We speak to István Kapitány, Global Executive Vice President of Shell Mobility, about the role of China in its global operations, unveiling the company’s biggest EV hub, and their 10-in-1 integrated energy station.
Q. China has become synonymous with the future of mobility. The country is investing in all forms of new mobility while becoming the biggest EV player in the world. Shell currently operates a network of over 2,000 service stations, around 25,000 EV chargers, and one hydrogen site in the country (according to Shell’s website). Could you put into words what role is China starting to play in Shell’s global retail operations?
A. China is a very important market for mobility globally including for Shell. We see great potential in China for Shell Mobility to further grow on many aspects.
I was recently in China for my first visit since the pandemic, and it’s always a pleasure to visit and see what our Shell colleagues and business partners are delivering there.
My first stop was in Xi’an to launch Shell V-Power Racing, which is our best-ever Shell V-Power in China. Based on the success of our Shell V-Power Racing in 13 other countries and regions, we were very pleased to bring this latest fuel formulation to China, together with Yanchang Group – one of our Joint Venture partners.
In China, like the rest of the world, road transport is still dominated by vehicles powered by internal combustion engines, but electric mobility and alternative fuels are well on their way to mass adoption.
Particularly within Shell’s network, nowhere is this statement truer than in China.
In 2018, we launched the first Shell Recharge EV charging site in China, and now, just five years later, we’ve celebrated the installation of our 25,000th charging point in the county.
Not to mention, we just opened Shell’s largest EV charging station globally in China.
So, we see big potential in this market across all aspects of our Mobility business – across fuels, convenience retail and EV charging.
Q. You were recently in China visiting some of the key projects between Shell and its partners. What lessons do you take from the experience in the Chinese market? Which could be applied in other markets?
A. One of our biggest partnerships in China is with BYD – the world’s leading EV maker – which we formally launched last year.
Since then, the partnership has grown in scale, strength and speed. In addition to other win-win opportunities, we agreed to establish a joint venture to operate an EV charging network in China.
It is very impressive that a joint venture only just set up at the end of 2022 already has over 13,000 charging points in operation.
Beyond China, we are also very proud of our cooperation with BYD to assist in bringing its range of electric vehicles to Europe.
Earlier this year, we announced a charging partnership to make the charging experience for BYD drivers in Europe as convenient as possible by offering BYD drivers an exclusive charging membership across our network.
As the mobility ecosystem changes, so does the potential for new partnerships to share the burden of investment and resources, helping us decarbonise faster.
This also creates new experiences that go to the heart of customer needs – and of course, opens new revenue streams.
Q. Last month, Shell and BYD opened the largest EV charging station in China featuring 258 public fast-charging points. Aside from its size, what would you highlight about this EV hub?
A. We’re really proud of this station – with its 258 fast-charging points, it is our largest EV mobility hub ever, both within China and globally.
We see the transition to electric vehicles as a big opportunity for our convenience retail business as drivers will often base their en-route recharging decision on where they would want to spend their time waiting while their car is being charged.
It is about recharging yourself while you recharge your car. In turn, our differentiated offerings at our forecourts will make our retail stations an attractive charging location for our customers.
And our approach at this site is no different. In addition to EV charging, the station offers Shell Select convenience retailing, Shell Café, a restaurant serving local cuisine, vending machines, and a drivers’ lounge.
The rooftop solar panels installed at the station can generate about 300,000 kilowatt-hour of renewable electricity per year, which will be used to charge customers’ vehicles.
In total, this site offers at least six different energy products and services for customers – all selected based on our insights into Chinese customers’ various and evolving needs while they are on the go.
Q .Have you already been able to get data on the conversion rate from users charging to shopping in the facilities? How do you see this challenge?
A. In many core markets around the world, nearly half of customer transactions already focus on our convenience retail offer.
EV customers spend more time on our sites, giving us the opportunity to further increase retail basket size.
Already, at the Shenzhen Airport site, we have around 1200 transactions per day for all kinds of shopping – the restaurant, Shell Select and Shell Café.
With around 3300 EV charging customers per day, this means a conversion rate well over 35%, which is already very good, but we are confident we can get it even higher in the future.
Along with the conversion rate, sales volumes and revenue have also been doing very well.
After bringing the station up to Shell standards and introducing the Shell offer, sales volumes grew 3.5 times and sales revenues by 6 times in the trial operation months.
What these numbers say to me is that customers appreciate the effort we are putting into improving the overall EV charging experience.
Q. In your recent trip you also met up with Shell’s various partners in the country. What can you tell us about the perspective of Chinese companies towards the mobility and energy transition?
A. As the global frontrunner in EV adoption, with no signs of growth stopping, there are still huge development opportunities for EV charging providers in China.
I already mentioned our partnership with BYD earlier; and we are working with many more partners in China to offer a range of mobility choices to customers, including cleaner mobility.
More broadly, there is a recognition across the industry that no single company, including Shell, can solve the challenges presented by the energy transition.
There’s a role for energy companies, such as Shell, but also governments, industry, and customers.
That is why we have several joint ventures and partnerships with companies to help us provide the full scope of solutions that customers need to embark and enjoy during the energy transition.
We are looking forward to growing our business directly, and together with partners, as we continue to play a part in the decarbonization of China’s mobility system.
Q. In Wuhan you opened the Panlong station, which has been labelled Shell’s first 10-in-1 integrated energy station globally. What makes this station special compared others in the market?
A. The Panlong site is a shining example of how we’re evolving our business to meet the customers’ need, to contribute to the energy-transition journey while maximising the business value.
It is also an exciting insight into the mobility station of the future.
We know that Chinese customers have varied energy needs and that those needs are also changing as more drivers switch to electric vehicles.
At this site, Shell aims to support all our customers on the road regardless of whether they drive an electric car, a petrol or diesel van or even a hydrogen truck. In fact, this is the first location in China where we offer hydrogen refuelling.
To help our customers recharge themselves while they refuel at this site, we have a great food and beverage offering including Shell Select, Shell Café and KFC, as well as a “Drivers’ Home” – a place for drivers to rest, eat, shower, do laundry and connect.
There is one more thing I want to highlight about Panlong, which is sustainability.
This station is embracing a lower-carbon approach from day one. With its rainwater recycling features, insulating glass, energy-saving lighting, and roof-top solar power systems, Panlong sends a powerful message to our customers on every visit.
People often ask me what service stations of the future will look like.
Not every Shell site will have the same scale and breadth of offer as Panlong in the future, but we aim to continue growing through a combination of quality fuels, convenience retail and EV charging to meet different needs.
Q. The station seems to define the concept of a ‘multi-energy, multi-service hub.’ It also has an impressive design. Is this a model you will look to replicate in in the other parts of the world?
A. This model of EV charging, alongside traditional fuels and convenience retail is one we are already employing across many forecourts across Asia, Europe, and the Americas.
Shell’s advantage as an established player across mobility choices – not purely focused on EV – is that we only have to make the incremental activity and investment.
The infrastructure is already in place at our sites with EV charging provides synergies with all the other existing retail propositions.
We see multiple fuels on the forecourt to service different needs, but with flexibility built in that means we can transition to more lower carbon fuels as our customers vehicles transition.
Q. The site also includes a hydrogen fueling station. Last year, you announced plans to build 6 to 10 HRS in Shanghai and the Yangzte River Delta as part of a JV with Shanghai Shenergy. What is your outlook for the Chinese hydrogen mobility sector?
A. I mentioned that we just recently opened our first hydrogen refilling station in China at Panlong station, and I look forward to seeing the results and feedback from customers.
Globally, we aim to offer multiple refuelling options on our forecourts to meet different needs, and with flexibility built in, we can transition to more lower-carbon fuels as our customers transition.
A range of variables will decide on the role hydrogen can play in different mobility segments. Infrastructure cost, vehicle cost, and energy efficiency will be key factors in this.
At Shell, we believe that the future of light duty vehicles will be dominated by EVs based on these factors.
Of course, different markets will move at a different pace and some will have specific conditions which could put them on a different pathway.
Q. What are Shell’s plans for China in the next 5 to 10 years?
A. I can’t share specific plans, but we aim to continue growing profitably together with our partners. The pace of change and progress towards electrification in China is truly impressive.
What our teams in China are delivering also provides a tremendous example of what Shell Mobility can do around the world to make life’s journeys better, to bring a better mobility future in the context of energy transition.
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