A prominent oil and gas producer has made a significant investment in electric vehicle (EV) charging infrastructure. British Petroleum (NYSE:BP) has announced that BP Pulse, the EV charging arm of its empire, will be making an important purchase from Tesla (NASDAQ:TSLA).
Under this agreement, BP Pulse will purchase $100 million worth of ultra-fast charging hardware units from the EV leader. This marks the first time that an outside company has opted to use Tesla’s hardware for an independent network of chargers. In theory, this is good news for both companies but neither BP nor TSLA stock has reacted particularly well to the announcement.
Although both stocks are struggling today, that doesn’t mean that this development is not significant. On the contrary, it could help both companies in the long term and provide investors with a key incentive to bet on BP, an industry leader that can now offer exposure to multiple energy markets.
What’s Happening With TSLA Stock
It’s been a highly volatile week for TSLA stock, and things don’t seem to be improving today. As of this writing, it is down slightly on the day. However, it should be noted that today’s announcement isn’t causing a decline. The company is still recovering from an onslaught of bad news.
Ever since the company reported disappointing Q3 earnings last week, shares have been slipping. The more recent news of a Department of Justice (DOJ) probe has only made things worse. In fact, the BP deal is the only positive announcement Tesla has seen in some time. The company is facing a highly uncertain future as it enters the year’s final quarter, and some Wall Street analysts are beginning to sour on it.
While Tesla’s chargers are slated to be deployed across BP’s network in 2024, the company did not specify an exact date. Drivers can expect to see them start popping up at BP brands such as Travel Centers of America, Thorntons and Amoco. The company’s current number of EV charge points exceeds 27,000. By the end of the decade, it plans to expand this number to 100,000 across the globe. Accomplishing such a feat would be a significant step forward for EV charging infrastructure, incentivizing more consumers to make the switch to driving electric. However, it could also prove crucial for companies that are expanding into EV fleet shipping
The Road Ahead
BP Pulse Global CEO Richard Bartlett issued the following statement in response to the Tesla purchase:
“Strengthening the bp pulse network with Tesla’s industry-leading hardware is a major step forward in our ambitions for high speed, open access charging infrastructure in the US and advances our ambition to delivering an exceptional customer experience. Combined with our vast network of convenience and mobility sites on and off the highway, this collaboration with Tesla will bring fast and reliable charging to EV drivers when and where they need it.”
This large-scale purchase from an industry leader may not do much for TSLA stock, unless more companies follow BP’s example. However, the expansion of the charging network will likely be an excellent catalyst for BP stock in the coming year. While Tesla’s future remains uncertain, BP seems poised to continue its expansion into the clean energy market, demonstrating an important willingness to adapt.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
