In a strategic pivot, major oil companies are increasingly focusing on the burgeoning electric vehicle (EV) charging market in the Asia-Pacific (APAC) region. Sinopec, one of China’s largest state-owned oil majors, has been on a roll this year. Just this year, the company has mainly claimed credit for building 3,874 charging stations. By the end of 2024, Sinopec had become the world leader in the global EV charging market, with home to 9,051 stations globally. Indian Oil and Shell are at the forefront in the sector with 7,863 and 3,063 stations respectively. Combined with their work during the 2023-24 state budget period, 9,846 EV charging stations were installed.
This increased attention to EV infrastructure is part and parcel with a larger trend taking over the industry. According to the International Energy Agency, by 2030 EVs will have displaced more than five million barrels of road fuel daily. Petroleum fuel demand from internal combustion engine cars and vans are at record highs. In truth, they represented more than a quarter of the world’s oil consumption in 2023. And just this month, Sinopec doubled down on cutting emissions by reducing their integrated refineries and petrochemical plants emissions. They’ve retracted their 2030 target from 20% down to a 15-20% range and have released their 2035 emissions reduction goal—previously a 2030 replacement—entirely.
The Growing Demand for EV Charging Infrastructure
With the global market for electric vehicles rapidly expanding, the need for supporting infrastructure is increasing at an unprecedented rate. China alone had 16.7 million EV charging units by the end of July 2023, reflecting the country’s commitment to electric mobility. No wonder major players such as Sinopec are reacting to this demand by making huge investments in charging stations.
Ravindra Puranik, an oil and gas analyst at GlobalData, noted that “the oil and gas industry is undergoing notable transformation in response to the electrification of the transport sector.” He noted that funding for EV charging stations allows private companies to maximize their existing investments in fueling infrastructure. This action is a concrete step in advancing the shift to electric mobility.
Sinopec’s aggressive investment strategy underscores its desire to capitalize on this momentum. The company’s aggressive expansion is an acknowledgement of the changing energy landscape and where consumers are headed in their preference for electric vehicles. If incomes continue to grow as they have across Asia-Pacific, passenger car ownership will more than double to about 1.4 billion vehicles. Brian Peers, global head of sustainable transport and fuels at HSBC, emphasized that “as incomes rise across Asia-Pacific over the coming decades, car ownership is set to increase,” predicting that the region will account for over 60% of the 115 million EVs sold worldwide over the next five years.
Challenges in Western Markets
Unlike APAC, where investment in EV infrastructure is booming, Western markets are grappling with economic headwinds that stifle progress and opportunity. Regulatory uncertainties and slow adoption overall have caused a cooling off of investment here in Europe and the U.S. Puranik pointed out that “there is evidence of a modest rollback or at least slowing of EV investment in parts of the Western market,” attributing this trend to external factors impacting investor confidence.
Shell’s spokesperson acknowledged that “as the EV charging industry is still nascent, we are continuously learning and adapting our EV growth strategy to market conditions.” The company has made these investments largely in markets that are at the forefront of EV adoption, namely China and Germany. At the same time, it acknowledges their enormous growth opportunity and current competitive strengths.
This juxtaposition highlights the increasing divergence between states and metro areas. It’s the perfect time to take advantage of APAC’s thriving investment opportunities and growth potential. In the background, European companies such as BP Pulse are drastically reducing yearly investment due to a difficult market environment. This reluctance to expand in Western markets stands in stark contrast to the proactive approaches that are being taken within the APAC region.
The Future of EV Charging in APAC
Looking forward, the EV charging infrastructure landscape in APAC is vibrant with opportunity. Historically key markets such as China and India are poised for an explosive increase in production levels. This increase in scale is already driving down the cost of these products and driving development of smaller, cheaper models designed for mass-market consumers. Clarice Brambilla, an energy transition analyst at GlobalData, expressed optimism about this trajectory: “I expect to see continued growth in EV production volume. I expect to see increasing affordability.”
Investment trends indicate that oil companies are not merely adapting but actively seeking to lead in this transformative period. On one point, Shell has acknowledged its deep-rooted advantages. Today, the company is using those strengths to establish itself in the fledgling EV market.