Back to articles

Infrastructure

Why innovative gas stations have EV chargers

August 24, 2021 | Joseph D. Simpson and Wesley van Barlingen

It’s no secret that electric vehicle (EV) adoption is booming: there are millions of EVs on the road today and by 2030, the number of electric cars, vans, trucks and buses on the world’s roads is predicted to increase to 145 million

With the rise of EVs, customer behavior is changing as well—more drivers are refilling their electric “tanks” at home and at work. Additionally, growing demand for electric vehicles could erase the need for millions of barrels of oil—up to 2 million barrels a day—if climate policies remain as is. 

This trend presents a significant challenge for gas stations worldwide: According to a Boston Consulting Group study, without significant changes to their business models, at least a quarter of service stations worldwide are at risk closure by 2035.

For fuel retailers, this turbulence could also present a unique opportunity to get ahead. With more EVs on the road, the need for fast and reliable EV infrastructure is growing exponentially. As a result, the fuel retail sector is perfectly positioned to harness their existing locations to capitalize on this market shift. 

This article highlights why forward-thinking fuel retailers are tapping into EV charging—and especially high-powered DC charging stations—to adapt to this market shift.

Three waitstaff working in a modern gas station by the highway

Gas stations have always adapted to changing consumer behavior to prepare for the future

The modern fuel retail sector evolved out of constant adaptation to market and regulatory shifts. At first, every pump was manned due to fire hazard fears over self-fuelling and combining gas pumps with groceries was foreign concept. Then as the rules were relaxed through the 1960s, the modern gas station/convenience store was born, and over time, services ranging from snacks to car washes were introduced.

Today, fuel retail is a cornerstone of the modern economy. In the US alone, convenience stores account for roughly 80 percent of all US fuel sales and 4.5 percent of GDP. And according to a McKinsey & Company report, on a global level fuel retail is “one of the more resilient segments in the oil and gas industry.”

However, as the years have gone by, fuel retail has come under increasing pressure. To name a few; low net profit margins on gas, environmental concerns have brought the fuel retail sector’s main product into question, and the recent prediction shown (in the same McKinsey & Company cited above) that demand for fuel retail will slowly decline across mature markets—from $87 billion in 2019 to $79 billion in 2030.

Yet, despite “new mobility” being a cause of this slowdown, ironically it’s electric mobility, and the changes with which it will bring, that present some of the greatest opportunities for modern gas stations in the 21st century.

A stream of lights coming from vehicles on the road at night taken by a camara with a slowed shutter speed setting

There will be many more EV drivers on the road in the coming 20 years

While today, the shift from internal combustion engine (ICE) cars has been dominated by a handful of early adopters, in the coming two decades, electric vehicles are set to become the “new normal” in terms of transportation. Three sectors—private passenger vehicles, business fleets, and original equipment manufacturers (OEMS)—account for the vast majority of this growth.

Private passenger vehicles

Private citizens are a driving force in the transition to electric mobility. According to a Bloomberg report, EVs and other zero-emissions vehicles could account for two thirds of new-vehicle sales in developed markets by 2040. With new economic or policy initiatives put forth by global governments, this number could even grow.

One of the main technological developments which enables this growth outlook is the advent of fast charging. Today many potential EV drivers cite “range anxiety” or the uncertainty about finding charging stations, as the main barrier to opt (again) for an EV. As fast charging technology can charge an EVs battery in minutes versus hours, networks of fast charging stations are popping up across highways and towns on both sides of the Atlantic.

As a result, drivers' fears about not being able to charge are dissipating and we predict that this will only further accelerate the electric mobility transition.

Business fleets

Just as consumers are becoming more open to EVs, businesses and governments are ramping up the electrification of their fleets. Whether due to voter, consumer, or shareholder pressure, many organizations are looking towards the electrification of their fleets to meet climate pledges. 

To name a few, IKEA, Amazon, UPS, and Uber have all announced fleet electrification to proactively address the climate crisis and meet their emission reduction targets. This trend will also accelerate electric mobility adoption in the mainstream population—creating second-hand opportunities, growing the technical support ecosystem, and increasing availability with lease companies. 

This is especially significant as, during the pandemic, we saw a downturn in the use of private vehicles due to stay at home orders. Combined with existing trends in sharing economy and ecommerce, these social shifts have made business fleets an integral part of the electric mobility transition.

Original equipment manufacturers

What’s more, OEMs are planning to release around 400 new EV models onto the market by 2025, demonstrating their commitment to ramping up EV production. What’s significant here is that for many of these models, the price premium is expected to be consigned to history sooner rather than later—bringing the tipping point for EVs even closer.

And then comes the Tesla paradox. While OEMs have traditionally only produced the vehicle itself, Tesla’s expanded Supercharger offering has caught fuel retailers off guard. Because the company owns its own charging network, Tesla has the ability to own more of the transportation value chain. And Tesla isn’t alone: other manufacturers are making moves to position their charging platforms as viable alternatives.

Fuel retailers are stepping up their game to avoid the risk of handing over their customers to OEMs entering the EV charging market.

red-dot-iy8h-Cl8MLc-unsplash

The need for a fast charging infrastructure has never been more urgent

Together, the rise of EVs for private drivers, advancing fleet electrification, and OEMs’ focus on the electrification of their pipeline create a telling tale: of the massively growing need for charging infrastructure.

As vehicles and driver’s behaviour change, the need for reliable and accessible EV charging infrastructure has never been more urgent. 

Adding to the pressure, governments are increasingly turning their attention to EV charging infrastructure. In three of the largest fuel retail markets in the world (US, EU, and UK), governments are making increasingly large commitments to financing EV infrastructure. For instance:

Combined, action to reduce carbon emissions, global shifts in consumer habits, and the growth of the electric mobility ecosystem tells a tale of the scale of the change at hand. And as a direct result, the EV-charging value pool is expected to rise from negligible today to $20 billion by 2030, according to McKinsey & Company. This represents an opportunity for fuel retailers to get ahead of the pack and capture growing consumer demand.

Gas station at nights showing different pumps

What DC charging stations means for fuel retailers

Fuel retailers are perfectly positioned—both in terms of on the road as well as on the market position—to capitalize on this shift towards electric mobility. 

This is especially true with the introduction of high-power, DC charging stations to the market. Whereas EV drivers may be able to charge at home or at work, these charging stations are likely to be far slower than DC (or Level 3) charging stations which can charge an EVs’ battery in minutes versus hours. As mentioned above, the rollout of these charging stations is likely to increase the pace of the electric mobility transition. This presents a unique opportunity for fuel retailers to get ahead and gain more customers.

What’s more, following our research, 36 percent of current EV drivers already charge their EVs at gas stations and a further 21 percent would like to if the option was available. With their existing infrastructure in prime locations, fuel retails can capture this affluent and growing market.

Why gas stations should convert to and offer EV charging today

Modern gas stations are perfectly positioned to offer EV charging infrastructure today and maintain their dominant position in society. 

Gas stations with EV charging stations can attract new, affluent customers without any solidified brand loyalty that stay longer, spend more and return often. Fuel retailers can increase revenue thanks to more upselling opportunities in convenience stores and from charging stations themselves. 

Fuel retailers can also improve their sustainability reputations by offering a green alternative to emission-heavy fuel alternatives—nipping negative pressure from consumers and authorities alike in the bud before it arises.

Lastly, the shift towards electric mobility gives rise to both new independent actors (Charging Point Operators or CPOs) and OEMs (like Tesla who not only own the vehicle, but the charging infrastructure as well) who are vying for a piece of the pie.

By investing today, forward-thinking fuel retailers are consolidating their position in tomorrow's mobility ecosystem.

 

Learn what fast charging can mean for your business

Read our free ebook to get a complete overview of all fast EV charging possibilities, their differences, and what fuel retailers need to look out for.

Download now

 

Back to top  

You may also like

Suggested

5 reasons why EV chargers boost employee satisfaction

Keep reading

You may also like

Suggested

Why more offices should have EV chargers

Keep reading

Share:

Related Articles

Article

Infrastructure

5 reasons why EV chargers boost employee satisfaction

Learn why adding EV chargers to your workplace will delight your employees for years to come.

Keep reading

Article

Infrastructure

Why more offices should have EV chargers

Learn why more offices around the globe are installing EV chargers, how they benefit the modern workplace and how they contribute to sustainability goals.

Keep reading

Article

Infrastructure

How long does it take to charge an electric car with Level 3 charging?

Discover how long it takes to charge an electric car with a level 3 charging station and which factors affect charging times.

Keep reading

Updates from the beating heart of the electric mobility industry

Updates from the beating heart of the eMobility industry

Subscribe to the EVBox Newsletter for the latest updates, articles, and opinions on all things eMobility