Market Insights – How is EV charging going to transform the oil and gas industry?
The current state of oil and gas in the EV charging space
Even if the growth of e-mobility does not sound the death knell of the oil and gas industry, it is taking increasingly bigger bites out of global oil demand. This means profound changes are needed for the oil and gas sector to survive.
Research published by BNP Paribas in September 2019 shows that 36% of the crude oil produced today is used to power vehicles that could potentially be replaced by EVs. The report also states that the oil industry has never faced the kind of threat that the combination of renewable electricity and EVs pose to its business model.
Oil and gas corporations are aware of this looming threat to their business, however their involvement in the e-mobility industry still remains timid. Up until recently they have mainly focused on buying EV charging start-ups to expand their portfolio of services and strengthen their offer.
How are Oil and Gas companies likely to change in the next decade?
The latest report by the International Monetary Fund predicts that global oil demand could peak around 2040, or even in the 2030s if environmental policies are implemented more rigorously.
Peak-oil demand might be a mid to long-term threat, but the lack of visibility of the oil and gas industry’s long-term future is already a significant risk for investors. In addition to their investments in innovative e-mobility start-ups, oil and gas corporations now have to reinvent their business models.
With their existing real estate, they are in a unique position to introduce EV charging networks, both nationally and internationally. It could even be argued that they are the best positioned to solve two of the main drawbacks to EV adoption: range anxiety and the shortage of charging stations. The conversion of petrol stations to EV charging stations is already starting to happen. In the U.S. state of Maryland, a gas station has completely switched its petroleum pumps for EV chargers.
Driivz insight: how will oil and gas corporations benefit from the e-mobility revolution?
The e-mobility revolution presents new revenue streams opportunity for the oil and gas industry. Previously anonymous users of petrol stations will become identified when charging their EVs. With these invaluable insights into drivers’ behaviour, oil and gas corporations will be able to provide additional services and products to EV drivers, while utilizing their reformed real estate.
The e-mobility revolution also offers the opportunity to oil and gas corporations to enter the energy industry, up until now the playing field of utilities, through the addition of energy management features to their offerings.