Report: Fuel Retailers Need to Begin Repositioning for the EV Age
NEW YORK — The move away from gas-powered vehicles to electric vehicles (EV) is sure to cause some disruption for the convenience channel.
In a new report, AlixPartners noted that the rise of the EV market is likely to disrupt the economics of existing gas stations by draining revenue and profits related to direct fuel sales, and eliminating the fueling occasion that brings customers into the store. In addition, an increase of EVs on the road will force consumers to visit c-stores and gas stations longer due to charge times — resetting expectations for the fueling environment — and require retailers to make additional investments in their sites.
According to the New York-based firm, EVs and plug-in hybrids are expected to represent 33 percent of sales in China, Europe and the United States by 2030. This forecast anticipates 26.4 million EVs sold in those three major markets that year alone.
"Many retailers — from mass merchants to restaurants to travel centers — do have the natural advantage in having customers that typically dwell longer in their stores," the report said.
As AlixPartners explained, increased EV adoption will challenge the business models of major oil companies, gas stations and convenience stores. The impact, it added, will vary based on geography and industry segment, "but it is clear that a business-as-usual approach is not a viable response for enterprises reliant on people’s need to fill the tank. The impact to revenue and earnings will be gradual, but it will definitely affect all companies in the space."
In the face of the changing environment, AlixPartners laid out a roadmap for retailers to succeed, which includes four key steps:
- Electrification strategy
- Footprint optimization and development planning
- Digital engagement
- Business model innovation
"Regardless of the way their vehicles are powered, drivers will always need places to refill," the report said. "The EV revolution may be hard to predict and still several miles down the road, but now is the time to start drawing out the blueprint to address changing market dynamics and consumer behavior."
To read the full report, click here.