Oil and Gas Sector Strategies in Electric Vehicles

Oil and Gas Sector Strategies in Electric Vehicles

Summary

Major oil and gas companies expand their investments to EV charging stations to meet the demand due to the growing EV market and diversify their assets to remain profitable long-term.

As the world races to meet net zero targets, both public and private sectors are having to find alternative solutions and invest in innovative technologies. The high impact the transportation sector has on the environment has led to a hunt for alternative fuel solutions in order to mitigate the volume of emissions produced by this sector. A type of alternative fuel vehicle that has been growing rapidly is battery electric vehicles (BEVs), also referred to as EVs. With the growth of EVs, their respective charging infrastructure has had to expand as well, calling for companies across multiple sectors to get involved and help meet the growing demand. Due to governmental and environmental pressures to reduce their emissions, as well as growing concerns about long-term profitability, O&G companies have had to adapt and diversify their investments. One of their avenues for alternative investments is EV charging stations, as they align with their pre-existing assets, i.e. gas stations. The oil companies that have been investing in EV charging stations the most are: Shell, TotalEnergies, BP, and Eni. Following them but with slower developments are: Repsol, Pkn Orlen, Petronas, Chevron, and Phillips 66. However, not all big oil companies have decided to branch out to EV charging infrastructure, namely: Exxon Mobil, Valero, and Conoco Phillips. This decision may have negative repercussions on their financial performance in the future, given the predicted decrease in demand for fuel from 2030 onwards.

Key Highlights

Global fuel demand is not set to return to pre-COVID-19 levels with growth becoming stagnant between 2025 to 2030.
Shell and TotalEnergies share first place with over 55,000 operational charging stations, with equally ambitious plans to expand their network in the upcoming years.
BP and Eni are just behind them, but still share a wide reach and have announced plans to more than double their charging network.
Not all big oil companies have decided to branch out into the EV charging space, with two companies specifically commenting that they will remain uninvolved with this technology: Exxon Mobile and Valero.
Shell and BP spent a fraction of their capex on clean energy investments and have signaled to the market that they are unlikely to pivot away from oil and gas any time soon. The following data helps gain perspective on how comparatively small the companies’ investments in sustainable technologies are, compared to fossil fuels.
Some of the major oil companies have been investing in EV charging infrastructure, with a total of 15 projects: 4 completed, 8 planned, and 3 under construction.

Scope

• Overview of CO2 emission rates by the transportation industry.
• Growth of EV sales as a measure to decarbonize the transportation industry.
• Growth of EV sales leads to a need to expand EV charging infrastructure.
• Major oil and gas companies invest in EV charging infrastructure to match this need.
• Major oil and gas companies invest in EV charging infrastructure to diversify their assets due to a forecast decrease in fuel demand in the upcoming decade.
• Analysis of which major oil companies are expanding in EV charging technologies and which are not.
• Overview of the role smart grids play in EV charging infrastructure.
• Overview of which major oil companies are investing in smart grids for EV charging infrastructure.

Reasons to Buy

• Identify the market trends of energy transition technologies within EVs, more specifically EV charging stations, as well as fuel demands in the upcoming decades.
• Develop market insight into current technology adoption rates within the oil and gas industry.
• Identify major oil and gas companies most active with investment and infrastructure expansion in EV charging technologies, as well as companies that are not expanding in this sector.