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BP says fast charging could soon be more profitable than selling gas

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The European oil companies BP, Shell and Total have been buying up assets in the EV charging value chain, and some suspect there’s a sinister strategy—could the oil barons monopolize public charging in key markets, jack up the prices, and kill the electric car once and for all?

Maybe. But what if the companies find that selling electrons is more profitable than selling distilled dinosaurs? According to BP, that potentially game-changing milestone may not be far away.

Reuters reports that so far, EV charging has been a money-loser for BP and its rivals. BP doesn’t expect its charging division to turn a profit before 2025. However, on a margin basis, BP’s fast charging stations are getting close to delivering the same margins the company earns from pumping petrol.

“If I think about a tank of fuel versus a fast charge, we are nearing a place where the business fundamentals on the fast charge are better than they are on the fuel,” BP Head of Customers and Products Emma Delaney told Reuters. Rising demand for rapid chargers in Britain and Europe has already brought profit margins close to those for gas pumps.

In 2020, BP reported a gross margin for retail fuel sales of $3.5 billion. Consultancy Thunder Said Energy told Reuters that the typical retail margin on fuel at UK petrol stations is about 17 cents per gallon, which translates to an average of roughly 0.4 cents per kilowatt-hour. However, the real money is in the junk food customers buy while filling up.  BP’s retail business, which includes fuel sales and convenience stores, is highly profitable—the company’s Customers and Products division made $2.6 billion in net profit in the first nine months of 2021, around 17% of its total profit.

“Overall, we see a huge opportunity in fast charging for consumers and businesses, as well as fleet services more generally—that’s where we see the growth, and where we see the margins,” Delaney said.

BP and its European rivals have big plans for the EV charging space. BP currently operates around 11,000 charging points, and plans to expand that number to 70,000 by 2030. Shell, which recently opened a high-profile charging hub in central London, hopes to have 500,000 charging points globally by 2025.

Source: Reuters

This article was originally published by Chargedevs.com. Read the original article here.
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