Shell to buy Greenlots, as EV charging business heats up

Shell

A wave of investment is flowing into building out electric vehicle charging networks, and a bit of that is coming from an unexpected place: oil majors. 

On Wednesday, electric vehicle software company Greenlots announced that it will be acquired by oil giant Shell, and specifically by its division Shell New Energies, which focuses on new transportation fuels including electricity, biofuels and hydrogen. The companies didn't reveal terms of the deal but said that Greenlots' technology would "become the foundation for Shell's continued expansion of electric mobility solutions in North America."

The deal isn't Shell's first in EV charging. A year and a half ago, Shell acquired Dutch-based NewMotion, owner of one of Europe's largest charging networks. 

Shell's interest in electric vehicle infrastructure highlights the growth of the electric vehicle industry, as more consumers and companies in certain regions (California, China and Norway to name three) are increasing buying electric vehicles. One in 10 vehicles sold in California has a plug, said Bloomberg New Energy Finance analyst Colin Mckerracher, while more than half of new cars sold in Norway are electric.

To meet this coming demand for electricity to power vehicles, companies are quickly building large businesses around developing EV infrastructure. Notable players include ChargePoint, EVgo and Volkswagon subsidiary Electrify America.

Electrify America chargers by BTC Power.

ChargePoint recently closed on a $280 million series H round of funding to grow to meet demand. The round included Chevron Technology Ventures.

Electrify America — created as part of a settlement after VW was caught cheating on its diesel vehicle emissions tests — intends to spend $2 billion over 10 years to promote EV adoption and deploy chargers around the United States. Electrify America has been rolling out fast chargers at places such as Walmart parking lots, and along highways. 

While charging companies are trying to grow quickly to deploy the infrastructure, other smaller entrants are innovating around business models. Volta partners with brands and uses advertising to give charging away for free. And FreeWire Technologies deploys mobile battery-based chargers. 

Shell isn't the only oil giant with an interest in EV charging. Last year, BP acquired Chargemaster, the U.K.'s largest public EV charging network. 

While companies are investing big in EV charging, so are states. In some of the largest uses of public funding for EV chargers, last year California energy regulators approved a portfolio of EV charging projects worth $738 million for California’s investor-owned utilities Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE). Those programs will build chargers for both passenger and commercial vehicles.

Shell plans to announce earnings Thursday morning, so we'll look to see if there are any new details of the Greenlots acquisition to update this.