As electric cars begin eating into profit growth at oil companies, the war for electric-car drivers' pocketbooks has begun.
Electric utilities are counting on supplying increasing quantities of juice, especially during off-peak hours to make their operations more efficient—and not insignificantly to boost revenues along the way.
Oil companies, who own and supply filling stations around the world, fear a commensurate drop in revenues as more drivers fill up with electrons, and they're starting to fight back, according to a report in Oil Price.
BP, the British petroleum giant, estimates that electric-car sales will explode by 8,800 percent between last year and 2040. That will take a big bite out of the market for gasoline and diesel fuel.
At the heart of the competition is the question of how often electric-car drivers fill up at home, versus when they're out driving as gas-car drivers do.
Oil companies are focusing on what they know—selling quick hits of energy, plus snacks and drinks, along the road—while power companies are banking on additional charging at home and in workplaces, where they already provide the energy.
So far the battle is starting in Europe, where oil companies are testing the waters of electric-car charging, according to a new Bloomberg report published in Australian Financial Review.
Today, more than 90 percent of electric-car charging is done at home, and some electric-car advocates expect this trend to continue. There is no more convenient way to charge, and electric car owners today, who mainly live in single-family homes where they can install such a charger, cite never having to stop at a gas station as one of the main advantages of driving electric.
Electrify America 350 kw chargers at Home Depot in Chicopee, Mass.
Others point out a large untapped market for electric cars among consumers who don't have their own garages or dedicated parking spaces and may have no choice but to take on quick charges while they're out driving.
Estimates of the size of this market vary wildly. Erik Fairbairn, CEO and founder of Pod Point, a major charging network in Britain expects no more than 3 percent of electric-car charging to be done in public. Shell puts the number at 20 percent, with 40 percent charging at home and another 40 percent at work.
2015 Fiat 500e electric car recharging [photo: Chris Baccus]
The market varies by region. In the U.S., almost 65 percent of families own their homes. Rates are lower in other parts of the world. And some of those homeowners live in condominiums or co-ops where installing home chargers can be challenging.
Fast charge networks, such as Tesla's Superchargers and VW's Electrify America in the U.S. and Ionity in Europe, are expanding rapidly to provide public charging for those who can't charge at home, and that's where the battle between utilities and oil companies is primarily playing out.
To serve the public charging market, oil companies are trying a variety of approaches. Some are partnering with charging networks such as BP, which bought Britain's largest electric-car charging network, Chargemaster.
Shell, the second-largest oil company in the world last year bought New Motion, another of Europe's largest charging networks, and made a deal with Ionity, a fast-charging network being set up across Europe by BMW, Daimler, Ford, and VW.
Oil companies are bidding for Electrify America to install fast chargers at gas stations around the U.S., and some early concepts show installations at Shell stations along highways.
Power companies, meanwhile, are stepping up efforts to install chargers at businesses where employees cars are parked for long periods, the Bloomberg report notes.
Of course, there's more than one way for wealthy oil companies to tap into the market for electricity. Shell also recently bought one of the largest electric utilities in Britain for an undisclosed sum.