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Alternative Powertrains Need Lube Too
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From Interact Analysis
The global commercial vehicle market is undergoing a period of significant change, as it moves over the next 15-20 years toward a majority of annual registrations comprising electric, hydrogen or bio-fuel vehicles. By 2030, 7% of trucks on the road are expected to be battery electric vehicles (BEVs), growing from a negligible amount today to around 1% by 2025 and increasing sharply toward the end of the decade.
This will have an impact throughout the whole value chain and market intelligence experts at Interact Analysis have produced a free report into the impact of the move toward alternative fuel powertrains and electrification on the fuel and lubricant industry.
As total cost of ownership (TCO) comes down, sales of commercial electric vehicles are due to go up. Interact Analysis found TCO is the leading factor in commercial vehicle purchases, with a number of other factors affecting adoption of BEVs, including higher upfront costs, resistance to change, lower range for electric vehicles, lack of charging infrastructure and unfamiliarity.
Analysis of historical data shows BEVs only start to win significant market share when the overall TCO advantage is in the range of 20%50%, with 20% seeing the majority of purchasers stick with internal combustion engines (ICEs) and 50% seeing most make the switch to battery vehicles.
As TCO for commercial electric vehicles falls, demand for diesel will decline slowly at first, but the pace of decline will accelerate out to 2030 as electric buses and trucks become more popular. TCO is not as strong for hydrogen fuel cell (HFC) and hydrogen internal combustion engine (H2 ICE) vehicles and so they have a much lower share of the commercial vehicle market.
In its executive report Global Truck, Bus and Off-highway Vehicle Electrification and Alternative Fuel, Interact Analysis shares some of its findings about electrification and alternative fuels in the commercial vehicle market, looking at how the market for fuel and lubricants will develop out to 2030 and beyond.
