Fossil fuel giant Shell (SHEL) is strategically shifting towards electric vehicle (EV) infrastructure as the world moves ahead with sustainable transportation. The company plans to shutter up to 1,000 of its retail gas stations over the next two years, closing approximately 500 sites per year in 2024 and 2025. Instead of operating traditional gas stations, Shell aims to concentrate its efforts on expanding its public EV charging network. The goal is to increase the number of charging points from the current 54,000 to an ambitious 200,000 by 2030, catering to the rapidly growing EV market and providing added convenience to customers.
What Does a Leaner, Cleaner Shell Look Like?
In addition to its EV charging initiatives, Shell is softening some of its carbon emissions targets for the next decade while maintaining its commitment to achieving net-zero carbon emissions by 2050. The company plans to invest $10 to $15 billion into low-carbon energy solutions between 2023 and 2025. Shell's energy transition strategy also involves supporting key industries related to the renewable energy sector, such as supplying transformer oils for offshore wind parks and developing cooling fluids for EV battery production.
What Investors Need To Know
Shell isn’t just closing, but rather divesting, those 1000 Shell-owned sites and joint ventures—an important detail first spotted by Bloomberg and which is clearly stated on page 28 of the company’s Energy Transition Strategy 2024 report. Last year, Shell acquired Volta Charging, a U.S. EV charging network with a significant presence in the market. The company plans to focus on Europe and China, which have a more developed EV market and a greater demand for public charging stations. Shell expects an internal rate of return of at least 12% from their EV charging business. Currently, 11 analysts, including Goldman Sachs, Morgan Stanley, and Piper Sandler, rate SHEL as a Strong Buy.
Subscribe to our SMS alerts for up-to-the-minute stock alerts.
Did you find this insightful?
Bad
Just Okay
Amazing