In a suburban area of Beijing, a battery charging station unveiled by Sinopec in December 2023 offers a glimpse into China’s future beyond gasoline. With 70 fast electric vehicle charging points, amenities like coffee machines and massage chairs, this station is just one of many being constructed by state-run oil giant Sinopec across China as the industry adapts to the shift towards battery-powered driving. As electric vehicle (EV) sales are projected to make up 40% of the 23 million cars sold in China this year, the country’s largest oil refiners and marketers, Sinopec and PetroChina, are facing the imperative need for strategic transformation.
Predictions suggest that China’s gasoline demand will peak by 2025 and potentially halve by 2045, underscoring the urgency for these oil companies to revamp their business models. While global energy firms like Shell and TotalEnergies are drawing insights from EV markets in countries like Norway to apply them on a larger scale in China, challenges persist in China’s public EV charging sector. Market fragmentation, overcapacity, low utilization rates, and financial losses pose hurdles for oil companies navigating this evolving landscape.
Despite significant investments and expansion plans in the EV charging infrastructure, both Sinopec and PetroChina face operational challenges as they strive to adapt to the changing energy landscape. Sinopec, with 21,000 charging points in operation, has allocated substantial funds for network development, aiming to construct 5,000 charging stations by 2025. PetroChina, operating 28,000 charging points through its subsidiary Potevio New Energy, plans to boost capital spending on marketing and distribution to enhance comprehensive service offerings.
With each holding a modest market share of public charging points in China, both companies are actively positioning themselves for a future dominated by electric vehicles amidst evolving market dynamics and regulatory shifts.