What’s the Future of Gas Stations in an EV World?
A new forecast says the number of public fast-charging ports for electric vehicles will increase by 60-fold between 2022 and 2050 in the United States and Canada.
That growth rate, from the research firm Wood Mackenzie, is notable on its own. But it begs a question: What kinds of businesses will be hosting all of those fast chargers?
Will we be going to convenience stores like the kind that now sell gasoline? Or, will they be something new?
Before I go on, some basics:
There are three main levels of EV charging. Level 1 chargers can plug into an outlet in your house, and they may take a day or longer to charge an EV. Level 2 systems are an upgrade from a typical outlet, and they can charge an EV in a few hours; they can be installed at home with an outlet much like that of a clothes dryer, and also are common in public charging stations. Level 3 chargers, also called fast chargers, can do their work in the time it takes to eat lunch; they are mainly found in public stations like Tesla’s Supercharger network.
Most of the growth in public charging ports is going to be fast chargers, of which there are now about 30,000. Level 2 systems also will grow, but at a slower rate.
“Gas stations will exist, but will have a different kind of model,” said Amaiya Khardenavis, a Wood Mackenzie analyst.
And many of today’s gas stations will evolve into EV charging stations.
“Gas stations are prime real estate locations, so they are excellent candidates for installing charging infrastructure,” he said.
Nick Esch, a Wood Mackenzie analyst, described some of the competition taking place as companies try to secure the best locations.
“As EV charging networks are expanding their footprints, it’s important to realize this is not just a land grab, but a capacity grab,” he said.
By that, he means that fast chargers require a lot of grid capacity. A charger developer needs to work with the local utility to reserve enough capacity to be able to operate a station. If another developer wants to set up a competing station across the street, they may need to pay for grid upgrades to be able to have enough capacity.
While charging stations may occupy some of the same land as today’s gas stations and have other similarities, I don’t want to minimize the scale of the change that will be taking place.
The availability of charging at home and work means that the customers at charging stations will be less of a general population, and more people with specific needs. The main two categories would be people on long trips and those who don’t have access to charging at home or work.
Charging stations that serve people on long trips will be located along highways and clustered with restaurants, much like the patterns of development for existing gas stations. One difference is that a fast charger takes 20 minutes to an hour to get a vehicle to about 80 percent charge, which is a lot longer than it takes to fill up a tank with gasoline. So customers will have some more time on their hands and it would make sense if we begin to see more mall-like travel centers to serve people who are making longer stops.
The needs would be different in cities, where a variety of businesses are looking at neighborhood-based options, including chargers alongside public streets, to serve people who don’t have garages. One example is FLO, a charging company building curbside stations in New York City.
Tesla dominates today’s market for public fast charging, with about 17,000 ports in the United States and Canada, many of which are located on the grounds of other businesses, including convenience stores. Right now, the ports can only be used by Tesla vehicles, but the company said in February that it will open the network for use by other brands by the end of 2024.
The second-largest operator of fast chargers is Electrify America, a Volkswagen subsidiary, which has about one-fifth as many ports as Tesla.
EVgo ranks third, but is poised for major growth. The California-based company announced a deal with General Motors last year and the companies are working together to expand a network of charging stations, including at Pilot and Flying J truck stops.
Meanwhile, convenience store companies are making investments in EV charging systems that they own and operate. Alimentation Couche-Tard Inc., the Canada-based owner of Circle K stores, said last year that it plans to add EV charging at 200 locations in North America. Texas-based 7-Eleven said this month that it is starting a charging station network to operate at its stores; the company didn’t give specifics on a timetable or how many locations would initially get the charging hardware.
The transition to EVs is a source of trepidation for the convenience store industry, which stands to lose revenue and customer traffic that it now gets from selling gasoline. But it’s also an opportunity for the businesses that can figure out how best to sell products to the people waiting for their vehicles to charge.
I spoke with Eva Strasburger, who is closely monitoring this shift. She is a Texas-based veteran of the convenience store industry who co-founded the Vision Group Network, an organization that holds meetings to discuss major issues facing the industry.
“There (used to be) a lot of concern about how to entertain people while they are waiting to charge,” she said. “Several years ago, the question was would we be putting in nail salons and meditation centers and coffee shops. The reality, when we look at what people are doing, is that people get out, get something to drink, go back to their car and then they’re on their phones to catch up on emails.”
Her group hosted an event in January in which convenience store corporate leaders talked about the changes that the transition to EVs will bring.
“Nobody’s predicting that (the transition to EVs) doesn’t happen,” said Doug Haugh, former president of Parkland USA, a convenience store chain, at the event. “Everybody’s just arguing about the schedule. So, the schedule matters, because whether it’s 20 or 30 years or 40 versus 10 makes a hell of a lot of difference for all of us.”
“What we have to figure out is, how can we replicate, at least to some degree, that same level of convenience and service that our services provide today?” he asked.
Other stories about the energy transition to take note of this week:
EU Ministers Pass 2035 Car Engine Ban Law: European Union ministers have signed off on legislation that phases out sales of polluting cars and vans by 2035, as Joshua Posaner reports for Politico. The deal was able to come together thanks to a backroom deal between the European Commission and Germany that will allow the use of “e-fuels,” which are synthetic alternatives to gasoline. The legislation still has several steps to go in its approval process. Germany’s intervention to try to help its auto manufacturers is a recurring theme in EU policy discussions about transportation emissions, as I reported in 2020.
Wind Industry Predicts Bounceback and Rapid Growth in 2023: The Global Wind Energy Council in Brussels is predicting that its industry will grow rapidly this year thanks to policy changes in key nations that will help to bounce back from slow growth in 2022, as Jennifer McDermott reports for the Associated Press. “The twin challenges of secure energy supplies and climate targets will propel wind power into a new phase of extraordinary growth,” the council said in its report.
Lawmakers Step Up Pressure on Treasury Ahead of EV Guidance: Bipartisan lawmakers are airing concerns ahead of the Treasury Department’s expected guidance on who qualifies for consumer electric vehicle incentives, as Timothy Cama and Hannah Northey report for E&E News. Sen. Joe Manchin, D-West Virginia, is one of several lawmakers who want to make sure the guidance is strict in adhering to requirements in the Inflation Reduction Act that were designed to favor U.S. sourcing of battery materials and provide an edge to vehicles and batteries assembled in this country. The legislation has upset leaders in major car-producing countries and led to threats of retaliation, which is why the Biden administration may seek to ease the rules.
Ford’s New Tennessee Plant Aims to Build 500,000 Electric Trucks a Year: With each new announcement it becomes clearer how big and important Ford’s new EV campus in Tennessee will be for the company. Ford said this week that it plans to build up to 500,000 electric trucks per year at the plant, as Paul Lienert reports for Reuters. Production would begin in 2025 at the plant near Memphis, and the plant’s output would be a key part of meeting Ford’s goal of producing 2 million electric vehicles per year by the end of 2026. For perspective, 2023 is likely to be the first year that the entire U.S. electric vehicle market will have 1 million in sales.
In California’s Central Valley, More Power Lines Are Needed to Allow for More Solar Power: Leaders in California’s Central Valley are hoping that an expansion of solar power can provide economic benefits at a time when unreliable water supplies are hurting agriculture. But this idea is facing a big constraint because the region lacks the transmission lines that would connect the solar plants to the population centers that would use the electricity, as my colleague Emma Foehringer Merchant reports for ICN. This is a big problem across the country and it will be interesting to see if California has anything to teach others about how to solve it.
Republicans Propose Nationwide Offshore Wind Ban, Citing Unsubstantiated Links to Whale Deaths: Several Congressional Republicans have signed onto a resolution that would place a moratorium on offshore wind development in part because of concerns about whale deaths, as my colleague Kristoffer Tigue reports for ICN. There is no evidence that links offshore wind to whale deaths, but it’s nice to see that lawmakers care so much about the health of ocean life.
Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].