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This begs a larger question of how petroleum mega corps are going to weather the transition to electric vehicles. Looking at BP, margins are really poor. They h

This begs a larger question of how petroleum mega corps are going to weather the transition to electric vehicles. Looking at BP, margins are really poor. They have $22 Billion in cash vs. $11 Billion operating expenses and $24 Billion in debt. There is time: in March, 2% of new vehicles sold in Europe were BEV. On the other hand, the total spend on electricity per mile driven is 1/3 that of petrol. That means a complete transition would ultimately yield 1/3 the revenue. In order to remain even, the companies would need to see 3x the gross margin on the electricity than they gain on petrol. Is that possible? BP's gross margin is 7.5% (TTM). Can they get <20% gross margin on electricity? Maybe. But the real killer is people charge at home, over night. So, no. Electric charge stations will not supplement petrol station revenue. They are toast. They'll need to find entirely new businesses to invest in to survive.

JumpCrisscross 6y ago
> They are toast Oil and gas majors are super cortexes of geological, chemical, industrial, logistical, geopolitical and material science expertise.
- 11thEarlOfMar 6y ago
  True, rebalancing can be part of the plan. But gross margins are 'low' (~7% for BP ~20% for XOM) in spite of the diversification, so there's not a lot of fuel to reinvest. And gasoline sales are about 50% of XOM business, for example [0], which is a lot to make up. The gas station/fuel part of the business is on a long-term trend down (toast). Finding places to make up for the 50% lost sales will be tricky. [0] https://corporate.exxonmobil.com/-/media/global/files/annual-report/2018-financial-and-operating-review.pdf https://corporate.exxonmobil.com/-/media/global/files/annual... SEE PAGE 108
- woodandsteel 6y ago
  Yes, they have tons of expertise, but it is mostly in different fields than renewable energy. And their management has the wrong people, from the top to the bottom.
mistrial9 6y ago
Big Oil has been rigging the finances for eighty years (pun). Seriously, "cash" is close to Hollywood accounting, which is to say, declare what you must in order to have access to bank loans in your Federal jurisdiction, hide the rest in the crooked jurisdiction of your choice.
def8cefe 6y ago
Looking at just gas stations, they could spin it into a benefit since the customer will be required to stay at the station for a significant amount of time (~30 mins?) to charge instead of a few minutes. You lure them in with the electricity then push all your high-margin crap on them like drinks and snacks. It would massively increase foot traffic to quick-service restaurants, cafes and other activities on or near the premises as well. People will go to stations less, but they will spend more time there. Current EV utilization of paid, away-from-home chargers shouldn't be expected in future when EV owners can't just rent a ICE vehicle for any trip greater than ~400km roundtrip.
- 11thEarlOfMar 6y ago
  It's definitely a business model to look into. And on primary highway routes, there would be some success. The suburb I live in has about 50 gas stations for 200,000 people. I charge my BEV overnight at home and have spent at most $100 charging at paid stations in 3 years. (Charging at home is about 1/2 the cost of a charge station for me.)There is a major freeway through town, but the vast majority of traffic is commuters, who will likely also charge at home. Some stations will successfully transition, and for sure, there will be solutions I can't imagine at this point. It will be interesting to see how it actually plays out.
- fyfy18 6y ago
  In my country this is how the petrol stations stay relevant. Prices for fuel are pretty consistent between them (unlike say Italy, where there can be a 20c/litre difference if you drive 100m to the next station) so they've had to branch out to provide additional services. All petrol stations that have a store have a selection of hot drinks and food, and various other things you would expect form a corner shop. The prices are lower than coffee shops, and in some cases better quality too (especially for food). I saw one brand recently started selling their food on delivery services as less people were travelling during quarantine. Most of the automated stations (i.e. you can only pay at a machine, not they fill up the car for you :D) share the premises with a fast-food restaurant. Most EV chargers price their electricity at quite a bit higher than you would pay at home, so in the short term I guess they can jump on this bandwagon. But as range increases and cities start installing more on-street chargers that model will fail too.
1bc29b36f623ba8 6y ago
> They are toast. Many traditional petrol stations are toast already. The one in the village where I live closed decades ago. The one in the next village only survives because it's got a fairly successful tire business run by the owner's son as a side gig, and because it's the only place in a 30 km radius where you can buy basic necessities like toilet paper, toothpaste, and basic foodstuffs, as well as other goods like beer and soda. If that place had to survive on the money from petrol sales alone they wouldn't have been there. If there's a demand for charging stations I'm sure they'll adapt. :)
- adrianN 6y ago
  I'll never understand why people live in places where you have to travel more than 30km to a supermarket.
  - cheschire 6y ago
    Freedom from tyranny, perceived or otherwise. Cost. Preference for rural immersion. Social expectations.
    - 1bc29b36f623ba8 6y ago
      Pretty much. We wanted a simple life and we got it. Only going to the supermarket twice a month saves a ton of money, and working remote saves me a lot since there's no commute.
woodandsteel 6y ago
I think the petroleum mega corps are all going to go bankrupt. Their value is all tied up in what are going to be stranded assets, and as a consequence their stock prices are going to crash and they will no longer be able to take out loans to finance new initiatives, most specifically expanding into renewable energy. And besides that they will be competing against RE companies with a huge head start. In the last couple of years the financial community has been slowly coming to the same conclusion.

JumpCrisscross 6y ago

> They are toast Oil and gas majors are super cortexes of geological, chemical, industrial, logistical, geopolitical and material science expertise.

11thEarlOfMar 6y ago
True, rebalancing can be part of the plan. But gross margins are 'low' (~7% for BP ~20% for XOM) in spite of the diversification, so there's not a lot of fuel to reinvest. And gasoline sales are about 50% of XOM business, for example [0], which is a lot to make up. The gas station/fuel part of the business is on a long-term trend down (toast). Finding places to make up for the 50% lost sales will be tricky. [0] https://corporate.exxonmobil.com/-/media/global/files/annual-report/2018-financial-and-operating-review.pdf https://corporate.exxonmobil.com/-/media/global/files/annual... SEE PAGE 108
woodandsteel 6y ago
Yes, they have tons of expertise, but it is mostly in different fields than renewable energy. And their management has the wrong people, from the top to the bottom.

mistrial9 6y ago

Big Oil has been rigging the finances for eighty years (pun). Seriously, "cash" is close to Hollywood accounting, which is to say, declare what you must in order to have access to bank loans in your Federal jurisdiction, hide the rest in the crooked jurisdiction of your choice.

def8cefe 6y ago

Looking at just gas stations, they could spin it into a benefit since the customer will be required to stay at the station for a significant amount of time (~30 mins?) to charge instead of a few minutes. You lure them in with the electricity then push all your high-margin crap on them like drinks and snacks. It would massively increase foot traffic to quick-service restaurants, cafes and other activities on or near the premises as well. People will go to stations less, but they will spend more time there. Current EV utilization of paid, away-from-home chargers shouldn't be expected in future when EV owners can't just rent a ICE vehicle for any trip greater than ~400km roundtrip.

11thEarlOfMar 6y ago
It's definitely a business model to look into. And on primary highway routes, there would be some success. The suburb I live in has about 50 gas stations for 200,000 people. I charge my BEV overnight at home and have spent at most $100 charging at paid stations in 3 years. (Charging at home is about 1/2 the cost of a charge station for me.)There is a major freeway through town, but the vast majority of traffic is commuters, who will likely also charge at home. Some stations will successfully transition, and for sure, there will be solutions I can't imagine at this point. It will be interesting to see how it actually plays out.
fyfy18 6y ago
In my country this is how the petrol stations stay relevant. Prices for fuel are pretty consistent between them (unlike say Italy, where there can be a 20c/litre difference if you drive 100m to the next station) so they've had to branch out to provide additional services. All petrol stations that have a store have a selection of hot drinks and food, and various other things you would expect form a corner shop. The prices are lower than coffee shops, and in some cases better quality too (especially for food). I saw one brand recently started selling their food on delivery services as less people were travelling during quarantine. Most of the automated stations (i.e. you can only pay at a machine, not they fill up the car for you :D) share the premises with a fast-food restaurant. Most EV chargers price their electricity at quite a bit higher than you would pay at home, so in the short term I guess they can jump on this bandwagon. But as range increases and cities start installing more on-street chargers that model will fail too.

1bc29b36f623ba8 6y ago

> They are toast. Many traditional petrol stations are toast already. The one in the village where I live closed decades ago. The one in the next village only survives because it's got a fairly successful tire business run by the owner's son as a side gig, and because it's the only place in a 30 km radius where you can buy basic necessities like toilet paper, toothpaste, and basic foodstuffs, as well as other goods like beer and soda. If that place had to survive on the money from petrol sales alone they wouldn't have been there. If there's a demand for charging stations I'm sure they'll adapt. :)

adrianN 6y ago
I'll never understand why people live in places where you have to travel more than 30km to a supermarket.
- cheschire 6y ago
  Freedom from tyranny, perceived or otherwise. Cost. Preference for rural immersion. Social expectations.
  - 1bc29b36f623ba8 6y ago
    Pretty much. We wanted a simple life and we got it. Only going to the supermarket twice a month saves a ton of money, and working remote saves me a lot since there's no commute.

woodandsteel 6y ago

I think the petroleum mega corps are all going to go bankrupt. Their value is all tied up in what are going to be stranded assets, and as a consequence their stock prices are going to crash and they will no longer be able to take out loans to finance new initiatives, most specifically expanding into renewable energy. And besides that they will be competing against RE companies with a huge head start. In the last couple of years the financial community has been slowly coming to the same conclusion.