In the case of BP, car chargers to overtake pumps in profitability competition

File Photo: The charging point for the BP Pulse electric vehicle will be seen on July 16, 2021 in London, England. REUTERS / Peter Nicholls /

January 14, 2022

Ron Busso

London (Reuters) – According to BP, chargers for high-speed electric vehicles are more profitable than filling up gasoline vehicles.

This milestone marks an important moment for BP looking to shift away from oil and expand its business around the electricity market and electric vehicles (EVs).

EV charging has been a deficit business for many years overall for BP and its rivals who are investing heavily in its expansion. The division is not expected to be profitable by 2025, but on a margin basis, BP’s fast battery charging points, which can refill the battery within minutes, are approaching levels that are expected to fill up with gasoline. increase.

“When we think about fuel tanks and fast charging, we’re getting closer to where fast charging business fundamentals are better than fuel,” Emma Delaney, BP’s customer and product manager, told Reuters.

The growing demand for quick chargers in the UK and Europe has already brought profit margins close to those of traditional petrol filling, she said.

Delaney does not disclose the profit or loss of EV charging or the cases where the overall profit from the business may exceed the conventional fuel. In 2020, BP reported a gross profit on retail fuel sales of $ 3.5 billion. The customer and product division made a net profit of $ 2.6 billion in the first nine months of 2021, accounting for about 17% of the company’s total profit.

According to the company, electricity sales for EV charging in the third quarter of 2021 increased by 45% from the previous quarter.

According to consultancy Thunder Said Energy, traditional fuel retail margins at gas stations are about 17 cents per gallon and about 0.4 cents per kilowatt hour.

London-based BP plans to expand its EV charging business from the current 11,000 to 70,000 charging points by 2030 over the next few years.

Like its rivals, including Royal Dutch Shell, BP’s retail business, including fuel sales and convenience stores, is profitable and central to its energy transition strategy.

“Overall, there are great opportunities for fast charging of consumers, businesses, and more common fleet services, where we see growth and margins,” says Delaney.

Shell aims for 500,000 charging points worldwide by 2025. On Thursday, we opened our first ultra-fast EV charging station in London. It can charge 80% of the car’s battery in 10 minutes.

While rivals like Shell are investing in a variety of charging technologies in the UK and elsewhere, including tens of thousands of low-speed, low-voltage, street charging points, BP focuses on high-speed and ultra-fast charging technologies. increase.

“We chose to actually charge at high speeds, for example, on the go, rather than at low speeds on street lamps,” says Delaney.

However, fast charging, which is defined as 50 kW or more, and ultra-fast charging, which exceeds 150 kW, are expensive to install because they require a large investment in a rugged power infrastructure.

Adrian Dell Maestro, Director of PwC Strategy &, said:

Efforts to expand EV charging points are also aimed at maintaining a strong customer flow at BP gas stations and their adjacent convenience stores.

“There was land acquisition for chargepoint operators, including oil majors, to buy real estate and build infrastructure with the goal of generating future growth revenue,” said Del Maestro.

(Report by Ron Bousso, edited by David Evans)

In the case of BP, car chargers to overtake pumps in profitability competition

Source link In the case of BP, car chargers to overtake pumps in profitability competition

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