Charged EVs | Shell to divest 1,000 retail locations, and also expand EV charging. Coincidence?
Oil giant Shell has announced plans to divest 1,000 retail sites over the next two years, and also says it plans to expand its public EV charging business.
Is Shell shutting down gas stations in order to replace them with EV charging hubs? Well, that’s what several media reports implied, but that’s not quite what the company said.
Shell’s “Energy Transition Strategy 2024” mentions electric vehicles at least 30 times (accompanied in almost every case by a mention of biofuels), and concedes that growing EV adoption may cut into the demand for petroleum (at least a little). But we didn’t find anything in the report that specifically linked the company’s decision to trim its retail network to its plans to expand EV charging.
As for the retail site “divestments,” Shell hasn’t said whether the sites in question will be closed or simply sold to other operators.
So, is it out with gas, in with electrons? It’s too early to say. We know that correlation does not equal causation, but we’re also mindful of the relationship between smoke and fire, and the handwriting that sometimes appears on walls.
One thing is certain: Shell is moving into EV charging in a big way. The company sees “attractive growth opportunities in charging for electric vehicles and in biofuels,” and plans a major expansion of its public EV charging network.
“At the end of 2023, we had around 54,000 public charge points for electric vehicles at Shell forecourts, on streets and at locations such as supermarkets. We expect to have around 70,000 public charge points by 2025 and around 200,000 by 2030. Shell Recharge, our public charging network, currently operates in around 33 countries.”
What’s more, Shell expects EV charging to be profitable: “As we grow our business offering charging for electric vehicles, we expect an internal rate of return of 12% or higher.”
Are existing gas stations good sites for charging hubs? Shell obviously thinks so: “We have a major competitive advantage in terms of locations, as our global network of service stations is one of the largest in the world. We have other competitive advantages, such as our convenience retail offering which allows us to offer our customers coffee, food and other convenience items as they charge their cars.”
Many industry observers agree. “If you have the right street corners with the right amount of traffic and the right footprint, if you can turn over some of those existing stations that already have a convenience store, that already have a car wash, that’s a really good cocktail for business success,” Nathan Niese, an Associate Director at Boston Consulting Group, told Automotive News.
Sources: Shell, Bloomberg via Yahoo Finance
