Korean refiners: Lubricating the future of electric vehicles

With the rise of electric vehicles globally, South Korea’s major oil refiners are jockeying to become leading suppliers of lubricants and coolants for eco-friendly cars, including EVs and hybrids.

While hybrids that contain internal combustion engines continue to use lubricants and automotive grease, electric cars also require various types of fluids to cool electric motors and batteries as well as lubricate powertrains and transmission systems to improve machine efficiency.

Such essential oils, often called e-fluids, are also needed to insulate the electric current inside the vehicle.

As larger EVs have an increasing number of battery packs and thus generate more heat, demand for coolants and lubricants is rapidly growing, creating a new opportunity for suppliers.

SK Innovation Co., Korea’s top oil refiner and the parent of EV battery maker SK On Co., is the frontrunner in the EV lubricant business through its affiliate SK Lubricants Co.

SK Lubricants, which started developing lubricants for electric cars in 2010, has supplied e-fluids for about 1.3 million EVs since 2013.

“Our sales of lubricating oils for electric vehicles grew 33% on average for two years from 2019, and in 2021, our sales nearly doubled from the previous year,” said an SK Lubricant executive.

E-FLUIDS FOR FUTURE MOBILITY

GS Caltex, Korea’s second-largest oil refiner, joined in the e-fluids race by unveiling Kixx EV in June of last year. The company has also participated in a global consortium led by Southwest Research Institute (SwRI), a US research organization, to develop a next-generation lubricating oil for electric cars.

S-Oil Corp., in which the government of Saudi Arabia has a stake, launched SEVEN EV, its e-mobility oil, last October, while Hyundai Oilbank Co. plans to unveil its product in the second half of this year.

Analysts said they expect automakers to actively seek to tie up with e-fluid suppliers as EV lubricants are up to 20% more expensive than traditional lubricants.

According to market tracker IHS Markit, the global electric vehicle fluid market is forecast to grow sixfold to 60 million liters by 2025 from 10 million in 2020 with the electric car market expanding to 400 million units by 2040 from the current 4.6 million cars.

The entire e-fluid market, including lubricants and coolants for hybrids, is expected to grow to $8.6 billion by 2030, according to industry data.

“Hyundai Motor and other carmakers are also showing an interest in developing lubricants for future mobility vehicles,” said an official at a local oil refiner.

Write to Jeong-Min Nam at peux@hankyung.com
In-Soo Nam edited this article.