An Analysis of the Changing Market Size of Automotive Electrification and PCMO/HDMO

The wave of automotive electrification is indeed profoundly reshaping the demand landscape in the lubricant (PCMO/HDMO) market. The overall trend is that growth in the traditional internal-combustion engine vehicle lubricant market will slow down or even shrink, while lubrication and cooling products specifically designed for electric vehicles will create new market opportunities.

Demand impact:

• PCMO demand decreases Pure electric vehicles don't have internal combustion engines, so they don't require engine oil.
• HDMO pressure is evident. Although the electrification of commercial vehicles is progressing slowly, it will still impact the heavy-duty engine oil market in the medium to long term.

Product Features

Demand is declining, while performance requirements remain largely stable.

Market structure

Total market growth is slowing, competition is intensifying, and corporate profits are under pressure.

In addition to the structural impacts mentioned above, the following trends also deserve attention:

• The electrification process has not been entirely smooth. It is worth noting that the current electrification transformation... There is uncertainty in speed. Some automakers, due to technological bottlenecks, cost pressures, and market demand falling short of expectations, have already... Slowed down or adjusted its electrification goals. This means that the decline of the traditional lubricants market may be slower than previously expected, leaving relevant companies with a longer window of opportunity to undergo transformation.

• Hybrid vehicles represent an important transitional market. Before fully electric vehicles become widespread, hybrid vehicles (HEVs/PHEVs) will continue to hold a significant market share. The specialized lubricants for these vehicle types—such as those listed in the table—are worth paying close attention to. Incremental market 。

• Thermal management requirements are becoming increasingly prominent. In the electric vehicle market, Battery Thermal Management System It is of paramount importance. Whether employing liquid cooling and heating or phase-change material (PCM) technology, the goal is to keep the battery operating within its optimal temperature range, which in turn places higher demands on the performance and technical specifications of the associated coolant and thermal-conducting materials.

Faced with these changes, lubricant manufacturers, suppliers, and investors alike can consider the following directions:

• For traditional lubricant oil companies ：

  • Control costs and consolidate existing markets. Against the backdrop of shrinking traditional demand, optimizing production efficiency and supply chain management is crucial.

  • R&D transformation and development of new product lines : Key development Hybrid vehicle-specific oil and Electric vehicle gearbox oil Wait for new products and pay attention to those related to battery thermal management. Coolant Technology.

• For investors and new entrants ：

  • Focus on leading players in niche markets with technological leadership. Invest in companies that have deep technological expertise and a robust patent portfolio in areas such as specialized fluids for electric vehicles and thermal management fluids.

  • Seize upstream opportunities in the industrial chain. Focus on opportunities in key components and raw materials such as electric vehicle thermal management systems and insulation materials.