As part of its energy transition strategy, energy giant Shell plans to shed some of its retail locations, including gasoline stations, to focus more on EV charging sites.

“We are upgrading our retail network, with expanded electric vehicle charging and convenience offers, in response to changing customer needs,” Shell said in its 2024 Energy Transition Strategy report. The company plans to “divest around 500 Shell-owned sites (including joint ventures) a year in 2024 and 2025.” The company’s plans were first reported by Bloomberg News.

The closures will shrink the company’s retail footprint by 2.1%. In 2023, the company operated 47,000 locations.

Shell said it will need to find additional locations or expand the size of current Shell locations in order to boost its charging business. The company said it would spend more on public charging, as opposed to home charging initiatives that are more popular in regions like North America, because Shell believes public charging will be “needed most by our customers.”

Shell said it will be focusing its efforts more in China and Europe, where the EV market is more developed and demand is high for public EV charging stations. Shell says it aims to increase the number of charge points it has from the 54,000 it operates today to 200,000 by 2030.

Currently, Shell’s EV chargers are located at Shell filling stations, on-street locations, and at “mobility hubs” as well as other sites, including supermarkets. In the U.S., the company said its Volta charging acquisition completed in 2023 gave it one of the largest charging networks in the country.

According to Shell’s Recharge EV charging map, the company operates just over 3,700 charging stations in the U.S. with multiple charging plugs at each location. By comparison, Tesla offers around 6,000 charging stations with over 15,000 DC fast-charging plugs and several thousand more Level 2 chargers.

Despite a recent slowdown in EV demand in the U.S., Shell believes the energy transition globally is one worth investing in, with the company highlighting investments in China’s EV industrial base in Shenzhen as well as Wuhan. 

In the U.S., there are also pockets of opportunity in the charging business. For example, Blink Charging CEO Brendan Jones told Yahoo Finance on Monday that narratives of slowing EV demand within auto markets are countered by the fact that Blink is “still seeing growth across the [charging] segment.” Additionally, he points out that the “fleet segment is on fire,” and that apartment buildings and broad-base infrastructure projects adopting EV charging are “growing the fastest.”

Shell in turn believes owning and operating physical sites, despite a closure of some sites over the next two years, gives the company a competitive advantage and boosts profit projections.

“We have other competitive advantages, such as our convenience retail offering which allows us to offer our customers coffee, food and other convenience items as they charge their cars. As we grow our business offering charging or electric vehicles, we expect an internal rate of return of 12% or higher.”

Nathan Niese, associate director of electrification and climate change for Boston Consulting Group, believes retail operators like Shell may have the right strategy for charging.

“If you have the right street corners with the right amount of traffic and the right footprint, if you can turn over some of those existing stations that already have a convenience store, that already have a car wash,” Niese said to the Automotive News. “That’s a really good cocktail for business success.”

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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