Another sample sentence I came across:
Le añadiremos aceite al motor cuando lo necesite.
What does the pronoun Le refer to, and is it necessary? aceite o el motor? (Or something else I'm not seeing)
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It is not necessary.
Añadiremos aceite al motor cuando lo necesite.
has the same meaning of
(Nosotros) (le) añadiremos aceite al motor cuando lo necesite.
Añadir is transitive.
Aceite is the direct objet and
motor stands for the indirect.
Le is a pronoun referring to
el motor. According to the RAE rules for pronouns we use "le" as a pronoun referring to the indirect object.
If you had been talking about the oil then you could have said
Lo añadiremos cuando el motor lo necesite.
Since we use "lo" as a pronoun for the direct object.
Notice that in the same sentence of your example you are using "lo" to refer to the oil, just because in that case the meaning is
El motor necesita aceite
aceite will be the direct complement ("El motor lo necesita").