How C-store Retailers Can Plug In to the Growing Electric Vehicle Market
CHICAGO — What’s the potential for the electric vehicle (EV) market? What are the potential options for electric vehicle customers? How can convenience store industry retailers capitalize on all that potential?
Those are the questions Michael Jones, vice president of sales at ChargePoint, and Derek Nelson, Kum & Go LC’s manager of sustainability, sought to answer during the “Capitalize on the Opportunity the Electric Vehicle Market Is Bringing to the Industry” education session at the 2017 NACS Show.
Offering the vendor perspective, ChargePoint’s Jones affirmed a belief that “no major industry will change more over the next two decades than transportation.” This will come to fruition, according to Jones, because of the rise of on-demand mobility, autonomous vehicles and vehicle electrification. As he pointed out, there’s already been the electrification of every form of transportation due to advances in battery production and cost.
As transportation continues to evolve, and autonomous vehicles become more common, there will be a profound cultural impact. Jones suggests that autonomous vehicles eventually could spell the end of vehicle crashes, car ownership, parking spots, errands, urban congestion, and the urbanization of society in general.
Before autonomous vehicles become ubiquitous, though, their cost will have to come down. When that happens, Jones expects the most common purchase will be fleet purchases. Following a pattern of fleet purchases of autonomous vehicles, there will be fewer cars needed.
As for electric vehicles, Jones believes they’re destined to be a part of the mainstream in the near future, especially considering that countries are putting curbs on CO2 emissions.
Both drivers’ needs and business owners’ needs can be met with EV vehicle adoption and creating a space for them to charge, according to Jones. EV drivers will need fast and easy charging at convenient locations that provide real-time status, know their car, enable them to track their charging, and provide expert assistance. Business owners need a simple, customizable operation with low overhead costs and seamless business integration, energy management, support for drivers, and reports that validate.
Still, despite his predictions about the EV and autonomous vehicle wave of the future, Jones doesn’t believe fuel cars are going away for a considerable stretch of time.
Kum & Go’s Nelson, providing the retailer perspective, kicked off his portion of the session by demonstrating, via a show of hands, that driving in a Tesla is an indisputably positive experience. Nelson used the affirmative show of hands to bolster his argument that Tesla vehicles — and EVs at large — are disruptors.
Nelson put forth that retailers should consider targeting the EV market because it marks a new customer segment, provides higher margins than regular fuel, requires a cheaper infrastructure cost to install (especially when planned upfront), and it's a growing segment of the U.S. auto industry.
For retailers to target the EV market, they’ll need to know what technologies work and how, if there are other amenities needed, and when to add the charging stations before it’s too late, according to Nelson.
Retailers might be surprised to learn that compared to the cost of supplying regular fuel to consumers, supplying EV charging services can be significantly less. Kum & Go, which partnered with ChargePoint for two pilot locations in Colorado, spent only $100,000 on those locations. Nelson pointed out that the cost was 10 percent less than the roughly $1 million a retailer can spend on one traditional fueling station.
According to Nelson, the two Colorado stores that are slated to open in February could yield up to a 45-percent margin. Due to the ease and less costly investment of installing EV charging stations — in addition to falling costs of EV cars and anticipated growth in conversion — Nelson cautioned that businesses outside of the c-store industry could also start looking to provide the EV charging service, increasing competition.
Nelson believes that Kum & Go’s new Marketplace store design caters to EV consumers and could ultimately help stave off consumers choosing other places to charge up. Its Marketplace stores feature indoor and outdoor sit-down dining options, as well as device charging stations inside the store to enhance the consumer's overall experience.
With the transportation landscape changing, retailers and suppliers need to be prepared, both Jones and Nelson agreed. Collaborating with experts in the space, understanding what fits within an organization’s fuel strategy and being prepared to amp up amenities to attract EV consumers are vital for retailers looking to capitalize on the opportunity the electric vehicle market provides.
The 2017 NACS Show took place Oct. 17-20 at Chicago’s McCormick Place.