S.Korean refiners’ race for EV lubricants heats up

South Korean major refiners are upping the ante to win the market for electric vehicle lubricants and liquid coolants for heat management amid the rapid migration to electrification and artificial intelligence-powered data management.   

HD Hyundai Oilbank Co. last week launched EV lubricant brand Hyundai XTeer EVF, finally joining its three bigger crosstown rivals in the EV lubricant race.

SK Enmove Co., a unit of Korea’s No. 1 oil refiner SK Innovation Co., was the first in the country to roll out lube oil for EVs in 2013. GS Caltex Corp. and S-Oil Corp., the country’s second- and third-largest oil refiners, respectively, introduced their own EV lubricants in 2021.

As the global EV lube oil market is anticipated to register strong growth amid the fast transition to electrification in the automotive industry, competition in the Korean EV lubricant market is set to intensify.

According to global industry tracker IHS Markit, global EV lubricant demand is forecast to jump sixfold to 60 million liters in 2025 from 2020.

Lubricating oil, produced from crude petroleum, reduces friction resistance in gears and prevents corrosion.

Electric vehicles also need lubricants to cool motors, which generate heat during driving, and improve overall driving efficiency.

Formerly known as SK Lubricants Co., SK Enmove, which is a leading lube oil maker for combustion engine cars, has set a goal to become the world’s top EV lubricant maker by 2040, the company’s Chief Executive Park Sang-gyu said in September.

COOLANTS FOR DATA CENTER

Korean refiners also set their sights on liquid coolants for heat management in data centers that are springing up across the world to deal with the rising demand for AI-powered data management and distribution.

Considering that vehicle lube oils and liquid coolants are produced from base oil, lubricant makers have the upper hand in the development of thermal cooling systems such as liquid immersion cooling technology.

Liquid immersion cooling is used in data centers and energy storage systems to cool batteries and data servers by directly immersing them in a cooling liquid. This is considered a more efficient heat management technology than air cooling.

SK Enmove in October succeeded in developing technology to cool graphics processing units by dipping them in insulating oil enhanced with a special cooling fluid in partnership with its sibling company SK Telecom Co. and Texas-based Green Revolution Cooling Inc. (GRC), a data center cooling system provider.

In August, it and GRC also teamed up with US computer maker Dell Technologies Inc. to develop lubricant-based liquid coolants for data centers and build a supply chain in key growth regions around the world.

GS Caltex last month released lube oil-based liquid immersion coolants, while S-Oil and HD Hyundai Oilbank are in the middle of developing similar products.

SK Enmove expects the global immersion coolant market to grow to 42 trillion won ($32.3 billion) by 2040 from less than 1 trillion won in 2020.

“The lubricant business has not been local refiners’ main business, with their lube oil sales generally accounting for less than 10% of their total revenue,” said an unnamed official in the Korean refining industry.

“But the lubricant and liquid immersion coolant business is expected to gain more traction in line with the expansion of the EV market and advancement of data servers.”

Write to Mi-Sun Kang at misunny@hankyung.com

Sookyung Seo edited this article.