By James Morra, Contributing Editor. Image courtesy of Noya Fields, Creative Commons
Royal Dutch Shell, one of the world’s largest oil and gas companies, is aiming to refuel electric cars as well. The company announced last week that it had bought New Motion, the owner of one of Europe’s largest networks of public electric vehicle charging stations.
NewMotion, based in the Netherlands, converts parking spots at office buildings or supermarkets into electric vehicle charging stations and oversees more than 30,000 charging points in Europe, where electric vehicles could account for a third of car sales by 2025. It has also built an app for locating its charging spots.
“This is a way of broadening our offer as we move through the energy transition,” Shell’s vice president of new fuels Matthew Tipper told CNNMoney. “It’s certainly a form of diversification.” Tipper added that Shell could benefit from pending regulations in countries like Norway and Germany, which have vowed to phase out internal combustion engines over the next few decades.
Sytse Zuidema, NewMotion’s chief executive, said the acquisition was a strong endorsement of its business, which also brokers access to 50,000 European charging points in addition to its own. He said in a statement that Shell is a “strong investor that supports our mission, enabling us to further expand across Europe at a time when the transition to electric vehicles is gathering pace.”
NewMotion’s purchase price was not disclosed, but the deal fits with Shell’s renewable energy strategy. The oil company currently invests around $200 million in renewables per year, and it plans to reach $1 billion annually by 2020. Last year, that would have represented over a fourth of its profit, which fell to $3.5 billion from $3.8 billion on low oil prices.
To prepare for growing electric vehicle sales, Shell’s new energies unit plans to install fast-charging stations at certain gas stations in Britain, the Philippines, Norway, and the Netherlands, where the government is weighing rules to whet sales of electric cars. It has also invested in the construction of offshore wind farms and installed solar panels at its gas stations.
Shell has not said what its plans are for NewMotion, which was founded in 2009. The firm has registered more than 100,000 customers for charge cards that allow them to pay at charging stations in Europe. In September, the firm also signed a deal to give customers of Total, an oil company based in France, access to its public charging network.
The deal stands in contrast to the poor track record of American oil giants like Chevron and ExxonMobil investing in renewable energy. In fact, in 2014, Chevron sold its renewables subsidiary, Chevron Energy Solutions, to OpTerra Energy Services after it failed to match the money-making power of its oil and gas business.
But electric vehicle could certainly have harsh consequences for the oil industry. That was evident in a report recently published by the investment banking firm Barclays, which concluded that sales of battery-powered cars could cut worldwide oil demand by 3.5 million barrels per day—the equivalent of Iran’s oil output—by 2025. By 2040, demand could plummet by 9 million barrels per day if electric vehicles account for a third of all cars.
In 2016, the number of public electric vehicle charging stations in the United States grew by a quarter to 16,412, with almost three outlets per station on average. Most of these chargers are not like Tesla’s fast superchargers, which can charge the firm’s larger batteries to 80% in around 40 minutes. The stations pump power into cars more slowly but are generally cheaper to install in homes or office buildings.
Charging infrastructure could expand as companies like General Motors and Ford make significant pushes into electric powertrains. Volvo has vowed that it would only build hybrid or electric cars starting in 2019. Tesla plans to expand its worldwide network of fast superchargers to 10,000, while companies like Qualcomm are experimenting with wireless charging pads that could be installed at intersections to charge cars at a red light.