Electric vehicles need a solid charging infrastructure to thrive. A significant portion of this infrastructure comprises public fast chargers because they allow EV drivers to charge their batteries faster when they cannot access their home chargers. Also, public DC fast chargers come to the rescue for drivers who cannot install a charging station at home.
Due to the high setup costs for DCFC, fast-charging stations are usually run by third-party companies. However, if these companies cannot turn a profit, the business will eventually be abandoned. Gas stations stay in business because they make a profit selling fuel to ICE drivers. The question, then, is, can fast EV charging be more profitable than selling fuel?
In this article, we look at BP, a company with a chain of gas stations trying to shift away to EV charging.
Can fast EV charging be more profitable than selling fuel?
According to BP, the answer is yes. Like the rest of its rivals, BP had spent years investing heavily in expanding its charging network. As such, it had been recording losses. However, the company recently revealed a turnaround.
BP announced that its EV charging business is on the cusp of being more profitable than its fuel selling business, which means it is already making a profit. The company projected this milestone would come in 2025, but it has already exceeded its goal with three years to spare.
Responsible for this dramatic turn of events is the surge in demand for electric vehicles in Europe, allowing BP to reap the benefit of its expansion faster than it expected.
Revenue from public charging increased by 45% between the second and third quarters of 2021, allowing the division to come close to overtaking the fuel dispensing business in terms of profit.
The company is yet to reveal its profit margin from its fast-charging stations, but we have an idea from an estimate provided by Thunder Said Energy. The consulting firm reports that BP’s profit margin on gas is 17 cents per gallon and 0.4 cents per kWh from EV charging.
BP, however, has not stopped expanding. It promises to increase its public charging points from 11,000 units to 70,000 by the end of the decade.
BP is proof that even though government intervention is necessary to develop EV charging infrastructure, there is room for companies to build profitable businesses charging EVs.
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