BP to Cut Over 100 Jobs in its EV Charging Division: Shares Down Today

BP's (LON: BP) share price has dropped by 1.99% this afternoon on a difficult start to the day all around for markets.

BP, one of the globe's leading oil and gas conglomerates, has recently undertaken a significant reduction of its workforce in its electric vehicle (EV) charging business, known as BP Pulse. This move sees the company cutting back over 100 jobs. This is more than a tenth of their worldwide roles of 900, a number of employees will be reassigned internally. BP are refining its focus and operational scope within the EV charging market.

BP Pulse, the EV charging arm of BP, manages extensive public EV charging networks, particularly prominent within the UK and Germany. However, BP's latest strategy involves narrowing its EV charging business endeavors to concentrate primarily on four key markets: the U.S., the UK, Germany, and China. This recalibration aligns with the firm's broader business objectives and reflects adjustments to market realities, particularly in the EV sector.

The tide of BP's corporate strategy has seen sharp turns with its stock initially dipping in response to the announcement of a net-zero strategy which demonstrated an increased emphasis on sustainable and renewable energy sources. Subsequently, BP made a strategic volte-face, dialing back on some of its ambitious sustainable goals, and announcing plans to reinforce its traditional oil and gas projects. This reorientation was crystallised in February 2023 when BP disclosed plans to elevate its investment in oil and gas ventures by up to $1 billion annually until the year 2030.

This restructuring has wider implications for the energy sector, especially in the context of the transition to low-carbon energy sources. BP's scaling back of BP Pulse hints at slower-than-anticipated growth within the commercial EV fleet segment than the industry had presumed. The company's pivot towards reinforcing its oil and gas investments may also indicate a broader skepticism within the industry regarding the near-term profitability and scalability of alternative energy ventures compared to traditional fossil fuels.

Certainly, BP's maneuvering within its EV charging unit resonates with the complexity of transitioning from a hydrocarbon-focused business model to one that accommodates the surge in demand for cleaner energy solutions. While acknowledging the significant potential of the EV market, BP's strategic adjustment suggests a cautious approach, ensuring robust oil and gas revenues while tentatively fostering its stake in the EV charging infrastructure.

The streamlining efforts being made by BP in the EV market has not dampened analysts' confident sentiments on the company's share price. Morgan Stanley has raised BP's target price from 610 GBp to 650 GBp, maintaining their Overweight rating on BP's shares.

Markets will be closely monitoring the impacts of BP's workforce reduction in BP Pulse, alongside its refined investment strategy, as indicators of the broader energy industry's navigation through a period characterised by fluctuating market demands, technological revolutions, and increasing environmental consciousness.