Shell is planning to close 1,000 retail gas stations around the United States before the end of 2025 as part of a new strategy in order to move from investment in businesses related to fossil fuels to renewable energy and the extension of its network for electric vehicle charging.
New strategic shift toward electric mobility
In its Energy Transition Strategy 2024 report, Shell announced plans to divest the stations within a two-year timeframe and invest in the mushrooming demand for EV charging facilities. The company added that this decision was “in response to customer needs,” which marked a sea change in consumer preference for sustainable energy solutions.
As of the end of 2023, the electric vehicle charging business of Shell, Shell Recharge, ran operations from around 54,000 public charging points from the group’s capacity of about 27,000 in 2022. This is targeted for increase to around 70,000 by 2025 and approximately 200,000 by 2030, all part of its group’s strategy that it will use to contribute toward the global transition toward electric mobility.
Impact on US operations
The planned shutdown of 1,000 service stations represents about 4% of Shell’s total retail network. While the company hasn’t identified which US locations would be closed, the closures are expected to be staggered over two years-500 by the end of 2024 and another 500 by the end of 2025.
This move aligns with Shell’s recent activities in the US market. In March 2024, Shell USA completed the acquisition of EV charging company Volta, enhancing its ability to provide comprehensive charging solutions across the country. Currently, Shell Recharge operates more than 3,000 charging points across 31 US states, with plans for developing an additional 3,400 charging points in the near future.
Global expansion of EV infrastructure
Its commitment to EV infrastructure extends from country to country: as of September 2024, Shell has started operating the largest EV charging station at an airport in Shenzhen, China. This facility boasts an enormous 258 supercharging points. This facility is very high in customer turnout, literally with thousands of electric vehicle drivers being serviced day in and day out on the site.
The company accordingly “recognises that “growth in oil demand is set to slow in the second half of this decade and could start falling in the 2030s because of increasing vehicle efficiency and growth in electric vehicles.” This analysis also finds support from market projections, which detail that EVs would increasingly be adopted and become as large as 275 million electric vehicles on the highways by 2030.
Oil and Gas industry context
Shell’s announcement is the latest in a spate of pronouncements by oil-and-gas companies rethinking their business models as energy demands shift and environmental imperatives become clearer. The American Fuel and Petrochemical Manufacturers trade association has countered with an ad campaign against new regulations to hasten the phaseout of gasoline-powered vehicles.
But despite such tensions within the industry, Shell is positioning for the future of energy: “Availability of charging infrastructure will be critical for the growth in electric vehicles,” it says, pointing at its strategic investments in the area.
