Is it the end of oil & gas as we know it? As BP and Shell invest heavily into battery and electric car charging businesses, are we entering a new age of electrification?
Electric car batteries and charging stations might not be the first thing to come to mind when thinking of oil & gas companies. Yet this association to electric vehicle (EV) tech is growing increasingly popular.
Personal transportation has gone through various stages of tech advancement, from animal-pulled buggies to the current engine – or oil – powered car. Let’s look back to 1886, when the first petrol-powered car came to be at the hands of Karl Benz. If that surname sounds familiar, it is the very same one found in Daimler-Benz, owner of the Mercedes car brand.
This marvel of engineering had, arguably, more impact on the global economy than any other product developed in the 20th century. In 1908, access to automobiles was made even easier with the mass production of Ford’s Model T. Fast-forward to present day – it’s unimaginable to think of everyday life without cars, but now we’re witnessing a new transition – from petrol and diesel engines to more sustainable electric vehicles.
BP has recently bought Chargemaster, UK’s largest charging network.. This is only the latest addition to a series of recent investments in the EV sector. BP isn’t the only company getting a foothold in EV tech. Royal Dutch Shell bought one of Europe’s largest EV-charging networks, NewMotion. Total acquired battery developers Saft back in 2016. In the meantime, Portuguese Galp has just been awarded exclusive rights to the national charging network, Mobi.E. You can see the latest valuation in BP shares here.
According to reports by analysts in Bank of America, it is forecast that half of globally sold cars will be electric by the early 2030s. To put this in perspective, there were around 2 million EVs sold in 2016, but that number is expected to grow to 58 million by 2038. This shift to electrification will impact global oil production, inevitably leading to a decline.
This diversification by European oil giants is part of a broader push into the EV supply chain and is fully contextualised. These companies have seen the proverbial writing on the wall and don’t intend to be left behind. From a logistics perspective, it makes sense to adapt the current fuel station network to include EV charging stations.
As a whole, the continued investment in electric vehicle technology can be seen as a predictable future-proofing move that will allow oil & gas to prosper in the new age of electrification.
This post is supported by Capital.com