Electrification to Trim Heavy-Duty Volumes but Boost Market Value Through 2040
A new Kline & Co. report commissioned by ILMA finds that while commercial vehicle electrification will gradually reduce lubricant volumes in the U.S. and Canada, the overall market value will continue to rise through 2040, fueled by the adoption of synthetic and premium heavy-duty motor oils (HDMO).
According to the study, total commercial vehicle lubricant (CVL) demand across both countries reached about 2.7 billion liters (713 million gallons) in 2024, split nearly evenly between on-highway and off-highway equipment. HDMO accounts for roughly 60% of this total, making it the cornerstone of the market.
To access the full report, visit ILMA’s Member Resources page.
Key Takeaways for ILMA Members
- HDMO dominates CVL demand at 60% of total volume.
- Overall volume down 1.5%, value up 40% by 2040.
- Synthetic penetration in HDMO to exceed 70% across North America.
- Combustion engines will continue to dominate off-highway sectors through 2040.
- On-highway electrification drives the steepest decline in Canada; off-highway demand remains resilient.
“As we saw in our earlier EV study focused on the passenger car segment, electrification will bring disruption, but also opportunity,” said ILMA CEO Holly Alfano. “ILMA members will thrive in this evolving market by doing what we do best: staying agile, focusing on customer needs and delivering high-performance solutions.”
Volume Slows, Value Climbs
Kline projects that total CVL volume will decline by about 1.5% by 2040 as fleet electrification, efficiency improvements and longer drain intervals take effect. Yet the market’s total value is expected to grow more than 40%, from around $10 billion in 2024 to over $14 billion by 2040.
In the U.S., CVL market value is forecast to rise at a 2.5% compound annual growth rate (CAGR), and in Canada at 2.2% CAGR, as fleets increasingly adopt synthetic and semi-synthetic formulations that offer superior performance and extended service life.
Lighter Oils, Higher Performance
The study highlights a continued shift toward lower viscosity grades. The SAE 15W category still represents more than half of HDMO demand, but SAE 10W-30 and 5W-30 grades are gaining share — a trend expected to accelerate with the debut of the next service category of HDMO (now called PC-12) in 2027.
Canada is leading this transition, with colder climates and OEM recommendations pushing earlier adoption of lighter, fuel-efficient grades.
By 2040, synthetic HDMO penetration is projected to climb from 47% to over 70% in the U.S., and from 62% to more than 80% in Canada. The shift toward premium lubricants is also expected to lift average selling prices and overall market value.
Uneven Impact
Electrification will reshape the market unevenly across regions and sectors. In Canada, stricter federal and provincial mandates, including 100% zero-emission vehicle (ZEV) sales by 2035, are expected to drive a 45% decline in on-highway HDMO demand over the next 15 years.
In the U.S., the impact is milder but still significant. Depending on the pace of regulation and infrastructure rollout, on-highway lubricant demand could drop by 20–35% over the same period.
Off-highway segments will remain more resilient.
- Mining: Electrification is advancing in underground operations, with up to 60% of underground equipment in Canada expected to be electric by 2040.
- Construction: Larger machines remain diesel-powered, while compact excavators, loaders and cranes lead electrification. HDMO demand here is projected to grow modestly (0.3–0.7% CAGR) thanks to strong infrastructure investment.
- Agriculture: Electrification remains limited to low-horsepower tractors. HDMO demand is expected to decline less than 1% through 2040, largely due to efficiency gains and synthetic oil adoption.
OEMS and Industry Outlook
OEMs continue the push toward decarbonization. Ford and Freightliner dominate the on-highway segment, together accounting for over 40% of 2024 market share, and both aim for 100% zero-emission sales by 2040–2050.
Off-highway leaders including Caterpillar, Komatsu, John Deere and CNH are testing electric and hybrid platforms in partnership with major mining and construction companies, while continuing to support ICE fleets that will remain in service for decades.
To access the full report, including the earlier passenger car EV report, visit ILMA’s Member Resources page.
The report was discussed by a panel of experts at the LubeTrends Live! town hall during the 2025 ILMA Annual Meeting in Boca Raton, Florida. Access the recording and slides in the LubeTrends Library.
For more analysis on how to take advantage of these opportunities, see the Market Report in the November 2025 issue of Compoundings magazine: The Electrification Crossroads: What It Means for Independent Lubricant Manufacturers.