EV segment will not dent demand for lubricants: Castrol

Castrol India, the automotive lubricant manufacturing company, sees no threat from the electric vehicle (EV) segment to its growth, and expect lubricants demand to peak over the next 20 years from now.

"We believe EV adoption will be faster in some segments of buses, auto rickshaws and bikes. But, as per our estimates, even with the efforts that the government is undertaking it will take time to build up. In fact, based on our analysis, we believe the lubricants demand will continue to grow and it will peak after about 20 years from now," Castrol India vice president marketing Kedar Apte told DNA Money.

"There is enough opportunity to leverage brand Castrol to ensure we are relevant even in the EV world," said Apte.

We cater to the number of vehicles that are there on the roads, not what you see the number of vehicles sold, he said. "An average life of a vehicle is about 10 years and in some cases, even 15 years. So those vehicles are going to be there on the road anyway. We cater to the population of vehicles, not just new sales."

By 2040, there could be around 350 million electric vehicles on the road globally, according to estimates. The Indian government, along with the industry, is moving fast on the adoption of EVs across the country, due to alarming levels of pollution in major cities. According to a Niti Aayog report, India could realise EV sales penetration of 30% of private cars, 70% of commercial cars, 40% of buses and 80% of two and three-wheelers by 2030.

Castrol India is part of the UK-based firm BP. Globally, BP has invested in a slew of companies catering to EV infrastructure and new technologies.

"We are exploring opportunities in the EV segment to support the growth in demand. Central to this is the provision of a fast and convenient charging network. We are investing in new technologies and infrastructure solutions. Globally, the company has over 6,500 charging points across the UK," Apte added.

Globally, BP is looking at implications of EV in our industry and they have made some strategic investments already. BP has acquired the UK's largest electric charging network, which is run by BP Chargemaster. Besides, BP has also invested in Storedot to support their development of ultra-fast battery charging, which could reduce the time it takes to recharge an EV battery to five minutes, FreeWire whose mobile rapid EV charging technology was piloted successfully at a UK retail site and PowerShare, China's leading EV charging platforms.

BP is looking at several such projects including in India to ensure that we are ready, he said. Even hybrid vehicles need some fluids, and the complete electric vehicles also need some fluids like coolants in which we are already present in those categories. Also, EVs would need batteries, charging infrastructure.

In India, Castrol has about 19-20% market share in the lubricants market. It is seeing a faster growth in personal mobility segment -- two-wheelers and cars -- which is growing at 6-10%. While the commercial category is still growing, the lubricant consumption actually comes down when an old truck is replaced by a new one because of better technology, which is why that segment of the market is growing by 2-4%, he said.