Refiners in South Korea are in a race to expand their presence in the electric vehicle lubricants market through overseas production facilities and cooperation with foreign companies to speed up growth in the profitable business of future mobility.

Automotive lubricants usually make up 15-40% of refiners’ annual operating profits although their sales account only for up to 5-10% of their revenues.

SK Enmove Co., the lube oil subsidiary of South Korea’s top refiner SK Innovation Co., sold 7.2 million liters of EV lubricants last year, 72 times 100,000 liters in 2013 when it started the oil, according to industry sources on Sunday. Its global EV lubricants market share was estimated at 20%.

The company formerly SK Lubricants Co., South Korea’s first company to roll out lube oil for EVs, aims to increase its sales by 50%, nearly double the 28.8% growth in the global lubricants market forecast by an industry tracker BIS Research.

“We are considering securing production bases for each key overseas market,” said an SK Enmove official.

Prices of EV lubricants, which improve battery efficiency and driving mileage, are usually about 20% higher than those of lube oils for internal combustion engine cars.

The global EV lubricants market was expected to surge to $17.4 billion by 2031 from $1.4 billion in 2021 driven by increasing sales of the clean vehicles, according to BIS Research.

ALL REFINERS JOIN RACE

Other refiners in South Korea upped the ante to win the market.

GS Caltex Corp., which operates the second-largest refinery in South Korea, introduced the Kixx EV in June 2021. The 50-50 joint venture between South Korea’s GS Energy Corp. and US Chevron Corp., recently joined hands with India’s Sunrise Efficient Marketing Ltd. for the lubricants business, including EV lube oil, in the world’s third-largest auto market.

S-Oil Corp., Saudi Arabian Oil Co.’s refining unit in South Korea, launched the S-Oil Seven EV in October 2021. HD Hyundai Oilbank Co. backed by Saudi Aramco released the Hyundai XTeer EVF last year.

South Korean refiners also set their sights on liquid coolants for heat management in data centers and energy storage systems as rapid growth in artificial intelligence and renewable energy is expected to ramp up demand, offsetting the slowing global EV market.

Write to Hyung-Kyu Kim at khk@hankyung.com
 
Jongwoo Cheon edited this article.