How gas station economics will change in the electric vehicle charging future

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As electric vehicles become more popular, some gas stations make costly renovations to include EV charging stations. In most cases, the traditional liquid fuel pump is not being replaced. But select locations, including an RS Automotive in Takoma Park, Md., and a Shell station in Fulham, England, have made a full switch.

Location, cost, power requirements and conversion time are among the multiple considerations that factor into a gas station’s decision to convert all or a portion of their existing infrastructure to allow for EV charging.

“It can be difficult to figure out how to implement this in an active location,” said Neha Paler, CEO of TeraWatt Infrastructure. The company is building a network for electric vehicle charging stations across California, Arizona and New Mexico. How do you plan the construction of a charging station when there are vehicles nearby that may want to fill up?

Here’s what gas station owners need to know about the EV charging trend and their future.

The EV fast-charging model

Locations like office complexes, hospitals and hotels typically offer a slower charging option, since people generally stay put for hours at a time. Gas stations are investing in Level 3 charging stations that are more powerful, and can charge a vehicle in as little as 20-30 minutes. Big oil companies and car dealers have jumped on board.

Adding EV chargers to large oil giants’ networks is a defensive as well as offensive move. According to Shubhendra Anand

, vice president of Market Research Future, the number of gas stations has been declining at an alarming rate over the last three decades. This trend is expected to continue into the future. According to the Biden administration, it is their goal to have 500,000 chargers nationwide by 2030, where at least 50% new cars are EVs. By current administration estimates, there are more than three million EVs and more than 130,000 public chargers nationwide.

The European oil majors are among the energy sector leaders in the global EV charging push.

Shell

has EV-charging-only mobility hubs in China and the Netherlands, in addition to the Fulham location. The company intends to own more than 70,000 public EV charge points worldwide by 2025, and 200,000 by 2030, according to an email statement from Barbara Stoyko, senior vice president of mobility for Shell Americas.

BP also sees the need for mixed-use hybrid refueling and EV charging stations, according to Sujay Sharma, chief executive of BP’s electric vehicle charging business in the U.S. “Today’s gas stations are well positioned to adopt EV charging due to locations in high-demand areas, in addition to their existing convenience offerings including restrooms, food and beverage,” Sharma stated in an email.

Franchise car dealers are also increasingly getting on board, thanks to pushes from automakers like

GM

and Ford

.As of late last year, 65% of Ford’s dealers had opted into the EV certification program (a little under 2,000, according to data shared by Ford), as it has started to make the role of car dealers central to the EV transition process. The National Automobile Dealers Association stated in a release from May that franchise owners would spend approximately $5.5 billion across OEM brands on EV infrastructure, with costs per store ranging between $100,000 and over $1 million. The upfront costs of EV charging can be staggering, but incentives are available to help offset them.

Adding the capability for EV charging is not something that should be taken lightly. Michael Hughes, Chief Revenue Officer of ChargePoint Holdings a technology firm that produces EV charging software and hardware to help drivers locate local charging stations, says the hardware can cost between $50,000 and $500,000, depending on how many fast chargers are needed. He said that the infrastructure costs are usually twice as much, including the cost of breaking the ground, running the power, and hiring contractors. His advice is to invest as much energy as you expect you will need over the next 10 years. There are many federal, state and utility incentives available for businesses to install and purchase fast chargers. The U.S. Department of Transportation’s Federal Highway Administration NEVI Formula Program provides generous funding for states to strategically install EV charging station. Gas station franchises are concerned about location, which is key. Hughes stated that according to the U.S. Department of Energy 80 percent of electric vehicle charging occurs at home. This makes adding EV chargers less attractive for gas stations in towns. Local gas stations also don’t generally have amenities to keep people entertained while they are charging their vehicles.Real estate can also be prohibitive. Hughes explained that gas stations located along highways, between popular destinations, are ideal electric charging hubs. These stations offer a variety of amenities, including the opportunity to get a cup of coffee, eat a quick meal, stretch their legs or walk their dog while charging. These locations tend to have multiple amenities, offering people the opportunity to grab a cup of coffee, get a quick bite to eat, stretch their legs or walk the dog while they charge their vehicle, Hughes said.Convenience stores like Sheetz, Wawa, Royal Farms and Buc-ee’s that double as gas station operators are also starting to add electric chargers at certain locations, said Albert Gore, executive director of The Zero Emission Transportation Association, a federal coalition that advocates for EVs, and who is a former Tesla and SolarCity executive. Gore says that it can’t just be “a place where you run in to buy a Snickers.” His company has more than 150 gas stations in convenience stores and provides electric charging at select locations in Florida. The company, which has over 60 gas stations in Arkansas, has not installed any EV charging stations. “We are not going to flip a switch and have all gas cars off the road. “