Some negative comments below, but this is good news. This is the sign that the electric cars on the streets have a critical mass big enough for Shell to invest. The second positive outcome is that if they are directly involved in the electric cars business, they will be one less company trying to stop the greener technologies.
With more and more electric cars on the roads, the demand for the gas stations will decrease and some of them will close. Finding a gas station will become more difficult. It seems that most of the other owners are not thinking long term what will be the effect on their business.
We will see a lot from shat Shell does next. If they invest and expand the network, they can be the dominant player. That will show they're transitioning to the new era etc.
If they do nothing and let the network stagnate, that will delay Electric car introduction in the UK a lot.
Kodak famously developed the digital camera but couldn't bring themselves to cannibalise their own market. Will Shell now have the balls to do that or will they take the safer option and delay?
I think there will be greater interest from Shell here because for a while now the margins from operating gas stations largely comes from the associated convenience stores. With the longer charging times (relative to filling up a tank of petrol) customers will spend more at this convenience stores.
It would be interesting to see what they can make of the market. 30min of charging time is a lot more opportunity to sell food, drinks, entertainment, etc. I wondered about a Michelin Star equivilent model: places you could stop for 30-60min, get food, be entertained. I could even see a model like a gym: pay a monthly membership stop off 2-3 times a week, charge, get fit.
It's like the opposite of fast food: I don't want to be in and out. I want to be here for at least 30min. I want comfort. I want entertainment.
One thing that could be driving this is the rise of Environmental, Social, and Governance (ESG) investing in the UK, and across the EU, due to regulatory changes.
I wouldn't be surprised if Shell's management are aware of ESG pressure from institutional investors.
I think this is very different from the Kodak situation. They are responding to market forces - the electric cars. The charging stations will provide a new revenue stream for them and it help them to transition.
We'll see I guess. Personally, I think it would be brave of shell to trade petrochemicals for the electric hookup market. They'd be a middle man, in a competitive market, with no "moat" protecting them. Kodak could at least have sat on their patents for a while.
I agree. Political opposition by fossil-fuel companies to renewable energy and everything climate change is a problem. But aligning their interests in this way is a positive step that may reduce or eliminate that opposition. Incentive alignment matters.
I think Shell has decided that it is in the energy business, no matter the source of that energy. Surely its executives can remember seemingly invincible incumbents in other industries that failed to cannibalize their products. That or they are taking the EU directive to phase out new petrol/diesel car engines in 2030 (ish) seriously.
Pretty much Shell is an European energy company, and due to that they are looking at climate change, and wanting to lead the transition. Mostly because they see that is the way the world is going to go, and they want to be in front and are being pretty open about it. They have been partnering with environmental organisations to increase environmental regulations in the US, and having made early investments, will likely come out ahead of Exxon and others if / when regulations get tightened.
Very unlikely. All oil companies see the writing on the wall for gasoline powered daily consumer vehicles especially in urbanized areas and that electric vehicles sometime over next 5 to 10 years will tip over as significantly more economically viable. So everyone is trying something or the other to get ahead of the trend. Eg middle east and norway, are trying to funnel their oil money into diversified holdings. Makes sense Shell will too
I'm less of an optimist, I'm betting theyre taking over to slow its growth while keeping the back door open for when they need to start focusing on it.
Cautiously optimistic that they're doing it in order to maintain their stranglehold on transportation energy networks (what a thing to be optimistic about!) and not in effort to dismantle it aka auto companies vs light rail / trolleys / etc in the US back in the day.
You can trivially find the sort of investments and projects Shell is working towards...they are heavily involved in offshore wind for electricity and green hydrogen. That they would be buying up EV charging in order to dismantle it can be dismissed outright.
Yup.... shell (via subsidiary newmotion.com) just changed their pricing model in the Netherlands. From variable pricing per charging point (most cheaper than 35ct), they now have a fixed 35ct /kwh overall.
In practice it means my charging went from 18 or 25ct to 35ct/kwh. Lets just say I haven't used shell-recharge/newmotion since they implemented this last month.
Do you have a recommendation for another “provider”. I do like the maturity of the new motion app and most chargers i frequent were 32-35ct/kWh already.
I wonder what people now pay for charging for my NewMotion charger at home. That used to be controlled by my price. If I set that to 10ct/kWh, will they make a 25ct margin?
I graduated with a degree in mechanical engineering. One of the projects available to me was the Shell Eco Car marathon[0] challenge, where they sponsored teams and gave prizes to contest winners (I didn't choose that as my project, sadly).
They've been active in green/alternative energy research for decades and have made some huge bets on hydrogen. Sure, they're in oil and gas which makes them somewhat inherently slimy, but as far as I can tell they're the energy company making the best efforts to stop (or greatly reduce) their production and extraction of fossil fuels, and TFA only reinforces my opinion on that.
I think they are doing it for the right reasons. I think Shell has been working on next-gen fuels/tech for a while and even published a shareholder plan concerning their move to renewables.
If they do dismantle it, I don't see how they could avoid antitrust issues.
Maybe oil companies can survive EV. If you're selling to the same customers for the same purpose, it's a sustaining (not disruptive) technology, according to Christensen.
Though he evaluated the first iPhone as non-disruptive, so IDK.
In all fairness there is a case to be made the first iPhone was non-disruptive. It would say the real disruptive technology was the app store not the phone itself. The first iPhone didn't have the app store.
Many people underestimated the first iPhone. It has all the capabilities to be a disruptive technology. The appstore was missing only due to timing of the release (this is my assumption, haven't checked out).
Also Christensen book has been critiqued many times especially about the inevitability of the disruptive technology [1].
>One of those details Steve’s initial opinion on third-party apps for the iPhone. In the beginning, Steve was opposed to third-party apps, and wanted developers to create web apps that could be used through the device’s mobile Safari web browser. According to Apple board member, Art Levinson, “Jobs at first quashed the discussion” of allowing apps on the company’s debut smartphone.
I absolutely underestimated the iPhone, and the only reason I didn’t underestimate the Apple Watch was that I had learned to trust Apple’s judgement over my own — I still don’t really get what it is about the Watch that makes it such a success.
Shell see's the writing on the wall. Fossil fuel cars are going to no longer exist, and when that starts to happen, what you'll see is an over abundance of fuel supply pushing profits down.
All oil producers should be considering this sort of forward thinking move. Particularly with increasing regulations against fossil fuel cars in some states and all the EU, it makes a LOT of sense to start to make an exit plan like this.
There have been a lot of moves like this by the big oil companies lately. It reminds me of a Stephen King short story called "The Jaunt."
The story is about the world after man has invented teleportation. Aside from being a handy way for the mafia to dispose of bodies, it also made burning dinosaurs unnecessary for transportation. So all of the big oil companies went into water. They became Shell Oil and Water, Exxon Oil and Water, British Fluids, etc.
Charging infrastructure in the UK is so bad - I have so many terrible apps on my phone to activate the many brands of different charging points. So I'm very happy to see consolidation if that's going to make charging more reliable.
The mystery for me - why don't they all work on contactless payment? (like Instavolt does) That way, I don't need an app, account, tracking or anything else - just tap my card and start charging.
It really shouldn't even need that, it should be what Tesla does with their supercharger network. Plug in your car, it does a tap/pay style negotiation, start charging.
CCS just adopted a payment standard based on that and I hope it ends up killing the need to pull out your wallet to charge.
>It really shouldn't even need that, it should be what Tesla does with their supercharger network. Plug in your car, it does a tap/pay style negotiation, start charging.
That's a lot simpler when you only have a few cars on the road and standardized charging hardware. But this will get figured out in time. I mean, look at fuel pumps.
Mercedes does that. If you buy their EQC you can use any charging point in the UK and start charging through the Mercedes ME app, it will be billed to Mercedes and then they send you an invoice later. Apparently it works really well but obviously it requires Mercedes to maintain hundreds of different contracts with all these companies
No, but you pay for those by tapping a card on the pump or going into the shop. The suggestion here was some sort of magic communication between the car and charger, which would require either the car to be a payment instrument itself (obvious security issues) or for either the car vendor or car owner to have contracts with a whole bunch of providers.
I don't see the obvious problems with the car paying. It can do exactly what google and apple pay does. Issue a one use token for payment to the charging system which is ultimately redeemed with a credit card purchase/money transfer. The only needed system is for either car manufacturers to setup their payment systems, or for them to rely on some 3rd party to provide the same system. There's already an android auto and apple auto so I'd imagine google or apple would both leap at the opportunity to handle payment for them.
The only way with obvious problems, to me, is a system that requires you to pull out a credit card. That is wide open for card skimmers.
This is one of the more minor issues that puts me off getting an electric car at the moment. Why do I have to sign up for an account and download an app to charge my car? I can see the app being useful for being alerted when it's done, but that should be an optional thing.
It needs to be possible to just turn up, swipe your card and start charging (with some ability to limit how much you charge up). This needs to be as close to filling up at a petrol station as possible.
There are many happy use cases for an electric car in the UK, but most of them involve never planning to charge en route. e.g. my family's main car is a 24kWh Leaf, and did 10,000 miles a year (pre pandemic) without leaving our city's outer ring road.
Yeah. I definitely want to get an electric at some point, but at the moment it's not practical for us (mostly the lack of off-street parking where we live).
If we could charge up at home I think we'd only ever need to charge on route about three or four times a year, when going on holiday. If the car rental industry was a bit more consumer friendly (they seem mostly designed around business use), renting for the holidays would be very appealing.
It will be interesting to see if campsites will let you charge up from their electric hookups. I can see that being a thing in the future.
Royal Dutch Shell has agreed to buy Ubitricity, owner of the largest public charging network for electric vehicles in the UK
I've been driving EVs in the UK for 5 years or so and I've never heard of Ubitricity so is this bullshit, or do Ubitricity own someone lower down like ChargeYourCar or something like that?
edit: Ah here we go, seems like they might be big in London
ubitricity's approach is slightly unusual, compared to the typical charging networks, as it uses a lamppost or bollard, equipped with Type 2 AC charging sockets. Because there is already an electricity connection, the company reduces the installation cost and time.
It's quite interesting also from EV drivers' perspective (especially if they don't have their own parking space), as there are now streets in London where every lamppost has been retrofitted with an ubitricity charging point.
The majority of lamp post chargers in London are ubitricity.
Of the multiple networks I've used, these are the cheapest and most reliable to use... pricing very close to domestic electric rates, and it's up to you to secure your parking (which is a good thing as something like Source London includes a parking fee even when a CPZ is not in action).
The only issue with ubitricity to date is that whether or not they're in your area depends on your council being willing to work with them. Shell would help this a lot.
In the UK the proportion of profit from petrol sales vs forecourt stores is already dropping fast. The petrol retailers are all increasing their forecourt stores with tie ups with retailers. 50% of some petrol station visits don’t involve petrol sales at all
With the increased time to ‘fill up’ with electricity it would make this more appealing to the companies
Tesla has already built a handful of entire mall complexes around a core of rapid chargers. I guess the model is you plug in and then go choose from one of the immediate destinations to spend your 20 minutes.
It's inevitable that bigEnergy will dominate any EV charging infrastructure and pricing. Governments collect huge taxes from fuel for travel, some of which they use to maintain roads.
Going from a 3 minute fill up of gasoline or diesel to a 20 minute minimum recharge and having to go to a shopping mall is a currently regressive and inconvenient step. Hopefully as battery and grid tech improves this will become less inconvenient.
I don't understand why its inevitable that big energy will dominate. There's nothing particularly global about our electricity supply that requires it to be as dominated by oligopoly the way that Gasoline and Crude Oil could be.
I do expect that the future looks a lot more like C-Stores with charging stations than some of the current stations though. A lot of new Tesla installs are going in at gas stations, but they are the newer stations (Sheetz, Wawa, Parkers) rather than stations owned directly by oil companies.
I'm not sure what's regressive and inconvenient about a shopping mall. Most have food courts, and tbh, I think the ideal charge stop would be one near a food hall.
I don't know anything specific about this purchase, but this doesn't surprise me a ton in light of Shell's partnership with the impact-oriented Unreasonable Group. [1] I know the Unreasonable team through my work with them on literacy issues, and they are super dedicated to making a positive impact in the world. When they announced their partnership with Shell UK, the CEO sent out an email explaining to the community why they are working with such an unlikely partner.
Hopefully this is another data point that trends in the same direction.
Shell has been very open in the last few years that they see themselves as an "energy" company and that they don't care very much if the energy comes from fossil fuels or from renewables, as long as consumers buy it from Shell. They've seen the writing on the wall and are moving to where the money will be in the future. Apart from this acquisition, they have also invested in wind parks (their offshore expertise is quite handy apparently), hydrogen electrolysers for damping renewable production peaks and several other large and capital intensive projects that they are very well positioned to take on.
The main concern seems to be whether they can make the cultural switch in management as there are quite a few "old hands" in middle management that are quite attached to the fossil fuel sector that they grew up with. On the other hand, the CEO and board seem fully on board so we'll see how it plays out. In the coming weeks with the annual report they are expected to present a new strategy document for the coming decade with more details on how they plan to go about it. This is a company that has tens of billions per year to invest in new energy projects, as well as some top tier talent. It'll be interesting to see what they come up with.
While this is a sensible strategy, I do retain some cynicism. "Have been very open about" can sometimes mean "our PR has been very good" while they privately lobby against anything renewable. Hopefully we can take what they're saying at face value though.
Cynicism is almost always a good idea. Companies like Shell (83k employees in 2019 according to wikipedia) are large enough that they can simultaneously have departments trying to diversify into renewables and also have different departments lobbying against renewables. Their willingness to invest billions of dollars in renewables and the surrounding infrastructure does make me hopeful though.
Shell is in the middle of a restructure right now. From the top you can see many old Oil/Gas drilling/refining roles have been removed.
Shell appear to be becoming more of an energy trading / retail organisation, as they view fossil fuels are being commodities that they can trade for and sell at a higher price with their brand name.
>The main concern seems to be whether they can make the cultural switch in management as there are quite a few "old hands" in middle management that are quite attached to the fossil fuel sector that they grew up with.
Shell has recently made some very significant restructuring and reorganizing moves so I wonder how true this still is.
I always wonder why other companies did not take on this approach. When you dig up oil you get natural gas too. But oil and natural gas companies are seen in competition.
Like wise when you exhaust an oil gas field you get free land for solar and wind.
Mineral rights leases, I do not believe, are not extended to solar and wind in the USA. In the USA you don't necessarily own the land you are extracting resources from.
You may like to read up on Orsted (formerly DONG). Formerly a major oil & coal energy producer, now one of the largest global players in green energy. It continues to be a remarkably successful transition.
Royal Dutch Shell has agreed to buy Ubitricity, owner of the largest public charging network for electric vehicles in the UK, as the oil major expands its presence along the power supply chain.
Shell said on Monday it would buy 100 per cent of the company for an undisclosed amount. Ubitricity, founded in Germany, is a leading European provider of on-street charging for electric vehicles.
The company, which integrates electric car charging into street infrastructure such as lamp posts, has more than 2,700 charge points in the UK, giving it a market share of 13 per cent.
Shell said the acquisition would help it expand into on-street charging. It already has more than 1,000 fast and ultrafast charging points at 430 Shell retail stations and a greater number including those owned by partners and affiliates at forecourts and motorway service stations.
Subject to regulatory approval, the deal is expected to close later this year.
Street charging is expected to expand rapidly as customers who lack private driveways and those that wish to charge their vehicles overnight seek greater options.
Istvan Kapitany, who heads Shell’s mobility business, said: “Working with local authorities, we want to support the growing number of Shell customers who want to switch to an [electric vehicle] by making it as convenient as possible for them.”
Like peers such as Total and Repsol, Shell has been expanding along the electricity supply chain in recent years as it looks to build a business that will be resilient through an energy transition towards cleaner fuels.
Investors and environmentalists have demanded that oil companies take greater responsibility for their role in enabling climate change, forcing Europe’s energy majors to make new pledges for cleaning up their businesses.
Shell, like BP and other oil groups, said last year it would become a net-zero emissions business. It is expected to detail its plan for how to get there next month at its strategy update.
While top leaders at the company plan to accelerate spending into cleaner businesses, they are also wary of abandoning lucrative legacy hydrocarbon divisions too soon.
For example, while electric vehicle adoption is accelerating, the fleet is still dwarfed by those with traditional engines. Demand for petrol and diesel is expected to remain robust for decades to come.
While Shell’s leadership insists it has been on the right path, some executives have said it is not moving fast enough given the rapidly changing demands of the public, investors and climate activists.
The pressure to take climate action has grown over the past year, even as the coronavirus pandemic battered the balance sheets of international oil players.
Lockdowns and travel bans dramatically cut demand for oil and led to a collapse in oil prices, hitting earnings.
Shell cut its dividend for the first time since the second world war, slashed spending by billions of dollars and said it would cut 9,000 jobs as part of a major restructuring.
The company is expected to announce its fourth-quarter results next week.
Highly recommend the book "Rentier Capitalism" as a follow up to "Capital in the 21st Century".
Royal Dutch Shell receives a detailed study as a resource rentier, and be warned that Shell is basically just a holding company that knows how to sweat an asset. Makes total sense that they would be prepared to acquire a charging network.
Anyone know the purchase price? Hard to know what to think of this otherwise. Is this a defensive acquisition, to protect a fragile Shell charging business? Or is this speculative, where they want to pump in $ to accelerate and dominate? Will Ubicitry function as an R&D/experiments arm, or actual LoB?
I believe it will be a real LoB intended for growth. Shell has made it clear in shareholder communications that they will greatly expand thier renewables because they see that as the future.
Great! Here in the UK their charging stations seem to be among the most reliable, coupled with the fact that you can actually pay with a card at the charging station, no stupid accounts/fobs needed. Just plug in, tap your card on the side, done. Easier than filling with petrol.
That's acatually good to know. As I mentioned in another comment, faffing around with charging network accounts is one of the more minor issues that puts me off an electric car at the moment.
(We don't have off-street parking, that's our major blocker at the moment, and that our car is only a few years old).
I think this is a good thing. About 7 years Shell bought First Utility - a 100% renewable energy company. It’s rebranded to Shell Energy now, but still 100% renewable.
I imagine they just want to diversify outside of fossil fuels because they see the writing on the wall.
It makes sense (for Shell) because a lot of streets and buildings in the UK aren't charge-point friendly. Add to that the outdated electrical infrastructure in many places: any more power demand would necessitate upgrading wiring from substations to streets.
What the real problem is though is that successive Governments have failed to properly invest in the right type of power stations, and I'm not sure if renewables could handle the extra projected load. See: https://www.gridwatch.templar.co.uk/
The National Grid has modelled this and thinks it'll be fine. It's had to issue a few media corrections because apparently the story that electric cars will melt the grid is just too clickbaity to miss out on.
Renewables and electric vehicles are fairly synergistic, particularly wind in the UK.
Many lampposts in London have been converted into charging points; you increasingly see electric black cabs parked up and plugged in.
I agree that some streets aren't friendly for parked cars, but the situation is better than e.g. old Roman cities on the continent, where you do see tiny city cars alongside scooters etc.
Domestic power load already fluctuates a lot and the grid handles that fine. Most people are not going to need to recharge fully every day and the load could be spread throughout the night.
The article is paywalled, so I'm not sure if they cover this. I don't love a company owning two competing verticals when those verticals are impacted by network effects. Shell's gas business becomes less valuable the more they build out their EV business and vice versa. It creates a big potential conflict. What are the odds that a company like Shell would make the the decision that benefits society and prioritizes the EV business over their fossil fuel business?
I understand your concern. On the other hand though, if fossil fuel based business is going to shrink massively over the next few decades and their entire business resolves around this, switching while carrying across their brand and relevant expertise seems like a perfectly sensible thing for their shareholders to do.
It isn't about what is sensible for the business. It is about what is sensible for society. These fossil fuel companies have routinely put their own short term financial interests above that of the planet. Maybe they have learned their lesson and will fully commit to a cleaner future. Maybe they will drag their feet on their EV business in order to give their gasoline business a few more great years. A majority of the legacy players in this space have a history of ignoring or actively slowing down the transition from ICE vehicles to EVs. If I was the UK government, I would need some guarantee that Shell wouldn't do this before I allowed this purchase to go through.
> What are the odds that a company like Shell would make the the decision that benefits society and prioritizes the EV business over their fossil fuel business?
As certain as anything in business in the UK, since the UK government has a timeline to ban the sale of new fossil fuel powered vehicles, and no such plan to ban EVs.
Hmm...I'm not sure you're 100% correct there. It seems likely that the long term goal will be to switch from private ownership of cars, EV or not, and switch to automated roaming vehicles like personal electric taxi/buses wherever possible. Cities cannot absorb many more vehicles? It seems somewhat similar to CD ownership vs streaming?
I'm 100% certain the UK government's actual plan to force all new cars to be electric in a few year's time is more of an influence on a fossil fuel supplier acquiring UK car charging networks than your own speculation about a post-car world. Sure, there's no certainty the world won't be restructured to allow everybody to pool AGI taxis, but that's not really a factor in Shell backing EVs against the petroleum it made its fortune with.
If they're prevented from entering a competing vertical (electric charging), doesn't that guarantee a conflict? They'd be putting everything into protecting their existing vertical (oil and gas).
Nope; the writing has been on the wall for fossil fuels for decades, because they KNOW it's a finite resource. The way things are going nowadays though, it's more likely fossil fuels will simply stop being mainstream; for ALL parties involved, it's the more economic option.
I mean granted, there's pretty big profit margins on fuel, but with electric they can get rid of the underground tanks, the trucks, the safety checks, the fire hazard, etc.
So whereas the oil producing countries have invested their incredible amounts of oil money into real estate, companies like Shell are investing in charging points. Because they're good, long-term investments, they don't need much attention, they can be placed anywhere, and every charge session is a bit of profit for whoever owns them.
I mean I'm confident Tesla's long-term strategy isn't so much producing cars - since the established car companies are going to overtake them in that regard, if they haven't already - but infrastructure, supplies, IP and raw materials (charging stations, batteries, technology and lithium / cobalt / intermediate goods, and big projects for power companies like grid-level batteries).
They already bought another electric vehicle charging company an EMSP which connects the users with the companies that have the charging stations. That seems to be going ok and the thing with the UK is the largest one owns like 90% of the stations so they basically have a stranglehold on the UK market. Also, I know one of their main (maybe largest) competitiors are running themselves into the ground.
> [in the UK] the largest one owns like 90% of the stations
This article says that Ubitricity has the largest network of electric charging points. I can't reconcile that with your statement about 90%. Which provider were you referring to there?
I can't remember the name, I've just sat in a bunch of business meetings where they kept saying the problem with the UK was we couldn't get access to the market because one company, whose name got mentioned a few times but not enough to remember, had 90% and wouldn't work with us or anyone because they make more money without partnerships. It could be the 90% are connected to a hub and the hub won't work with us. We have direct connections with CPOs (Charing Point Operators) and then we have connections with hubs, most of our CPOs come via a hub like Hubject.
Shell has stated their plans to become the world's biggest supplier of electricity; running this as agoing concern seems in line with their new strategy.
I dunno, clinging to gas seems to have been pretty lucrative for the last years/decades,.even if the switch is inevitable (if only bc gas is a finite resource). If the big oil companies had been really motivated to push alternative vehicles I'm sure we'd be a lot closer to 100% off petroleum by now.
Yep. The UK government's current plan is to ban sales of new petrol and diesel powered cars from 2030. Running and expanding charging networks keeps Shell relevant over the coming decades, acquiring them in the hope of stalling them would just be setting fire to money.
Oh brother, can anything please people? These gigantic corporations are trying to diversify away from oil. That is what we want. They already own a ton of real-estate and infrastructure; who else should run the "fuelling" stations?
Of course anyone could install charging points. It is much easier than running a petrol station and could be complimentary to a lot of other businesses.
The opportunity for an investor is finding low hanging fruit. Or securing a higher price for electricity you intend to generate.
They could have done this decades ago, and not resisted the end of fossil fuels while profiting from what they knew was bad for the planet.
It’s great that they are finally investing heavily in renewables now they they are popular and economical, but if you expect me to cheer for the oil company, I’m expecting them to lead the charge to improve rather than follow the leaders before their business is toxic.
