BASE OILS
From ICE to EV fluids: How are shifting mobility trends redrawing the global base oil demand map? Which base oil will prevail?
Anuj Kumar, Senior Project Manager and Sharbel Luzuriaga, Senior Project Manager, Kline + Company
The global base oil industry is undergoing one of the most profound transformations in its history. For decades, lubricants derived from base oils were indispensable to internal combustion engines (ICEs). Today, the rise of electric vehicles (EVs), including hybrid, plug-in hybrid, and full electric battery vehicles, combined with regulatory pressures, sustainability demands, and technological innovation, is reshaping both the scale and composition of base oil demand.
While EVs reduce or eliminate the need for traditional engine oils, they introduce new requirements for specialty fluids: dielectric, thermal management, and transmission and e-axel fluids that require higher- performance base oils such as Group III+, IV (PAO), and V (esters, PAGs). This shift, combined with uneven adoption rates across regions, is redrawing the global demand map for base oils.
This article explores the forces driving these changes, assesses their implications for base oil suppliers, and identifies strategies to remain future-proof in an evolving mobility landscape.
A changing market
The global base oil market has long been tied to automotive lubricants, which account for more than 50% of the total demand. The ICE defines the industry’s scale, specifications, and technology roadmaps. However, two megatrends are forcing a reset: 1. Electrification of mobility: In 2024, over 35% of new passenger vehicles sold globally were
Anuj Kumar Sharbel Luzuriaga
either electric or hybrid, including plug-in hybrid electric vehicles (PHEV) and hybrid electric vehicles (HEV). Preliminary data for 2025 shows double- digit growth across all electrified powertrain types. Hybrid vehicles have gained significant traction since governments, including the United States, are retreating from ambitious battery electric vehicle (BEV) targets. Moreover, the European Union’s revised targets permit the sale of hybrid vehicles beyond 2035. EVs impose additional performance requirements on fluids to address the unique operational conditions of electrified powertrains. Fluids used in EVs should have excellent heat removal properties, high dielectric breakdown voltage, low viscosity, and material compatibility.
2. Sustainability and regulation: Lower viscosity, longer drain intervals, and tighter limits on formulation components that can compromise aftertreatment systems are causing a shift from legacy formulations to higher-performing base oils, especially where oxidative stability, volatility control, and low-temperature performance are important.
LUBE MAGAZINE NO.191 FEBRUARY 2026 9
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