Chief Executive Murray Auchincloss announced on Tuesday that energy major BP will continue to expand its fuel and convenience segment and drive sales from its EV charging business over the next two years.
Gross Margin Growth in Convenience Business
During a call with analysts, Auchincloss highlighted that the gross margin for BP’s convenience business in 2023 saw a 9% year-on-year increase. This growth was driven by the roll-out of strategic convenience sites and partnerships. Strategic convenience sites are expected to play a crucial role in driving profit growth for the company. BP plans to increase the number of strategic sites to 3,000 by 2025, up from 2,850 in 2023.
Integration of Convenience Assets in North America
Auchincloss also noted that BP continues to integrate recently acquired convenience assets in North America, such as ampm, Thorntons, and TravelCenters. The company anticipates synergies and improved efficiencies as a result of these acquisitions.
EV Charging Business Expansion
BP experienced a 35% year-on-year increase in installed charge points in 2023. Furthermore, energy sold through these charge points saw a significant jump of 150% during the same period. Currently, BP has approximately 29,000 charge points globally, with plans to expand this number to 40,000 by 2025.
Focus on Four Countries for Convenience Electrification Business
BP will concentrate its efforts on its convenience electrification business in four countries: the U.S., U.K., Germany, and China. Auchincloss stated that he expects BP’s EV business to turn a profit by 2025.
Positive Outlook from UBS Analysts
UBS analysts released a note expressing confidence in BP’s success in the EV charging business. They cited factors such as the company’s existing fuel marketing sites, improved convenience offerings, and partnerships with automakers like Tesla, which would facilitate the rapid development of fast-charging networks. UBS emphasized that BP’s extensive access to land and electricity puts it in a unique position to provide chargers at a large scale.
Reporting by Frank Tang; Editing by Michael Kelly.