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:
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 7-8 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 10-12 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.
