SK Enmove launches four ZIC lubricants for hybrids at six Chinese automakers, including BYD

SK Enmove expands hybrid operations, supplying four ZIC lubricants to six Chinese automakers, including BYD, focusing on HEV, PHEV, and EREV.

Strategic Summary

2019-2024: SK Enmove begins supplying four types of ZIC lubricants aimed at hybrids to six Chinese automakers, including BYD. The partnership covers conventional hybrid vehicles, PHEVs, and EREVs, expanding the portfolio beyond internal combustion engines.

This move demonstrates the strategy of diversifying the business line, seeking cash stability with lubricants while SK On manages the battery business, which still registers losses in part of the group.

Products and Applications

• ZIC X9 0W-30: used in Li Auto EREV models
• ZIC X7 0W-20: supplied to BYD and Geely Automobile
• ZIC X6 0W-20: applied to Changan Automobile and GAC Group
• ZIC X6 5W-30: used in Chery Automobile models

Technical Characteristics

The formulations are of low viscosity with improved performance at low temperatures. ZIC X9 uses PAO and VHVI to facilitate cold starts and engine protection, X7 prioritizes cleanliness and fuel efficiency, while X6 enhances stable oxidation and deposit control, especially in turbocharged and direct-injection engines. All lines are low-ash to meet emission regulations.

Why This Matters for Hybrids

Hybrid vehicles alternate between engine and electric motor, causing frequent restarts at low temperatures and accelerating oil degradation. SK Enmove claims to have developed the formulas to meet these specific operational demands.

Expansion and Cooperation

The company plans to expand cooperation with Chinese automakers and increase supply volume, reinforcing the presence of the ZIC line in the HEV/PHEV/EREV segment.

Vision for EVs and Synergies with Batteries

In addition to engine lubricants, SK Enmove also operates in reduction gear oil for electric vehicles, including partnerships with Hyundai, Kia, and major North American manufacturers. Strategically, the integration with SK On expands the company's role in financial performance, seeking synergies that go beyond batteries.

Projections indicate over 200 billion won in additional EBITDA by 2030, with total EBITDA exceeding 10 trillion won and a Debt/EBITDA below 1.0 by 2030. Technological synergy includes the development of immersion cooling for batteries, using dielectric fluids and thermal management materials from SK Enmove, with monetization expected between 2030 and 2031.

The Near Future

Revenue from battery immersion cooling is expected to begin around 2030-2031, with possible early commencement in vehicle validations and testing. The schedule depends on technical validation and scale production.

Comment: How do you view the balance between specialized lubricants and thermal management solutions in the automotive ecosystem? Leave your opinion in the comments on the impact of these partnerships on the hybrid and EV industry.