* BP focusing on fast battery chargers, executives says
* Fast chargers almost as profitable as petrol filling
* BP and rivals targeting big growth in EV charging
By Ron Bousso
LONDON, Jan 14 (Reuters) - BP says its fast electric vehicle
chargers are on the cusp of becoming more profitable than
filling up a petrol car.
The milestone will mark a significant moment for BP which
wants to shift away from oil and expand operations in power
markets and around electric vehicles (EV).
EV charging has for years been a loss-making business as a
whole for BP and rivals as they invest heavily in its expansion.
The division is not expected to turn profitable before 2025 but
on a margin basis, BP's fast battery charging points, which can
replenish a battery within minutes, are nearing levels they see
from filling up with petrol.
"If I think about a tank of fuel versus a fast charge, we
are nearing a place where the business fundamentals on the fast
charge are better than they are on the fuel," BP's head of
customers and products Emma Delaney told Reuters.
Strong and rising demand for rapid battery chargers in
Britain and Europe, has already brought profit margins close to
those for traditional petrol filling, she said.
Delaney did not disclose profit and loss for EV charging or
when overall profit from the business could eclipse traditional
fuel. In 2020 BP reported a gross margins for retail fuel sales
of $3.5 billion. Its customers and products division made $2.6
billion in net profit in the first nine months of 2021, around
17% of the company's total profit.
The company also said that electricity sales for EV charging
grew 45% in the third quarter of 2021 from the previous quarter.
According to consultancy Thunder Said Energy, the
traditional fuel retail margin at petrol stations is about 17
cents per gallon, roughly 0.4 cents per kilowatt hour.
London-based BP plans to grow its EV charging business in
the coming years to 70,000 charging points by 2030 from 11,000
now.
Like rivals including Royal Dutch Shell, BP's
retail business, which includes fuel sales and convenience
stores, is highly profitable and central in its energy
transition strategy.
"Overall, we see a huge opportunity in fast charging for
consumers and businesses, as well as fleet services more
generally - that's where we see the growth, and where we see the
margins," Delaney said.
Shell aims to have 500,000 charging points globally by 2025.
On Thursday it opened https://www.shell.co.uk/media/2022-media-releases/shell-replaces-fuel-pumps-with-ultra-rapid-charge-points-at-first-ev-hub-in-fulham-london.html?utm_medium=social_organic&utm_content=global_video_000_0052&utm_campaign=project_evelyn_2021_2022_ev_launch_jan-jan_2022&utm_source=twitter&postid=6189653678&linkId=147943372
its first ultra-fast EV charging station in London, which can
charge 80% of a car battery in 10 minutes.
While rivals like Shell are investing in a range of charging
technologies including tens of thousands of slower, low voltage,
on-street charging points in Britain and elsewhere, BP is
focusing on fast and ultra-fast charging technology.
"We've made a choice to really go after high speed, on the
go charging - rather than slow lamppost charging for example,"
Delaney said.
Fast charging, defined as more than 50 kilowatt, and
super-fast charging at more than 150 kilowatt, are however
expensive to install as they require large investment in
heavy-duty power infrastructure.
"Historically, many operators have struggled to make money
out of EV charging, that's been like the worst kept secret in
the industry," said Adrian Del Maestro, director at PwC
Strategy&.
The drive to expand EV charging points also aims at keeping
a strong stream of customers at BP's petrol stations and their
adjacent convenience stores.
"There has been a land grab by charge point operators,
including the oil majors, to buy real estate and build
infrastructure, with a view to generating growth revenues in the
future," Del Maestro said.
(Reporting by Ron Bousso; editing by David Evans)
