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with much higher importance to the many players that focus on the transportation sector. As the relationship between mobility and vehicles evolves, the lubricants industry will certainly be disrupted ¬- all lubricant producers and marketers must be ready for change in order to continue serving the world’s personal mobility needs.
1 Contribution of the Automotive Industry to the Economies of All Fifty States and the United States; Center for Automotive Research; January 2015
2 Passenger vehicles plus light commercial vehicles
While the use of a Ford F-150 as a primary personal transportation vehicle may seem unusual to some in Europe or Asia, it is actually quite common throughout much of North America. The changes in mobility behavior discussed previously will almost certainly not result in Teslas replacing only F-150s, as the replacement of mid-sized and compact gasoline and hybrid sedans with electrics is much more likely in both future scenarios. However, if the 120 million electric vehicles on the road in 2040 in the Autonomy scenario were to replace F-150s, then the annual average reduction in driveline lubricant demand would be roughly 1.3 million tons on a global basis, or 10 to 15 percent of the current demand for driveline lubricants. While the magnitude would be lowered through replacement of other vehicles, the potential for significant impacts is clear.
In addition to the magnitude of the potential demand reduction, the changes resulting from evolving mobility choices will also result in changes to the business structure of the lubricant industry. For electric vehicles, virtually all of the lubricant consumption will occur as initial fill, with little need for service fill volume. In addition, the adoption of a “ridership” model for mobility, relying on car-sharing, ride-sharing, and autonomous vehicles, will remove many consumers from the need to maintain the vehicles in which they ride. These vehicles will increasingly be maintained centrally by the fleet operator, and the consumer will no longer need to make decisions regarding when and where to service a vehicle. As a result, the business models for many lubricant suppliers will increasingly focus on initial fill and fleet services, and many automotive service providers will have to find new sources of income.
Outlook
As hay sellers and horse stables learned in the early 20th century, changes in personal mobility can be hugely disruptive to established industries. The future changes in vehicle fleets and consumer preferences will disrupt many industries besides lubricants – fuel suppliers, vehicle manufacturers and their suppliers, automotive service providers, and parking lot operators, to name a few. The nature of government regulation of personal mobility will have to change, and new sources of revenue developed to replace diminishing fuel taxes. The future winners of new opportunities that may arise in battery technology, advanced materials, control and dispatching software, traffic control, and other fields yet unknown are not likely to be today’s established players.
The lubricants industry plays a vital but under-appreciated role in enabling personal mobility, and today’s lubricants industry is heavily dependent on the personal transportation market. It accounts for almost one quarter of total lubricant demand,
3 Michael Sivak and Brandon Schoettle; Recent Changes in the Age Composition of Drivers in 15 Countries; The University of Michigan Transportation Research Institute Report No. UMTRI-2011-43; October 2011
4 Michael Sivak and Brandon Schoettle; Recent Decreases in the Proportion of Persons with a Driver’s License Across All Age Groups; The University of Michigan Transportation Research Institute Report No. UMTRI-2016-04; January 2016
LINK
www.ihs.com/products/oil-markets-downstream- data.html
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LUBE MAGAZINE NO.135 OCTOBER 2016
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