British Petroleum, aka BP, aka aka the folks who brought us both the Deepwater Horizon disaster and the Texas City Refinery Explosion, is not necessarily a company you might associate with vehicle electrification here in the United States. The news, then, that BP us ordering $100 million worth of EV chargers from Tesla might be a surprise. It shouldn’t be.
It’s Friday, folks, so I’m gonna take a little tour through the 20-F annual filing of British Petroleum as a warm-up, and then we’ll talk about vehicle affordability (or lack thereof). More strike updates? Let’s have more strike updates.
Honestly, by the time I’ve finished writing the first section of The Morning Dump we’ll probably have more strike news and I’ll have to start over. Perhaps I should start writing faster.
How BP And Tesla Make Sense
If you’re in the United Kingdom, the idea of BP as an EV-charging firm is probably not so outlandish to you. The company’s EV consumer-facing business, called BP Pulse (formerly Chargemaster), has more than 5,000 public charging points stretching from the English Channel all the way up to Scotland. It’s basically the UK’s Electrify America.
In the United States, BP Pulse stations are few and far between outside of eastern Washington State. I was looking at the BP Pulse stations nearby and it looks like all the ones in the northeast are basically perfectly designed to get an executive from their home in suburban New Jersey to their summer house in a tony neighborhood on the north shore of Long Island.
Seriously, look at this:
A coincidence, I’m sure!
I mention those two disasters in the lede of this morning’s Dump not merely to throw shade on the company, but because they’re important to understanding why BP is doing this. The Deepwater Horizon spill was one of the worst natural disasters in American history and resulted in the largest fines/settlements levied by the government against a company. Overall, the disaster has cost BP more than $65 billion.
The Texas City Refinery was sold, in part, to pay for Deepwater-related expenses and to (at least temporarily) wind down some refining operations, as noted in tthis article from The Guardian from 2012:
BP has been keen to scale down its refining operations, where profit margins are thin. The company is confident of reaching its $38bn target by the end of next year, although it has not hoisted the “for sale” sign over any other assets.
BP took a $38bn charge related to the Gulf of Mexico disaster. So far it has spent $14bn cleaning up the oil spill; paid out more than $8bn in claims; and agreed a settlement with the Plaintiffs Steering Committee – which represents affected individuals and small businesses – which is expected to cost the company another $8bn.
In the last two years, the company has pivoted to a broader strategy called “performing while transforming,” which is to say it’s going to keep the petroleum thing going and use that money to try some other green stuff.
Looking at the company’s 2022 annual report, it’s clear BP is doing both. While it’s easy to be super cynical and call this greenwashing, BP’s plan appears to be to freeze its upstream production of traditional hydrocarbons at about 2.3 mmboe/d (millions of barrels of oil equivalents per day) for the next few years and wind down to about 2.0 mmboe/d by 2030. Given where oil demand is going, this seems sensible (especially in light of the company’s divestment from Russian petroleum company Rosfnet).
At the same time, the company’s consumer division is expected to grow. The most serious sign that BP means what they say is the purchase earlier this year of TravelCenters of America for $1.3 billion. EV charging is a real estate and utilities game, more than anything. Placement along major traffic nodes with access to power is key and, while Tesla got an early lead on Electrify America, TravelCenters of America has about 280 sites primarily located on key highways.
With most major automakers in North America switching over to the NACS/Tesla charging standard, the $100 million worth of Tesla’s chargers makes a lot of sense. From the company’s press release:
The roll-out is planned to begin in 2024 and locations will include key sites across the bp family of brands, including TravelCenters of America, Thorntons, ampm; and Amoco, as well as at bp pulse’s large-scale Gigahub™ charging sites in major metropolitan areas and at third-party locations, such as Hertz locations, as part of previously announced collaborations. The first installation sites have been identified in Houston, Phoenix, Los Angeles, Chicago; and Washington D.C.
If BP is actually serious about offering a competitive charging experience as part of its diversification in the United States, it’s impossible to do that without NACS-style chargers, and who better to buy from than Tesla itself? Add that to the TravelCenters and it gives BP a huge potential leg up in the interstate/long-distance charging game.
This is the first time that a company that wasn’t Tesla has purchased Tesla’s superchargers for an independent network, but I doubt it’ll be the last.
There Is No ‘Magic Wand’ For Vehicle Affordability
Automotive News hosted a conference for dealers this week in Chicago called the “Automotive News Retail Forum: Chicago” and what it may lack in pizzaz, it more than makes up for in panels covering topics I am interested in.
Specifically, a panel made up of consultants and dealers talked about vehicle affordability (or the lack thereof). It’s pretty grim.
“Even if things do change, our clients will probably be in a negative equity position,” said panelist Lindsberg Pettway, floor manager at Feldman Chevrolet in Livonia, Mich. “I think we will be here for a while.”
That strain is compounded by a rise in “cutting in the portfolio on the entry level,” said Augustin Wegscheider, managing director at Boston Consulting Group.
Yup, affordable models are on the way out, to be replaced by… nothing? It gets worse:
“I teach my salespeople to be transparent and to show the customer the rate. And if they come in with their own lender, we show them what their lender is giving them,” Pettway said. “So that takes the spookiness out of the deal.”
In the long term, there will be no “magic wand” to fix affordability, Wegscheider said. Instead, it will take an intentional intervention on the portfolio level by automakers, he said. However, that intervention likely will have to wait for the EV market to develop.
It’s gonna be a long wait.
Also, should I have gone to this? Sounds like my kind of party. Maybe next year.
Tesla Raises A Price In China
It turns out I can’t embed Weibo posts (Weibo is China’s equivalent of Twitter/x, but probably less accommodating to propagandists). After numerous price cuts, it looks like the price of the Model Y High Performance is being raised bout $2k, at least according to Tesla’s official Weibo account. It’s been a while since we’ve seen a Tesla increase, so this is newsworthy.
Ford Misses Q3 Earnings, Estimates Loss Of $1.3 Billion From Strike
Ford’s got a tentative deal with the UAW and Q3 revenues rose 11% to $44 billion. Good news, right?
Not quite. According to the company’s Q3 filing, the company is withdrawing its profit guidance for 2023 and the company’s adjusted earnings per share of $0.39 was lower than the $0.45 per share expected by analysts. The reasons? Ford points to the strike, EVs, and lingering quality issues.
On the strike, Ford’s CFO John Lawler said in an earnings call:
In the third quarter, the strike had an EBIT impact of roughly $100 million, and so far, the strike has trimmed about 80,000 units from our plant. This would reduce 2023 EBIT by roughly 1.3 billion.
Morgan Stanley analyst Adam Jonas also asked about hybrid vehicles and the margins they offer and I thought this was interesting:
There’s added costs as you’d expect for the battery and the motors, etc. But if you look at — let’s just take F-Series, for example. If you take the hybrid on average, they have a higher margin than our highest-volume gas versions because of the mix and what we have in the vehicle and the pricing we can get for the hybrid technology and the fuel efficiency that comes along with that. And one of the things we learned about hybrid, because we’re executing very differently than our first-gen hybrids, is we have Pro power on board.
We have a lot of other attributes that people are willing to pay for, you know, like F-150 powering a jobsite or your house as back up energy. That’s another advantage of having those batteries that maybe some of our competitors haven’t had the same pricing power. The F-150 now, a hybrid, is up 40% year over year, and we think the new F-150 new hybrid will be 20% mix, and it may be the best-selling hybrid in the United States. So, our hybrid strategy is a little different than our competitors because the work cycle for our products are different, but hybrid has a really big place.
We’re trying to challenge ourselves, Adam, to execute hybrids, so they do more than just propel the vehicle for pricing power.
I will say this until I’m blue in the face but: Hybrids have huge potential in the market and it’s where Toyota, Honda, and Ford can be extremely competitive.
The Big Question
How long is your memory for disaster/scandal? Did you stop going to BP stations? Did you stop buying Firestone tires? Did you drive past VW dealerships? Do you vote with your pocketbook?
I’ve thought for a long, long time that it was silly that charging stations were not as plentiful or accessible as gas stations, and that would be a huge detriment to the widespread adoption of EVs. Hunting down the bougie Target in town that’s way off the arterial road or highway or whatever is far, far less convenient than, like, pulling off the road at the prominently advertised station that has several competing stations on the same intersection/exit. Makes perfect sense for an energy company to get into, y’know, another sector of an industry it’s already in.
As for boycotts… man, I dunno. I used to care more about BP until I realized that oil is oil and tracking it from the drilling end to the consumption end is basically impossible, just like any other commodity. You’re basically paying for branding by the end. So while they’re not my first choice, if there’s no other choice, sure, whatever.
The whole idea of the dictum of “there’s no ethical consumption under capitalism” is that even your best choices are tainted, so there’s no reason to get terribly upset when your limited choices are shitty. You can minimize your impact with ethical choices, but you’ll never be able to fully absolve your own contribution to the problem, because the problem is baked in before you ever get to make your choice. So everyone’s line is gonna be different. I don’t want to shop at Walmart, but thanks to availability and financial constraints, it might be the only viable choice for certain things. I don’t like Amazon, but they’re the largest bookseller in the world for independent/self-publishing authors. Tons of my friends and family members work in the music, movie, or TV industries, all of which are terrible from a corporate point of view, but the only way to get wide distribution that actually pays some amount of money.
So while I try to make the best choices I can as a consumer… eventually reality kicks in. I take my alternative choices where I can, but sometimes that alternative doesn’t exist, or isn’t actually viable, and that’s not within my control. So I don’t worry about it. Would I buy from BP or VW or Dupont or whatever? If I have an alternative, nah. But if I have to, I’m not gonna get upset about it. And even if I don’t, it’s entirely possible that someone in the chain of the product I’m getting did work with a company I don’t like and I’ll never know. It’s not so much that I don’t care, but that my level of choice in the matter is… we’ll say “variable.”
You can take your pragmatism and shove it! If you’ll excuse me now, I’m off to go glue my hand to the wall of an art gallery and shout ‘NO OIL’ over and over. You know, something that makes a difference!
/s
The people who did that were paid by oil companies to make environmental activists look bad btw.
> bougie Target
Brand new phrase
There are definitely tiers to Target locations, and you can usually tell by which ones have Tesla chargers in their lots.
Here in north Alabama, BP is virtually nonexistent. They sold off their chemical plant in Decatur and most of the gas stations became Marathons or just closed entirely. I think it might be like that in the entire state.
I can never forgive GM for what they did to SAAB.
Neither can any of us, my friend
I feel the same way, but I also have a Bolt and a Silverado. I guess I’m just a self-hating Saab fan D:
Uber’s scumminess has always turned my stomach too much to use them. A couple times I’ve had a friend or colleague order one and I’ve hopped in. When I have followed up and asked what the ride actually cost, I’ve been surprised to learn it was basically the same as the cab I would have taken otherwise. I guess novelty is enough for people to overlook corporate ethics.
At first the selling point was the app based convenience factor. Well, that and the lie that you were “ridesharing”.
Cabbies are treated so much better? I’m not defending Uber by any means. But both groups of people are treated like crap. Unless the cabbie is a medallion owner, then they’re just in debt for $1M.
The way drivers are treated is one part of the equation and you are not wrong. On the other hand, I can say with confidence, but not certainty, that the executive management of Toronto’s largest cab company, has likely not used share holder money for hush payments to their sexual harassment victims or bribed or illegally lobbied regulators to let them behave as they please.
It’s true I’ll never forgive Ford for what it scandalously did to Shawmut in the 1909 Ocean to Ocean Automobile Endurance Contest but that hasn’t stopped me from having owned eight Fords, equally divided between the 1959 and 1965 model years. For my next purchase I’d still rather have a Shawmut, though.
this is a fascinating comment because I don’t know anything about what you posted
I tend to avoid BP unless deparate. I associated them as bad for so long I forgot why but the feeling is still there.
Not many if any BP stations in my area. Never shopped at firestone to begin with, never will. Would never buy a new VW to begin with.
Do I vote with my wallet, of course. Who doesn’t.
The Big Question: I’ve got a pretty good memory of what not to buy. However, I’m so tired of having to track all the reasons I’m supposed to/not supposed to buy something from someone. And what good does it do to say anything, because you just become “that guy/gal.”
I’m not sure I would have ever considered a VW product before, so they weren’t getting my money anyway. Is Dieselgate unequivocally worse than supporting Henry Ford or Elon Musk? Is BP truly that much worse than any other oil company? Sure there are a couple big, headline issues, but what don’t we know about Marathon? Exxon? Shell?
So, long answer short, yes, I try and vote with my wallet, but I’m not perfect about it. We should all do our best to support those companies who do right and put good out in the world, and the rest just has to be what it will be. If you can do better than that, show me the way!
I once read (maybe it’s BS, I dunno) that Harley-Davidson makes more money on the sales and licensing of H-D merchandise than it does by actually selling motorcycles.
Maybe it’s been Musk’s plan all along to sell *charging* and not actual cars. I mean, if every EV is using Superchargers, and Tesla makes a penny or two per kWh, they’re gonna make a LOT of money.
Not sure about H-D, probably true, but I’ve heard the same thing about Ferrari.
As for Tesla, I believe a big part of their insane stock valuation (albeit, slightly less insane after this week) is the Supercharger network along with their battery gigafactories. I don’t think any educated investor would genuinely expect Tesla to surpass Ford/GM/Toyota/etc. in total vehicles built and sold. It’s the other infrastructure around the shift to EVs that Tesla can really make money long term.
Most musicians make a living selling t-shirts at shows, not music.
I’ve always thought of Harley as a lifestyle brand that happens to also sell motorcycles.
Voting is for liberals. I prefer to throw a tantrum and lie about everything being stolen from me to get my way.
I have steered clear of BP since their fuel started causing injector issues in the late 90s. They never admitted it but anyone that spent time servicing cars knew about it. BP figure figured it out without admitting anything and the issue went away. But, my reluctance to go there never did. Habits I guess.
Here is a comprehensive article from this morning’s Detroit Free Press that talks about the strategies of GM and Ford going forward on how they are dealing with EV/hybrid manufacturing and reducing/delaying the full transition for as long as possible…
https://www.freep.com/story/money/cars/2023/10/27/forget-the-strike-the-real-crisis-could-be-a-lack-of-demand-for-evs/71291494007/
I don’t pay attention to many scandals but somehow Dieselgate stuck with me. 911 was a dream car but I didn’t want a 911 after that. I can afford one now but probably won’t consider a Porsche or any VAG ever.
I am actually completely surprised more places that currently fuel with Gasoline have not purchased or came up with their own proprietary charging stations. Casey’s, 7-Eleven, Buc-ee’s and more live and die on how much time you shop when you stop for gas now. imagine if the masses had to mill around for half an hour or more. Also imagine if those people did not have to download an app to pay for the charge up….then also remember their does not currently seem to be any restrictions on how much is charged per KWH, so until the other big companies start following suit the first adopter gets to charge a penny below Tesla’s rates, which in the end is kind of close to the price per mile for gasoline at this time.
Just drove to Dallas and back this past weekend and stopped at the Buc-ee’s in Temple. They had about 20-30 superchargers there (only a few in use at the time). Another, much smaller travel center in Hillsboro had about 10 superchargers, almost all in use while we were there.
The travel centers know the value of luring in (usually well-to-do) EV owners and the change is happening.
Of course, if your car doesn’t support NACS, then it looks like you are SOL.
*cries in David Tracy*
RE: BP- did I stop going to BP stations? No, because if I stopped going to gas stations of companies that had major environmental disasters… I would have to avoid all of them. Deepwater Horizon is simply the latest in oil company fuckups, but it’s far from the only one. Exxon Valdez, Shell Nigerian oil spills, the list goes on.
RE: vehicle affordability- the ‘Rona hammered home a point I had been making for a while to my friends and family, which is that for 2000-2020 physical consumer goods were dramatically underpriced for what they were (I work in aerospace, where things were… not underpriced). There are a couple of big contributors to this phenomenon, the most obvious is the widespread availability of ultra-cheap Asian manufacturing where any number of external costs (labor laws, environmental regulations, IP protections) never had to be paid. When global supply chains were thrown into chaos, all of those external cost “savings” came home to roost, and the true cost of manufacturing goods started to become apparent to the consumer. Long story short- prices will not go back down, and frankly they shouldn’t. If you’re going to give a damn about things like safety, the environment, and workers rights, the modern automobile really cannot be manufactured at the bargain-basement prices they were for the past few decades. In an ideal world, cars should not be necessary and should really be a luxury item. The question is how do we manage that transition so we don’t fuck over the working class who rely on their cars to get to their jobs/go on vacations.
I heard it once said that the average lower class westerner lives better than royalty did in the 1800’s. There was a story on local media the other day with a couple complaining about the cost of living and how they need to cut back to one vacation per year and not dine out every week. In the background was a mc mansion, presumably the house they were struggling to pay the mortgage on. Perspectives are so far out of whack, I think people are going to have to get used to a lot of unhappiness (or learn what happiness actually is).
This is true in many ways, but not true in surprising others.
Agatha Christie reflected that in middle class London in 1919, she couldn’t imagine being poor enough not to have *two* servants, but that owning a car was only for the rich. The relative change in cost between human labor and goods over the last century has thrown all kinds of things out of whack.
https://www.fullstackeconomics.com/p/why-agatha-christie-could-afford-a-maid-and-a-nanny-but-not-a-car#:~:text=In%201919%2C%20Ford's%20Model%20T,seem%20totally%20out%20of%20whack.
That relationship still holds in certain circumstances. Our cat has two servants but we’re pretty sure he can’t afford a car, although come to think of it he sometimes takes a rather proprietary attitude towards what I had assumed were mine:
https://live.staticflickr.com/7902/33155882908_602fcb2b4e_c.jpg
A dog sees these large creatures who love and dote on her and thinks “these creatures must be gods.” A cat sees these large creatures who love and dote on her and think “I must be God.”
I’ve been anti-BP since they started fucking up the Middle East in the early 20th century.
You’re older than I am.
I have a very long memory. Too long—nearly every corporation has earned/earns a ban at some point and I can’t make everything for myself (as much as I’d like to), so I just pick the most egregious players out, spend as little as possible, and build what I can.
What are the chances Ford will buy back their stock for $5 billion in the next 48 months, right before the union contract renewal and say they’re broke?
The quote from the Ford guy on Hybrids is great insight. I shopped a Powerboost and the Pro Power is a compelling feature. Most homes in my area have backup generators, but they aren’t cheap. For the rare times we lose power, having a generator on the truck is a real value add.
It’s interesting, while the US is overall a very rich contury, economic disparity is highly varied, in a similar way, (wrt power generation & availability), in some parts of the US power failures are exceedingly rare. In other parts, even bougie burbs (ex: Farmington, Birmingham, Southdale) of Detroit have semi regular power failures enough that home generators are common.
>“I teach my salespeople to be transparent and to show the customer the rate. And if they come in with their own lender, we show them what their lender is giving them,” Pettway said. “So that takes the spookiness out of the deal.”
If my eyes rolled any harder, they would fall out of my skull.
I do agree with this generally, but I bought a RAM truck from Feldman CDJR about 2 years ago, and they were decent to deal with (as good as any new car dealer I’ve dealt with). Everything was clearly laid out and they didn’t play any major games. They took a no from me pretty easily on all the extra stuff that dealerships always sell. I brought my own financing 2 years ago (1.75% from my credit union) and they ran it through that credit union and got that rate for me. I run fast from any dealerships that play games, but I’ve managed to find a few over the years that don’t suck to deal with.
When I bought my used RAM, I walked in with a pretty good rate (3.25) but the dealer was able to get me 2.75 with a different lender. Also pretty good about asking for extras – they asked about a couple, I said no, and we went about our day.
Electrify Britain 😀
Mitsubishi raised Mirage prices because they can. They raised the price as the competition disappeared. No more Spark, Sonic, Fit, Yaris, Mazda2, Accent, or Rio.
You could get a Mirage brand new under 10k a few years ago, and now they’re pushing 20k. Unfortunately, the car companies are so insecure and jealous and think they’re stealing sales from bigger, more expensive cars, when really they compete with used cars, thus being free customers/sales.
I have rarely gotten gas from BP since the Deep Water Horizon. Like maybe 5 times. I haven’t ever purchased Firestone tires but have purchased Bridgestones for autocrossing.
I rarely get gas from BP because I don’t see their stations around anymore.
My memory for companies that have hurt me *personally* is long.
My willingness to boycott or “vote with my pocketbook” on society-wide issues is pretty small, mostly because I believe all of them engage in basically the same behavior and the ones we hear about are just the ones dumb enough to be caught. It would be exhausting trying to keep up with who is “good” and who is “bad”, so I just don’t bother.
If Doug Forcett couldn’t get enough points, I’m not even trying.
I was waiting on a TGP reference! I almost made it in my top-level comment, but wasn’t sure how many would get it.
Good work! 🙂
Did you mean the Chinese equivalent of X/Twitter?
Glad I wasn’t the only one to catch that.
It was a mistake, although the joke still almost works.
Is the joke the idea that people hate Musk so much that they would think Weibo, a partially state owned company in a country that has an official Department of Propaganda is somehow more free and open than twatter? ‘Cause that’s a funny one…
I post winnie the pooh tweet, no one cares. I post winnie the pooh on weibo, my family gets a bill for one bullet.
Glad someone caught that.
It’ll be interesting to see if Tesla’s superior charging network is superior because of the hardware or if it’s because Tesla is actually better at basic things like maintenance.
As far as BP goes; why reinvent the wheel here. Tesla clearly has the best charging network out there; everyone seems to be moving towards NACS; maybe the secret is the hardware. Buy, buy, buy.
Whatever the case, this seems like a clear win for consumers. Keep building on NACS and hopefully the last few (brand) dominos will fall and everyone in North America will be on NACS.
I think a big part of it is the hardware design, Tesla chargers don’t have card readers or even screens I don’t think. Also Tesla can use starlink for it’s internet connection for transactions, not sure what the percentage is for no network/broke screen/reader on when non-Tesla chargers are ‘down’, but it certainly reduces the amount of things that fail. Flip side is you can’t just roll up, tap your card and start charging, gotta have the payment setup already before you roll up, or gotta get the app while there, gotta have cell service to get the app, etc.
Tesla chargers require no screens and no card readers and perform their transactions so quickly even without stable internet because each supercharger stores a list of every Tesla owner and can just “add it to their tab” later.
(Sidenote: while this system is efficient, it is a security vulnerability and severely affects salvaged or out-of-network vehicles.)
no kidding! Is there an article on how they implemented this payment system? I am geekily curious.
Well, if they are at the Gas Stations then there will be internet anyway. The station just creates a guest wifi account if needed. No need for cell service. Also, if you own an EV and you are on a road trip you are gonna have the app anyway.
Just looked it up, actually…
https://www.ta-petro.com/amenities/interstate-speedzone
Non-Tesla EV charging stations would almost certainly be more reliable if they just had card readers and screens like a normal gas pump. Instead they have one of a multitude of shitty mobile apps that frequently don’t work. A big reason Tesla is more reliable is that they have one app built in to all of their cars that works with all of their chargers. Since that’s unlikely to be the case for the third parties, I remain dubious that changing standards is going to fix the systemic problems with non-Tesla charging infrastructure.
ChargePoint sets up a digital card in your apple wallet. Wave it at the charger & start charging. Easy-peasy.