The price imbalance between electric vehicles (EVs) and internal combustion engine (ICE) vehicles grows smaller every year. Power Technology Reseach reports the global EV stock of passenger vehicles to go up to 60 million by 2026 with the EMEA region contributing 35% to the active fleet and EVs would likely represent about half of the annual sales of global vehicles by 2030.
Figure 1 : Active Fleet of Passenger Vehicles
Source Power Technology Research
As the world prepares for the EV boom, oil & gas companies and energy retailers have their eyes set on charging companies. In 2017, oil giant Shell acquired New Motion, an EV charging network operator, and got immediate control of 30,000 charging stations across Europe. It then moved on to make a USD 31 million investment in a battery developing company called Ample. It has also added US-based EV charging platform, Greenlots, to its portfolio along with German company, Sonnen, that provides home energy storage and EV charging solutions. A more recent acquisition made by Shell was that of the charge point operator (CPO), Ubitricity. The acquisition added 2,700 charge points in the UK and 1,500 charge points across the rest of Europe to Shell’s ever growing charging network. As a current operator of 60,000 charging stations across the globe, Shell has now set an ambitious target to have over 500,000 charging stations by 2025 and 2.5 million charging stations by 2030.
Going hand in hand with Shell, British Petroleum (BP) has also joined the EV race and bought the mobile EV charging company Freewire Technologies with plans to roll out 50 kW chargers at a few BP fueling stations. The company made a USD 20 million investment in battery developer start up Storedot and bought UK’s largest EV charging network provider, Chargemaster in a whopping USD 170 million deal. This gave BP access to all of Chargemaster’s 6,500 charge points. The British oil major has made recent investments in Chinese charging platform, Powershare, in order to connect drivers, CPOs and power suppliers.
In a similar move, Total acquired French CPO, G2Mobility, in 2018 which had a network of 10,000 charge points. Total also made some significant investments in the EV charging business acquiring a major UK charging network, Source London, which has added 1,600 on-street charging points to Total’s portfolio. One of their most recent acquisitions includes that of Charging Solutions (Viessmann group), a subsidiary of the group that specializes in EV charging Infrastructure. This acquisition has helped Total become a network operator of 2,000 charge points in Germany alone. The oil giant does not plan to slow down any time soon and has set up a target of operating 150,000 charging points in Europe by 2025.
Figure 2 : Global annual additions of public charge points owned by CPOs* and energy retailers
Source Power Technology Research
*Note: CPOs include independent charge point operators as well as oil companies with an existing charging network.
Energy Retailers are not far behind either when it comes to exploring new business opportunities in the EV industry. With their expertise lying in power generation and distribution paired with familiarity of investing in long-term projects, energy retailers are in an ideal position to develop and operate charging networks. Keeping this in mind, French energy retailer, EDF, acquired PowerFlex Systems which is a California based startup that develops technology to control EV’s charging load on the power infrastructures. EDF has also stated their clear objective to gain a 30% market share in EV charging in Belgium, France, UK, and Italy by 2022 and become one of the leaders in e-mobility in Europe. EDF has also formed a partnership with European charging platform GIREVE and is investing in vehicle-to-grid (V2G) charging technology with the help of their startup, Nuvve, with plans to install 1,500 V2G capable chargers in the UK.
Another well-known energy retailer investing highly in gaining EV assets is the German company E.On. In 2019, the company acquired stakes in US based startup, Vinli, that operated cloud-based platform for EVs connected to the internet. In the same year, E.On also acquired stakes in Finnish developer, Virta, which is a supplier of IT systems for charging electric cars. In Europe, the company is collaborating with Nuvve and Nissan to launch V2G pilot projects and developing another partnership with Danish CPO Clever to roll out 150-350 kW charging stations across the region.
Leading Italian utility Enel has been making their mark in the electric mobility domain as well. In 2017, Enel acquired eMotorwerks responsible for producing all of Enel’s Juicebox charging solution products for their e-mobility division of Enel X. Enel X has established itself as a leading EV charging provider in the world and owner of about 90% of Italy’s electric car charging network. The road does not end here for Enel X and the company with its existing network of 130,000 charge points globally intends to operate a charging infrastructure network of 736,000 charge points by 2022.
French multinational energy retailer, Engie, world’s largest IPP, made a big investment in Belgian CPO, Powerdale in 2016. In addition, a year later the French utility acquired Dutch EV startup EVBox, adding 48,000 charge points to their network across 26 countries.
Compared to European utilities, energy retailers in the U.S. are slower with their entry in the EV business. Nonetheless, San Francisco based energy retailer PG&E took an initiative to install 7500 chargers at workplaces and apartment buildings in California. Similarly, Southern California Edison intends on making a giant investment of USD 436 million in order to add 38,000 chargers across the state by 2023.
More and more government policies promoting the adoption of EVs come into play every day. US President Joe Biden’s target to set up 550,000 new EV charging stations by 2030 with an investment of USD 2 trillion will incentivize American energy retailers and oil & gas companies to keep investing in the EV business. Currently the U.S. has over 42,000 charging stations with about 104,000 outlets.
In Germany, policies mandate the presence of EV chargers at every fuel station and also grant USD 1097 (900 euros) for the purchase of an EV charger. The French government has invested USD 1.58 billion to achieve their target of having 100,000 public charging station by the end of 2021. Policies in this regard have served as catalysts for European oil majors and energy retailers to dig deeper for opportunities in the EV market.
The world is under-going a major energy transition and it is up to oil & gas companies and energy retailers to develop strategies and assess them against the current scenario on how this transition will play out. Both Europe and the U.S. have set aggressive goals to be carbon neutral by 2050 and with the proliferation of e-mobility, most of the developed world now appears to be set to enter this new era of fossil fuel-free transport. Mergers, acquisitions, partnerships, and joint ventures will all play a significant role in materializing this dream of a greener world, but the question remains as to how fast this transition will take place.
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