Electric vehicles are hot, at least with auto manufacturers, which are increasingly pushing into the space. Eventually that's expected to lead to a huge increase in the number of EVs on the road, even though only about 9% of global auto sales were electric vehicles in 2021. Still, that was a fourfold increase over the share EVs held in 2019.

All of these new electric autos need to be charged -- a fact that hasn't escaped the notice of European energy giants Shell (SHEL -0.16%) and TotalEnergies (TTE -0.25%).

Shifting gears

When oil demand and prices plunged during the early days of the COVID-19 pandemic in 2020, European energy companies were among those making hard decisions. Shell and BP (BP -0.37%) both cut their dividends and, at roughly the same time, announced plans to materially increase the size of their clean energy operations. TotalEnergies made the same business shift, but didn't cut its dividend. U.S. giants Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM) basically decided to stick with oil and natural gas.

A person looks at their laptop while leaning against an electric vehicle that is being charged.

Image source: Getty Images.

For long-term energy-company investors worried about a future that will increasingly include clean energy, the path of the European integrated oil giants should be pleasing to see. They are, basically, using their carbon-heavy businesses to adjust with the times; this includes projects like buying and building wind and solar farms. But there's also a more direct EV angle here.

One of the key foundations at TotalEnergies, Shell, and BP is their massive reach in the gasoline space. They not only produce the fuel, but they also have the storefronts that sell it directly to customers. These are prime locations for installing EV chargers.

Buying some exposure

But this isn't new for TotalEnergies, which started focusing on the space many years ago. For example, in 2018 it bought G2mobility, a leading provider of electric vehicle charging solutions in France. It increased its focus with the 2020 agreement to buy Blue Point London, the largest EV charging network in that city. Also in 2020 it added Charging Solutions, making TotalEnergies a big EV charging operator in Germany. And in 2021 it bought Bluecharge, a large charging-point operator in Singapore.

TotalEnergies is clearly focused on gaining scale quickly in the EV charging space. That should help to augment its already strong footprint in gasoline, and perhaps give it more name value as it looks to merge the two lines of business. For example, the company notes that it is looking to add charging points to its 500 or so European gas stations, resulting in at least 1,000 charging stations along key motorways, one every 150 kilometers (93 miles).

Shell is no slouch here either. It bought the largest EV charging network in the United Kingdom in 2021 and acquired Cable Energía, which operates in Spain and Portugal, in July 2022. Again, that should help it push into the EV space and help it expand the services offered at its current gas stations.

These are just notable examples of the efforts being made by Shell and TotalEnergies; they aren't exhaustive. And, to be fair, despite what might sound like aggressive investment efforts, EV charging is still a small business for both of these energy giants right now. But it is the long term that's important, because EV charging will allow Shell and TotalEnergies to capture revenue that would, otherwise, go away as customers move from vehicles powered by combustion engines to ones that use electricity. This isn't just a side business, it is a way to prepare for a future that is likely to, eventually, look very different from today.

While the financial benefit may be modest at this point, the benefits are likely to snowball over time as the companies build experience, their brand images, and hopefully, loyalty among customers. 

While BP is following a similar path, TotalEnergies and Shell both have stronger balance sheets, with debt-to-equity ratios of 0.5 and 0.4, respectively. BP's debt-to-equity ratio is a much higher 0.8, even though it's been benefiting from high oil prices. Its European peers are just better positioned to spend the money needed on the EV front.

Yield or dividend growth?

TotalEnergies and Shell are not interchangeable investments. TotalEnergies stock has a generous yield of roughly 5.1%. Shell's dividend yield is just shy of 3.8%. Shell's dividend cut is clearly part of the story here, though that reduction has given it more leeway for dividend hikes, which have been fairly generous over the last couple of years.

So, if you're interested in owning an energy stock with strong EV credentials, TotalEnergies is the high-yield play and Shell looks like the dividend-growth option. But the best part is that both will continue to use the cash they generate from the still-large numbers of gasoline-fueled autos to fund their ongoing, and perhaps advantaged, pushes into the EV space.