Expanding Automotive Chemicals Sector Projected to Increase at a Rate of 6.5% Yearly until 2034

In the rapidly evolving automotive industry, a significant shift towards sustainability is reshaping the landscape of automotive chemicals. This transformation is driven by various factors, including tightening emissions standards, the push for more sustainable vehicle options, and a strong emphasis on eco-friendly materials.

One of the key players spearheading this change is BASF, which recently unveiled Ultramid Advanced N – a high-performance plastic designed for EV battery housings and expanded recycled-content coatings for sustainable vehicle finishes.

The trend towards bio-based and recycled materials is not limited to BASF. North America dominates the automotive chemicals market, capturing a significant share of 43.60%, while Lubricants and Two-wheelers hold dominant market positions, accounting for over 43.10% and 71.10% respectively.

The need for high-performance lubricants operating under extreme conditions is increasing, with companies like Shell and ExxonMobil advancing their portfolios to cater to this demand. Shell has expanded its E-Fluids portfolio for EVs and invested in bio-based chemicals for sustainable automotive materials, while ExxonMobil is developing high-performance lubricants for EVs and polypropylene-based automotive compounds.

The demand for battery maintenance chemicals in Electric Vehicles (EVs) is growing, including materials for battery pack conditioning and enhancement. Chevron has launched Renewable Base Oils for low-carbon lubricants and partnered with Toyota to explore hydrogen-powered mobility solutions.

TotalEnergies is another company making strides in sustainability, introducing RE:clic, a range of recycled polymers for automotive interiors, and developing EV battery coolants.

Advanced coatings are essential for protecting vehicles against environmental damage and corrosion. The rise of connected and autonomous vehicles introduces complexities in integrating advanced materials and chemicals that meet new technological standards.

Original Equipment Manufacturers (OEMs) hold a dominant market position, capturing more than 61.20% of the automotive chemicals market. The market's growth is projected at a Compound Annual Growth Rate (CAGR) of 6.5% from 2024 to 2034, with the Global Automotive Chemicals Market projected to reach approximately USD 4.9 billion by 2034.

However, challenges remain, such as global supply chain disruptions affecting the availability and cost of raw materials. Economic uncertainty, such as fluctuating interest rates and inflation, can also impact the industry.

The company most prominently recognised for developing recycled plastic for electric vehicle battery housings in the automotive chemicals market is Knauf Automotive. They are known for integrating recycled polypropylene (rPP) and rEPP materials that meet circular economy requirements for battery housings in electric vehicles.

Enhancements in Advanced Driver-Assistance Systems (ADAS) are becoming more common, further driving the need for advanced materials and chemicals in the automotive industry. As the industry continues to evolve, it's clear that sustainability will remain a key focus, with companies continuing to innovate and invest in eco-friendly solutions.