Another notable factor is that the volume of metalworking fluids needed to produce EV parts is far less than the volume needed to produce internal combustion engine parts. Without the complex combustion engine blocks, metalworking fluid makers could see drastically reduced volume demand globally. 

Global market intelligence and advisory firm Kline & Co. conducted a study—Impact of EV Manufacturing on Metalworking Fluids—that sought to explain exactly how the growing production of EVs will affect the metalworking fluid market in the coming years. The study closely looked at 14 key country markets—Canada, United States, Mexico, Germany, France, Italy, Poland, Spain, United Kingdom, China, India, Indonesia, Japan and South Korea. Together, these 14 countries made up approximately 80% of global metalworking fluid demand in 2023 and also accounted for about 90% of global EV manufacturing.  

The Path to Electrification 

To understand how the inevitable rise of EVs might impact metalworking fluids, it is vital to first understand what the EV landscape looks like and how it might change in the coming years.  

“What is the path and the course of electrification that we are observing? Certainly, things are changing. This is a very fluid and dynamic situation,” Sharbel Luzuriaga, industry manager, energy for Kline, said in a May 16 webinar. “There are certainly some bumps on the road; there are countries that would be growing at a faster pace than others. But most essentially, is there a commitment by the governments to promote and foster electrification? This is something that would be contributing to sustainability targets, so governmental support is instrumental in the beginning stages in terms of getting electric vehicles out on the roads.” 

Currently, internal combustion engines (ICEs) rule the global roads. Kline estimated that about 90% of vehicles worldwide were powered by ICEs in 2023. But if electrification targets in key regions are met as planned, that figure will be slashed by more than half by 2050.  

“The dominant position of internal combustion engines that has been observed over the past 100 years will gradually be increasingly challenged by electric vehicles,” Luzuriaga said. “Certainly, in the future, ICEs will not be the only solution for personal mobility.”  

However, the rate at which this shift from ICEs to EVs will occur can vary based on a number of factors. As mentioned, government support is crucial for successful and quick electrification. Adequate infrastructure, improvements in vehicle technology and decreases in the total cost of EV ownership will also help EV adoption to gain speed in the coming years.  

Vehicle manufacturers have also been reactive to the push for more EVs. “OEMs are taking the transition seriously from a commercial point of view,” Luzuriaga said. “Some OEMs are taking a very ambitious approach in terms of electrification. Tesla, BYD and other top-selling BEV manufacturers in the world have some ambitious plans, including opening new manufacturing plants.”  

Some of those OEMs’ plans have suffered some setbacks in the past few months, though, and the carmakers have had to reevaluate their strategies. For instance, Ford and General Motors have announced delays to their EV expansion plans, and Audi said it may shut down its plant in Brussels. (For more about recent setbacks in EV manufacturing, turn to Page 20.) 

Impact on MWF  

According to Kline, a typical ICE passenger vehicle is made up of significantly more parts than a comparable BEV is.  

“Basically, we’re seeing that about 40% of those components are lost when a battery electric vehicle is being produced,” Luzuriaga said. “This is a huge amount, and most of those are concentrated in a crucial part of the vehicle—it’s basically the powertrain, where the power is generated and transmitted to the transmission. Those components are the ones that have the highest number of parts.”  

Outside of the powertrain, EVs and ICEs “are pretty similar in terms of the number of parts,” Luzuriaga said.  

Because of the significant differences between the engines and drivetrains of BEVs and ICEs, manufacturing of each respective vehicle type requires different volumes of metalworking fluids. “If we look at the different vehicle parts from the point of view of metalworking fluid consumption, we can see that precisely those parts—like the engines and the drivetrains—are mostly affected by the transition to BEVs,” Luzuriaga said. “Essentially, we can predict that the effect on metalworking fluids consumption will be significant.”  

In fact, Kline has estimated that metalworking fluid consumption will be about 30% lower for the manufacture of BEVs compared to that of ICEs.  

Conversely, for hybrid electric vehicles, the shift in metalworking fluid usage will not be nearly as pronounced “because hybrid electric vehicles still have internal combustion engines that are smaller but are still incorporated in their system,” Luzuriaga said. “Secondly, hybrids have a much more complex powertrain, so in hybrid vehicles we don’t expect that there will be a decline as pronounced as for battery electric vehicles.”  

Which classes of metalworking fluids are expected to take the hardest hit as EVs increase in popularity? 

“Overall, we are estimating that removal fluids—which on average account for about 60% of the overall metalworking fluids used for vehicle manufacturing—will be more affected by the shift toward battery electric vehicles,” Luzuriaga said. “There are huge amounts of removal fluids that are used in the machining of key components of the engine blocks, gears, bearings and exhaust pipes as well. So removal fluids will not be necessary in the production of many battery electric vehicle parts.”  

To a lesser extent, protecting fluids and treating fluids will also see a decline. “The expectation is that these will be slightly affected” by the transition to BEVs, Luzuriaga said.  

In contrast, forming fluids might actually see an increase in demand as more BEVs are manufactured. This initial increase will likely be the result of forming fluids’ role in creating key BEV components like battery casings.  

Opportunities Amidst Change 

“Despite these negative implications in terms of volumetric demands for metalworking fluids, there will also be changes specific to EV manufacturing that will represent untapped growth opportunities for metalworking fluid” producers, Luzuriaga said. 

According to Luzuriaga, one such growth opportunity will be in fluids that are able to machine new materials that are not currently being used at a high level but likely will be in the future. Such materials include copper, aluminum and stainless steel.  

A related opportunity could be in developing fluids that meet the demands of changes in metalworking technology itself. Some of the major trends influencing metalworking right now include high-speed cutting, minimum quantity lubrication, dry machining, near net shaping as well as 3-D printing.  

For metalworking fluid manufacturers, the overall keys to success in a quickly evolving automotive market will be both flexibility and diversification. Lubricant companies may be forced to invest in research and development to create products specifically tailored to BEV manufacturing processes. As automakers continue to refine their production methods and tweak vehicle technology to better fit the needs of their customers, there may be opportunities for innovative fluids that can create higher-quality parts while also reducing costs. 

As mentioned above, there will likely be some—albeit limited—opportunities for metalworking growth within the automotive segment. But while the automotive sector remains a crucial market, exploring opportunities in other industries that require precision manufacturing could help to offset any potential declines in metalworking fluid demand.  

“As we can see, in the past, the metalworking fluids market has been highly resilient. This was especially evident during the COVID period,” Luzuriaga said. “Stakeholders and formulators are rapidly addressing those emerging market needs by offering new formulation approaches or by introducing improved versions of existing chemistries that are safer and have better sustainability profiles.”  

All in all, those fluid makers who quickly and effectively identify and take advantage of these opportunities will be the ones who thrive amidst an ever-evolving automotive landscape.  

Sydney Moore is managing editor of Lubes’n’Greases magazine. Contact her at Sydney@LubesnGreases.com