The Indian Express (Delhi Edition)
‘Lubricants market to grow well … EVS both an opportunity and challenge’
PETROLEUM-BASED lubricants used in internal combustion engines (ICE) face a threat from the rising adoption of electric vehicles (EVS), which run on batteries instead of engines. Gulf Oil Lubricants India Ltd, part of Hinduja Group-owned Gulf Oil International, is a leading player in the domestic lubricants market and is valued at around Rs 4,500 crore in the stock exchanges. In a conversation with Aggam Walia, RAVI CHAWLA, Managing Director and Chief Executive Officer of Gulf Oil India, talked about navigating the EV threat, Gulf’s acquisitions in the EV space, and the role of lubricants in improving fuel economy. Edited excerpts:
Your FY23 annual report mentioned how the global acceptance of EVS is a risk that could impact your lubricant business. How would you assess this risk going forward?
The lubricant market, at least in India and in Asia, is going to grow well. When we say good growth– automobiles grow by 78 per cent, normally lubricants will grow half of that as a percentage of volume. A recent study by Klein said that the lubricant market will continue to grow by 3 per cent in volume for the next 10 years, even with the current rate of EV penetration. We believe that growth will be slightly higher, so for the next 1012 years there is no problem. In fact, 75 per cent of lubricants consumed today– in industry, in construction, and in automobiles– will not be affected by EVS.
For us, EV penetration is both an opportunity and a challenge. First opportunity is EVS requiring EV fluids– transmission fluid, brake fluid, greases, coolant– so we’re already there with 7 or 8 OEMS. We are confident we will be in a leadership position in EV fluids, which is not a very large volume– not even 1 per cent– but still a play is there.
How are EV fluids different from regular fluids?
EV fluids are quite similar to the lubricants we do, but we have to tweak the additives we use– the chemicals and the construction– to look at thermal and electrical properties. For example, transmission fluid in EVS will have additional formulation that will improve the thermal properties because of heat transfer from batteries.
The brake fluids and greases are similar to one another. Then, there are hybrid vehicles, which also use the normal engines so they have both. There are different types of EV fluids for hybrid and fully-electric cars. It’s an extension of our current products– most of the technology is available. It’s all about testing the fluids and then launching them. Still, it’s a very small volume– today it’ll be around 1,800 kilolitres. Within four years, we are expecting it to be between 12,000 to 15,000 kilolitres.
Can you give me an overview of Gulf’s EV play?
Given our brand distribution and our customers, like OEMS and those in the infrastructure sector, we believe we should be in the EV value chain. Today, India is about 30-40 per cent of Gulf Oil worldwide, so it is a focus market for us. In the last three years, we have made three investments.
One, which we made at a global level, is Uk-based Indra Renewable Technologies that deals with EV chargers and has an 8 per cent market share in the UK. We want to bring this charger to India and localise it. In addition to that, we have invested 26 per cent in Noidabased Electreefi, which makes charging software. They’ve already tied up with various vehicle OEMS and some utilities. The third investment we made was in October– a 51 per cent stake in Ahmedabad–based Tirex Chargers, a charger manufacturing company. They have about 810 per cent market share in fast chargers and they do slow chargers too.
Today, Tirex is looking at how it can continue keeping its market share in the DC charging market, which is going to become a billion dollar opportunity in the next five to six years.