Growing Electric Vehicle Market Presents Opportunities for C-stores
ALEXANDRIA, Va. — As consumers change the way they get around, the convenience channel is in a prime spot to pivot from being a fuel provider to an energy provider.
Earlier this year, the Fuels Institute and industry association NACS launched new initiatives focused on electric vehicles (EVs). The Fuels Institute launched the Electric Vehicle Council to bring stakeholders together to talk about infrastructure, research regulations on site host best practices, and look at consumer behavior to provide greater insight on the emerging EV charging space. At the same time, NACS contracted with consultant Karl Doenges to help the association connect organizations that are looking to deploy chargers with its retailer members.
In a recent Fuels Institute webinar, Doenges, who serves as EV charging industry liaison for NACS, and Fuels Institute Executive Director John Eichberger joined forces to discuss the emerging EV market and the opportunities for convenience stores.
EVs are projected to gain market share over the next two decades. The U.S. Energy Information Administration forecasts that electric vehicles will rise to about 10 percent of all vehicle sales by 2040, and 5 percent to 6 percent of all vehicles on the road by 2040. On the high end, Bloomberg New Energy Finance forecasts that 60 percent of all light-duty vehicles sold in 2040 will be electric vehicles, and 25 percent to 27 percent of all vehicles on the road by 2040 will be electric, Eichberger cited.
"It's probably going to be somewhere in the middle over this timeline, but it gives you a range," he said. "Anywhere between 6 percent and 25-27 percent of vehicles on the road over the next 20 years will be electric, which opens up opportunities and a demand for charging infrastructure in the market."
One factor driving EV market growth is better technology. EV capabilities are getting much better, especially in terms of range, according to Eichberger. Among 20 EV models available this year, many have a range of more than 250 miles per charge.
Electric vehicle prices, however, are still high. "The acquisition cost, in our latest report, is a challenge the market has to overcome," he acknowledged.
As battery prices come down over the next few years, though, the ability to purchase an EV of equal capability to an internal combustion engine at a competitive price is very likely. And total cost of ownership still skews in favor of electric vehicles, noted Eichberger.
"The market is moving in this direction," he added. "We are not saying EV is going to take over in the next five, 10 or 20 years — clearly, they're not going to — but they are going to play a more significant role in the transportation market, and it is very important that companies and organizations that want to service customers [are] aware of that."
He pointed out that many surveys have confirmed that the availability of chargers and the speed of charging are determining factors in a consumer's decision to consider an EV.
"We need to be sure there are chargers in the market in order to give customers the comfort that they can get electricity when they need it," he said, noting there is a difference between how much charging is necessary to satisfy demand vs. how much is necessary to give customers comfort.
A recent Fuels Institute study found there is a mismatch between the convenience channel and where EV drivers currently seek a charge.
"Customers, for the last 100 to 120 years, have gone to gas stations to fill up their car. That's why NACS wants this initiative. They believe if we put chargers at gas stations, that's where customers are used to going; it makes sense, it's convenient. That's where they are used to getting their transportation energy," Eichberger said.
The study also revealed that the EV market is plagued by a lack of interoperability and standardization. Every charger has a different platform.
"How do we create a system where the EV driver doesn't have to have 10 different apps on their phone in order to initiate a charge?" Eichberger asked. "How do we make this more consumer friendly, so the consumer who is driving an electric vehicle doesn't have to go through hurdles to get electricity for their cars when they need it?"
According to Doenges, that is where c-stores come into play.
"The convenience retail industry is really focused on the vehicle and its passengers. As our core customers start to migrate from internal combustion engines over to electric vehicles, ignoring it is not an option," he explained.
While it is still the early days of EVs, "our customer is still our customer and if they change the way they have mobility, it is just a matter of us adapting," Doenges added. "We still need the sales, we still need the convenience items and the ancillary services to be sold. The demand for these items is still going to be there. It's just the methodology by which the customer moves around is evolving and we have to evolve with that."
Thus, the channel needs to look at what other habits change when a customer does switch to an EV, advised Doenges, noting that this will uncover more opportunities. For example, ancillary services like car washes to keep critical cameras and sensors clean, and tire inflation, rotation and replacement will become important.
Plus, a EV charging session is longer than a typical fueling session, presenting c-store retailers with the chance to sell more foodservice items customers can eat while waiting.
Among the core site attributes needed at a c-store to offer EV charging are:
- Utility access,
- Space, and
- Freedom to operate if leasing a store.
In addition, Doenges said there are other attributes needed to optimize the charging experience for customers. This includes WiFi and 5G access, well-lit and safe locations, clean restrooms, and branded coffee.