILMA/G96767ILMA_vol68_no7
https://www.nxtbook.com/ygsreprints/ILMA/G95397ILMA_vol65_no6
https://www.nxtbook.com/ygsreprints/ILMA/G94323ILMA_vol68_no5
https://www.nxtbook.com/ygsreprints/ILMA/G93127_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/G91785_ILMA_vol68_no3
https://www.nxtbook.com/ygsreprints/ILMA/G90956_ILMA_vol68_no2
https://www.nxtbook.com/ygsreprints/ILMA/G89146_ILMA_vol68_no1
https://www.nxtbook.com/ygsreprints/ILMA/G87981_ILMA_vol67_no12
https://www.nxtbook.com/ygsreprints/ILMA/G85409_ILMA_vol67_no11
https://www.nxtbook.com/ygsreprints/ILMA/G83595_ILMA_vol67_no10
https://www.nxtbook.com/ygsreprints/ILMA/G81672_ILMA_vol67_no9
https://www.nxtbook.com/ygsreprints/ILMA/G80238_ILMA_vol7_no8
https://www.nxtbook.com/ygsreprints/ILMA/G79388_ILMA_vol7_no7
https://www.nxtbook.com/ygsreprints/ILMA/G78361_ILMA_vol7_no6
https://www.nxtbook.com/ygsreprints/ILMA/G77448_ILMA_vol7_no5
https://www.nxtbook.com/ygsreprints/ILMA/G75899_ILMA_vol67_no4
https://www.nxtbook.com/ygsreprints/ILMA/G75036_ILMA_vol67_no3
https://www.nxtbook.com/ygsreprints/ILMA/G72720_ILMA_vol67_no2
https://www.nxtbook.com/ygsreprints/ILMA/G72220_ILMA_vol67_no1
https://www.nxtbook.com/ygsreprints/ILMA/G70970_ILMA_vol66_no12
https://www.nxtbook.com/ygsreprints/ILMA/G69813_ILMA_vol66_no11
https://www.nxtbook.com/ygsreprints/ILMA/G67522_ILMA_vol66_no10
https://www.nxtbook.com/ygsreprints/ILMA/G66343_ILMA_vol66_no9
https://www.nxtbook.com/ygsreprints/ILMA/G64859_ILMA_vol66_no8
https://www.nxtbookmedia.com