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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Big Oil Wants A Piece Of The Electric Vehicle Pie

  • While some observers might see electric vehicles as a challenge to the dominance of the oil industry, oil majors see the technology as an opportunity to expand.
  • From investing in EV batteries and infrastructure to providing the vehicles with the fluids and greases necessary to help them run, big oil is betting on the EV future.
  • While the oil majors have no plans to stop producing oil, they recognize that the make up of the global energy mix will be changing in the future and that they need to be ready for it.

Although electric vehicles (EVs) may appear to be the last thing the oil and gas industry would desire, energy firms are investing heavily in EV technologies, not wanting to miss out on new energy transition opportunities. The likes of Shell, TotalEnergies, ExxonMobil, Equinor, and BP are all backing EV projects as they expand their portfolios to include non-traditional energy sectors.

In 2021, several international oil majors acquired EV-related companies and technologies while, at the same time, several car manufacturers announced plans for the rollout of new EV models and an eventual transition away from internal combustion engine (ICE) vehicles. The global electric car market is predicted to be worth over $354 billion by 2028, growing at a CAGR of 19%. And with the number of electric passenger vehicles increasing by an anticipated 60 million by 2026, it’s no wonder that energy companies are investing in the future of transport. 

In Europe, Shell has been just one of the oil majors to expand its EV charging network over the last year. Shell’s subsidiary, ubitricity – standing for ubiquitous electricity – is using innovative technologies to enhance access to EV charging stations by powering cars across cities through lamp posts. Shell’s public charging network, Shell Recharge, expects to have over 500,000 charging points globally by 2025, establishing locations across supermarkets, street-charging points, and EV hubs.

Shell is also leading by example by establishing an EV charging hub in London, replacing its petrol and diesel pumps with ultra-rapid 175kW charge points, which provide cars with around an 80 percent charge in 30 minutes. This is a global pilot for the energy firm, and the site in Fulham is constructed out of sustainable materials showing how the future of car fuelling could look.  

TotalEnergies has established a similar goal, to create 150,000 EV charge points across Europe by 2025. The oil major already has around 22,000 charge points in Greater Amsterdam, 3,000 in Antwerp, 1,700 in London, 2,300 in Paris, 1,500 in Singapore, and 11,000 in Wuhan. And in November 2021, it allocated over $210 million to fit around 150 of its motorway and expressway service stations with high-power charge points for electric vehicles across France.

In the U.S., ExxonMobil is gradually developing products to support the growing EV network. The firm launched its range of MovilEV fluids and greases aimed at allowing EVs to travel further between charges, extending equipment component life, and promoting safer operation. 

As well as EVs, Exxon is looking at the potential for low-carbon fuels for driving the future of transport. In April, Porsche announced a $75 million investment deal with HIF Global and partners, including Siemens Energy and ExxonMobil, for the development of eFuels – synthetic low-carbon fuels it aims to use across several of its vehicles. Exxon is supporting Porsche’s aim to achieve carbon neutrality by 2030 by investing in the car manufacturer’s use of hydrogen and carbon dioxide, using wind energy to develop its efuels. 

Related: EU In Talks With Alternative Suppliers As It Considers A Russian Oil Ban

Other energy majors are taking a different approach to the EV market by investing in raw materials for battery production. In November, Equinor announced its investment in Lithium de France for the development of batteries. Lithium de France joins net-zero carbon geothermal energy output with the extraction of lithium from hot brines located deep in the subsurface of the earth to provide the raw material required for the production of lithium batteries. 

Last year, Equinor also announced a $130-million investment in Solid Power, a U.S. firm developing all-solid-state batteries (ASSBs) for electric vehicles. The BMW Group and Ford have also partnered with Solid Power to acquire ASSBs for their new EV models. Equinor believes the development of ASSBs could provide lower-cost EV batteries to the market. 

But it’s BP that’s ahead of the pack when it comes to EVs, announcing a $1-billion investment in UK EV charging infrastructure this March. The investment will be rolled out over 10 years to triple its charging points by 2030. BP pulse, the company’s EV charging business, expects to add hundreds of new jobs to the market, as well as support the acceleration of the U.K.’s EV market through the development of rapid and ultra-fast chargers in key locations.

This April, BP sent EV stock soaring with the announcement of a multi-year contract with Tritium. Tritium will provide almost 1,000 chargers for the U.K., Australian, and New Zealand markets. Upon the announcement, the Nasdaq-listed company shares rose by over 12 percent. BP’s investment plan goes hand-in-hand with the U.K. government’s EV infrastructure strategy, which aims for a minimum of 300,000 public charge points by 2030.

Despite many of the world’s energy majors continuing to pump huge amounts of money into oil and gas operations, they also recognize the inevitability of an energy transition over the next decades. Several international players are now investing in the future of energy and transportation, making sure they diversify their portfolios to remain relevant in the years to come.

By Felicity Bradstock for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on May 01 2022 said:
    Big Oil isn’t worried about electric vehicles (EVs) because it knows that they will never prevail over internal combustion engines (ICEs) throughput the 21st century and far beyond. There are currently 2 bn ICEs on the roads around the world and are projected to hit 2.79 bn by 2050 compared with an estimated 11 million EVs or 0.55% on the roads.

    The first reason is that ICEs’ evolving technology is making them even more environmentally-friendlier than EVs particularly when taking into account the CO2 emissions involved in the manufacturing and decommissioning of lithium batteries.

    The second reason is that ICEs outperform EVs in price, range, performance, faster fuelling compared with battery charging and cost of running particularly with the sharp rises of electricity costs.

    Still, Big Oil is always looking for lucrative opportunities to diversify its investments and considers that investing in the EV industry is no different from investing in renewables particularly in an EV market projected to hit $354 bn by 2028.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • DoRight Deikins on May 01 2022 said:
    « Lithium de France joins net-zero carbon geothermal energy output with the extraction of lithium from hot brines located deep in the subsurface of the earth to provide the raw material required for the production of lithium batteries. »

    Well, OK, then! ¡Vaya pues!

Leave a comment




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