The transition to electric vehicles (EVs) is happening faster than predicted before.
Current forecasts for EVs sales show that they are capable of taking over the automotive market. The Bloomberg New Energy Finance forecast estimates that EVs will account for a third of the global fleet by 2040, potentially reducing the global demand for oil by about eight million barrels a day.
Though this assessment signifies high hopes of reducing the global carbon footprint, of which vehicle emissions compose a large part, the news might not be so well-received by oil companies whose revenue relies largely on petrol-fueled cars. With this in mind, certain companies have decided to move along with the times.
Shell and EV charging infrastructure for the forecourt
One such company is oil and gas multinational Royal Dutch Shell. In October 2017, the Dutch company announced its purchase of NewMotion, one of Europe's leading EV charging providers.
Dutch-based NewMotion already operates tens of thousands of private and public charging points across more than 20 European countries, including in homes and businesses. This means that Shell can now reach into the spaces where EV charging is more likely to happen, where vehicles will be parked for longer periods of time, and the charging systems will not be confined to their station forecourts.
This move was shortly followed by the inauguration of an EV recharging service in selected forecourts in the UK. The service was done in partnership with Allego, a Dutch EV charging provider, that will be responsible for supplying the fast chargers needed for the forecourt. Shell has also partnered with high-powered charging network operator IONITY to offer fast charging points in its biggest highway stations across 10 European countries.
“Demand for electric vehicle charging on Europe’s major highways is set to grow rapidly. We are pre-empting drivers’ need to charge quickly, giving customers access to fast charge points across 10 European countries,” István Kapitány, Shell’s Global Executive Vice President of Retail, said in a statement.
The investments in Allego, NewMotion and IONITY complement each other to widen Shell's EV charging rollout. According to Matthew Tipper, Shell’s Vice President for New Fuels, “This move provides customers the flexibility to charge their electric vehicles at home, work and on the go. We believe we are developing the full raft of charge solutions required to support the future of EVs.”
BP and mobile EV chargers
BP is being more cautious in its approach. The British oil and gas multinational is testing implementing EV charging systems in selected retail locations around the United Kingdom and Europe, in a move tailored to cater to EV drivers.
In January 2018, BP announced a multi-millionaire investment in FreeWire Technologies, a US-based manufacturer of mobile EV chargers.
The decision to install mobile chargers is not incidental. This type of technology requires far less hardwiring and infrastructure to function, and it does not need to be integrated to the electrical grid. In addition, it offers a degree of flexibility as to when and where BP would want to locate its charging facilities. This means the company would respond to oncoming customer demand more quickly and easily.
According to a statement by Tufan Erginbilgic, Chief Executive Officer of BP Downstream, “Using FreeWire’s mobile system, we can respond very quickly and provide charging facilities at forecourts where we see the greatest demand without needing to make significant investments in today’s fixed technologies and infrastructure. The opportunity also to explore options for providing charging services away from our existing retail sites makes FreeWire an ideal partner for BP.”
Even though BP is not connecting to the grid as of yet, this move can be seen as a trial run to analyse consumer preferences and behaviour in regards to EV charging patterns. It is not unlikely that BP may, in the future, consider installing charging systems in higher numbers and integrating them into the grid. The company has declined a request for comment in this respect. It has also not publicised whether it intends on rolling out chargers for home and office spaces.
Consumer behaviour and low-carbon regulations
These actions are attempts to adhere to environmental policies, especially since European Union (EU) regulations are quickly forcing restrictions on carbon footprint outcomes.
The European Commission unveiled the Clean Mobility Package in 2017, which includes measures such as incentivising EV purchases and making sure a more comprehensive charging infrastructure is in place. The package is part of the EU's efforts to attend to the goal of reducing carbon emissions by 40% until 2030 as dictated by the Paris Agreement.
Some of Europe's biggest cities are also committed to improving air quality and reducing carbon emissions. The London Mayor, for example, is proposing measures to clear the London air and reduce the capital's carbon footprint. Shell has put itself at the forefront of this initiative by collaborating with Transport for London (TfL) to install charging points across the capital.
According to Shirley Rodrigues, London's Deputy Mayor of Environment and Energy, "As the Mayor moves towards making London's transport system zero-emission by 2050, TfL is working with boroughs to increase charging infrastructure across our city. The expansion we require will continue to demand strong collaboration with industry, private landowners and greater investment from Government.”
Additionally, as well as responding to changing consumer behavioural patterns, BP and Shell's moves may come to incentivise customers to migrate to EVs - customers are far more likely to purchase EVs if they are confident that there is a convenient and reliable charging infrastructure in place to cover short and long distances likewise.
These companies, which rely so heavily on the automobile market, might end up not only reacting to market changes, but accelerating such changes in the first place.