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THE second-largest gas station chain by number of American locations has set plans into motion to shutter 1,000 pumps.
The gas giant is switching operations to electric vehicle charging, focusing on competing with some of the nascent Level 3 brands.
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In March, Shell said it was looking to shutter 1,000 gas-focused store locations.
The energy company wanted to shutter 500 gas stores in 2024 and another 500 in 2025.
The plans were laid out in its 2024 Energy Transition Strategy.
There are around 14,000 Shell gas stations across the US, spanning 49 American states.
Read More on Gas Stations
The plans to shutter the locations followed a seismic shift in company strategy, according to Convenience Store Dive.
In 2007, the gas major exited ownership operations of its nationwide fleet of stores.
Instead, the brand signed licenses with franchise owners nationwide.
But in 2021, the company started purchasing back several hundred stores, including from operations in Texas and New Mexico.
Overall, the company reported spending $2.3 billion on construction projects for non-energy businesses, including convenience stores.
The company said it hoped to electrify company-owned stations as it worked toward clean energy solutions to cut carbon emissions.
It also said the switch to EV charging infrastructure was “in response to changing customer needs.”
Executives believe Shell is in a prime position to strike back at electric vehicle charging companies because of its expansive footprint across the US.
“We have other competitive advantages, such as our convenience retail offering, which allows us to offer our customers coffee, food, and other convenience items as they charge their cars,” the company said in a March 2024 financial report.
“As we grow our business offering charging for electric vehicles, we expect an internal rate of return of 12% or higher.”
In a statement to the U.S. Sun, Shell said the company is pursuing “paced growth in key markets,” including more retail operations and charging infrastructure.
The brand said it currently runs 4,000 electric vehicle charging plugs throughout the US.
Electric vehicles vs gas
Pros and cons of EVs vs gasoline-powered vehicles
EV PROS:
- Convenient (when charging at home)
- Cheaper (depending on state or city)
- Cheaper maintenance, due to lack of mechanical parts
- Great for commuting
- Reduced CO2 emissions
- Federal and state tax incentives
- More performance (speed, handling – depending on the make and model)
EV CONS:
- Higher initial cost
- Higher insurance rates
- More frequent tire and brake replacement intervals
- Higher curb weight (thus causing more rapid wear on crucial parts)
- Low resale value
- High depreciation rates
- Lack of charging infrastructure
- Unreliable public charging (related: slow charging times)
- Poor winter and summer performance
- Lack of clean energy alternatives means more “dirty energy” from coal and nuclear sources
- Range anxiety
GAS PROS:
- Highly developed refueling infrastructure
- Fast refueling
- Cheaper insurance rates, depending on make, model, and configuration
- Established repair industry
- Lower initial cost
- Higher range before refueling, especially with hybrids
- Many manufacturers produce nearly emission-less engines
- Cheaper refueling, depending on the location
GAS CONS:
- Finite resource (related: heavy dependence on petroleum)
- Carbon emissions/greenhouse gases
- Higher repair costs
- Higher insurance rates, depending on make, model, and configuration
- Varying costs at the pump, depending on state, city, and county
Source: Car & Driver, Perch Energy, AutoWeek
CHARGE CHANGE
The US EV market has gone through massive spurts in 2024.
Multiple companies, including Hyundai, Ford, Lucid, and Rivian, have reported monthly sales records of their all-electric cars.
However, EV sales giant Tesla has missed sales expectations in both quarters of 2024.
Sales of plug-in and mild hybrid cars have spiked as consumers look to save money on gas without shifting to full EV driving.
Consequently, Ford, GM, Volkswagen, and Volvo have announced pullbacks from their initial all-electric pursuits.
