Driven by the goal of carbon neutrality, the world has embarked on a wave of vehicle electrification. In recent years, global commitments and actions to ban the sale of fuel vehicles have continued to increase.
In November 2020, the United Kingdom officially announced the “Green Industrial Revolution” plan, proposing to ban the sale of gasoline and diesel new cars by 2030, aiming to meet the country’s climate goal of net zero emissions.
In June 2022, after a long discussion and repeated consultations, the 27 EU countries finally reached a consensus on the “banning the sale of fuel vehicles”, agreeing to ban the sale of fuel vehicles in the EU from 2035.
On August 22, the Hainan Provincial Government issued the “Hainan Province Carbon Reaching Peak Implementation Plan”, which proposed that by 2030, the entire island will ban the sale of fuel vehicles. It became the first province in China to announce a ban on the sale of gasoline-powered vehicles.
On August 25, the California Air Resources Board voted to pass a new regulation, deciding to completely ban the sale of new fuel vehicles in California starting in 2035. At least 15 other states in the United States have also followed California’s vehicle emission standards before. California’s landmark decision may reshape the entire U.S. auto market.
With the delineation of the time line for the ban on the sale of fuel vehicles, the sales and penetration rate of new energy vehicles will continue to rise in the future.
After decades of making easy money, as the era of the internal combustion engine gradually comes to an end, oil giants are facing unprecedented changes.
For these behemoths, the time window is actually not sufficient to switch from serving fuel vehicles to serving electric vehicles. They must subvert themselves and find the next point of investment as soon as possible. Under the dual drive of the market and their own low-carbon transformation needs, oil giants are accelerating their “landing” on the electric vehicle charging track.
01 Accelerating the electrification of automobiles, the global investment in charging piles needs 1.6 trillion US dollars
In recent years, my country’s new energy vehicle industry has developed vigorously, and the scale of production and sales has continued to grow rapidly. According to statistics from relevant departments, as of June this year, the number of new energy vehicles in the country has exceeded 10 million. According to relevant national plans and forecasts, by 2025, the number of new energy vehicles in the country will exceed 25 million; by 2030, it will reach 80 million.
On October 11, the Passenger Car Association announced the national passenger car market data for September. Data show that in September, the retail penetration rate of new energy vehicles exceeded the 30% mark for the first time, reaching 31.8%.
From the perspective of industry insiders, once this value is exceeded, it will inevitably have a huge impact on fuel vehicles. Therefore, penetration rate, as an extremely important market indicator, has always been highly valued by major car companies.
With the rapid development of the electric vehicle market in recent years and the rapid increase in the number of ownership, the demand for electric vehicle charging continues to increase.
As of the end of 2021, there are 7.84 million new energy vehicles and 2.617 million charging piles in the country, with a vehicle-to-pile ratio of 3:1. There is still a large gap.
The issue of electric vehicle charging is considered to be the “last mile” of electric vehicle promotion and is crucial to the promotion and development of electric vehicles. According to the Ministry of Industry and Information Technology’s “New Energy Vehicle Industry Development Plan (2021-2035)”, the target of new energy vehicle sales in 2025 will reach 25% of new car sales. CCID Consulting predicts that by 2030, the number of new energy vehicles in China will reach 64.2 million. According to the construction goal of a vehicle-to-pillar ratio of 1:1, there will still be a gap of about 63 million in the construction of charging piles in China in the next 10 years. According to Kaiyuan Securities It is speculated that my country will form a charging pile infrastructure construction market of 1025.3 billion.
In addition to China, the overseas charging pile market is also in full swing. According to research by Bloomberg New Energy Finance, if net zero emissions are to be achieved by 2050, it is expected that the cumulative global investment in charging stations will be as high as US$1.6 trillion. Therefore, with the rapid increase in sales of new energy vehicles, the overseas charging pile market has also entered an outbreak period.
With 130 million electric vehicles on the road in Europe by 2035, according to a joint report by Ernst & Young and the European Power Industry Trade Association $72 billion to install 56 million home chargers.
In the U.S., in February 2022, the Biden administration unveiled a plan to allocate nearly $5 billion over five years to build thousands of electric vehicle charging stations, requiring that U.S. states should prioritize investing in interstate highways, with every There should be charging facilities within 50 miles, and at least 4 charging piles should be arranged at each charging station, and 80% of the cost of charging infrastructure should be borne by the federal government.
02 Oil giants accelerate the layout of charging business
With the increasing sales and penetration rate of new energy vehicles, in the process of the gradual end of the internal combustion engine era, oil giants, driven by the market and their own low-carbon transformation needs, are accelerating the “landing of the beach” on the electric vehicle charging track. “.
In fact, oil companies have first-mover advantages in the deployment of charging, battery swapping and other service markets. They have incomparable advantages in terms of land use, electricity consumption, user distance, etc., and have a huge gas station system. The site is the best upgrade and transformation. place.
On August 1, 2022, the first “photovoltaic charging and inspection” energy-enhancing station project jointly built by Sinopec Fujian Petroleum and CATL in Fujian was completed and put into operation at the gas station on Mindong Road, Ningde, Fujian. The station is a comprehensive energy service-type power station integrating photovoltaic power generation, fast charging of new energy vehicles, battery detection and other advanced technologies.
On August 30, Sinopec’s first community super charging station in China, Lotus Super Charging Station, was completed and put into use in Longyan City, Fujian Province. The planned area of the project is about 4,800 square meters. It can charge 24 vehicles at the same time. It integrates refueling, charging, photovoltaics, and rest. It can fill an ordinary family car with an endurance of about 400 kilometers in the fastest 25 minutes. The estimated average annual charging capacity About 3 million kWh, helping energy green and low-carbon transformation.
And this is not the first time Sinopec has deployed a new energy vehicle charging and swapping business. As early as April 2021, Sinopec announced that it will cooperate with Weilai to build 5,000 Weilai power stations in Sinopec’s national network by 2025.
According to the plan, Sinopec is making every effort to build the world’s leading clean energy chemical company, accelerating the construction of “oil, gas and hydrogen power service” comprehensive refueling stations. photovoltaic power generation site.
Another PetroChina of “Two Barrels of Oil” is not far behind. In November 2021, the first second-generation replacement power station in cooperation with Weilai was launched in Shaanxi. PetroChina said that the company will further increase investment in charging and swapping business based on operating vehicles such as service taxis and online car-hailing, and gradually achieve full coverage of all passenger vehicles. By the end of the “14th Five-Year Plan” period, the company will build more than 1,000 charging and swapping stations, and upgrade and build a comprehensive energy service network that is “rechargeable and rechargeable”.
Coincidentally, in recent years, the international oil giants have also accelerated the pace of the layout of the charging track.
In terms of charging infrastructure layout, BP (British Petroleum) is undoubtedly the leader. In March, BP announced a $1 billion investment in the UK’s electric vehicle charging infrastructure. The investment will be rolled out over 10 years, tripling its charging points by 2030.
BP’s electric vehicle charging business, BP pulse, is expected to add hundreds of new jobs to the market and support the acceleration of the UK electric vehicle market.
In April, BP announced a multi-year contract with Tritium, which will supply nearly 1,000 chargers to the UK, Australia and New Zealand markets. With this agreement signed, BP plans to expand its charging network to 70,000 fast chargers by 2030.
On August 1, BP and Didi Chuxing jointly announced that the two parties will establish a joint venture to build a network of new energy vehicle charging stations in China. According to the introduction of the two parties, the first charging station of BP and Didi is currently equipped with 10 fast charging piles of 60-120KW, which have been put into operation in Guangzhou, Guangdong Province. This will be the first charging station transferred to the joint venture. Since then, the joint venture will rapidly expand to build and operate more charging networks.
On September 27, BP’s electric vehicle charging business, BP Pulse, announced that it signed a memorandum of understanding with car rental giant Hertz to establish a network of charging piles in the United States and install thousands of charging piles at Hertz sites across the United States. The companies expect to have around 3,000 chargers in operation at Hertz sites across the U.S. by the end of the year.
Shell was also one of the oil majors to expand its electric vehicle charging network last year. Shell subsidiary ubitricity is using innovative technology to power cars in cities through lampposts, increasing EV access to charging stations. Shell’s public charging network, Shell Recharge, is expected to have more than 500,000 charging points globally by 2025, establishing locations in supermarkets, street charging points and EV hubs.
Shell is also leading by example by setting up an electric vehicle charging centre in London, replacing its petrol and diesel pumps with ultra-fast 175kW charging points that can charge cars around 80% in 30 minutes.
In addition, Shell is also actively expanding its charging network in Asia. On August 1, the first charging and replacement station jointly developed by NIO and Shell, Xiamen Tong’an Shell Station, was officially launched. According to the agreement, NIO and Shell will jointly promote the construction and operation of charging and swapping facilities. In India, Shell also plans to build more than 10,000 electric vehicle (EV) charging points by 2030.
In addition, Total Energy and Eni are also promoting their charging services in the country and in Europe. Total Energy aims to have 150,000 electric vehicle charging points in Europe by 2025. In November 2021, it allocated more than $210 million to equip around 150 motorways and motorway service stations across France with high-power charging points for electric vehicles.
Eni signed an agreement in August 2021 to acquire 100% of Be Power SpA, whose subsidiary Be Charge is the second largest operator in Italy with more than 5,000 electric vehicle charging points on public land.
03 Future: The profitability of charging stations is close to that of gas stations?
At present, there are three main factors that affect the profitability of charging stations: charging service fee, basic electricity fee and charging pile utilization rate, while the service fee and basic electricity fee are generally relatively fixed, and the guiding prices of various local departments are mainly implemented.
Therefore, the utilization rate of charging piles has become the most important factor in considering profitability. According to data from Everbright Securities, the break-even point utilization rate of charging stations is around 8%. However, according to the data disclosed by Wang Yao of the China Automobile Association, as of the third quarter of last year, the overall utilization rate of the domestic charging energy industry was only about 3%-5%, far from reaching the balance point threshold.
The same is true abroad, where the EV charging business has been a money-losing project for Shell and BP as they invest heavily in their expansion. In other words, from a global perspective, it is still too early for the charging station to talk about profitability.
However, the continuous overweight of various types of capital, including oil giants, on the charging track is not only the pursuit of current interests, but also the advance layout of future interests.
One of the goals of the oil majors’ rapid push for electric vehicle charging networks is to keep the oil company’s gas stations and convenience stores strong. But in the future, the charging business and the additional business that comes with the passenger flow will bring profits.
Adrian Del Maestro, director of Strategy&, the consulting arm of accounting firm PricewaterhouseCoopers, said: “Historically, many operators have struggled to make money from electric vehicle charging, which is like the industry’s best-kept secret. Including oil Charge point operators, including giants, have been grabbing land, buying real estate and building infrastructure in hopes of generating growth revenue in the future.”
BP’s network of “BP pulse” fast battery charging stations in the U.K. is approaching the level of profitability they make from petrol stations in terms of profit margins, according to a related Reuters article. Strong and growing demand for fast battery chargers in the UK and Europe has pushed profit margins close to those of traditional petrol refills, BP’s customer and product chief told Reuters.
The chief didn’t say exactly when BP expects profits from EV charging to surpass those from conventional fuels, but the company did report that its electricity sales for EV charging will only be in the second to third quarters of 2021. increased by 45%.
Oil companies lay out electric vehicle charging tracks, which have incomparable advantages in terms of land use, electricity consumption, user distance, etc. Especially on highways, oil companies with monopoly positions have greater advantages in providing charging services, and may form refueling in the future. A new pattern in which the station and the charging pile are combined into one. In the future, once the EV charging business becomes more lucrative than adding gasoline to an internal combustion engine, it will mark a major inflection point for EVs and oil majors.
