Introduction:
Shell, one of the world’s largest energy companies, has announced plans to shift its focus from gasoline stations to electric vehicle (EV) charging sites as part of its energy transition strategy. The company aims to divest around 500 retail locations per year in 2024 and 2025, reducing its retail footprint by 2.1%. Shell plans to invest more in public EV charging infrastructure in regions like China and Europe, where the EV market is more developed.
Shell’s decision to divest from gasoline stations and focus on EV charging sites is part of its larger energy transition strategy. The company aims to align its business with the growing demand for electric vehicles and reduce its carbon footprint. By upgrading its retail network to offer expanded EV charging and convenience services, Shell hopes to meet the changing needs of its customers.
<2> Expansion of EV Charging Infrastructure
In order to boost its charging business, Shell plans to find additional locations or expand the size of its current sites. The company will prioritize public charging infrastructure over home charging initiatives, as it believes that public charging will be more in demand among its customers. Shell aims to increase the number of charge points it operates from 54,000 to 200,000 by 2030, focusing on regions with high EV adoption rates.
<3> Focus on China and Europe Markets
Shell will be directing its efforts towards the Chinese and European markets, where EV adoption is higher and demand for public charging stations is growing. The company aims to capitalize on the opportunities in these regions by expanding its EV charging network and partnering with existing infrastructure providers. By increasing its presence in these markets, Shell hopes to establish itself as a key player in the global EV charging industry.
<4> Competitive Advantage and Profit Projections
Despite the closure of some retail sites, Shell believes that owning and operating physical locations gives it a competitive advantage in the EV charging business. The company’s convenience retail offering, which includes coffee, food, and other convenience items, complements its EV charging services and boosts profit projections. With an expected internal rate of return of 12% or higher, Shell is confident in the success of its EV charging business model.
<5> Industry Expert Perspectives
Industry experts like Nathan Niese from Boston Consulting Group believe that retail operators like Shell have the right strategy for entering the EV charging market. By leveraging existing infrastructure and customer traffic at retail locations, companies like Shell can create a successful business model for EV charging services. This approach allows them to capitalize on the growing demand for electric vehicles and establish a strong presence in the evolving energy landscape.