Gas Stations & EV Chargers — Why All The Tension?
DC Fast Charging stations are nice but in most cases they are very cost prohibitive relative to the income potential. The real key to EV adoption is placing level 2 chargers where people need them most, the last mile.
Gas Stations & EV Chargers — Why All The Tension?
With all the EVs forecast to be on the roads within 5 years, the question emerges, How will gas station owners convert their massive network of pumps to chargers?
Gas stations and EV chargers are far distant cousins that haven’t yet met. If you owned a gas station, wouldn’t you have at least one destination charger installed, with the intent to add more as demand indicated? But across the US gas stations owners — whose real estate often includes an accompanying convenience store to increase profitability — seem to be blind to the inevitable future where EVs equal then dominate personal and commercial transportation.
What’s up with that?
On Earth Day this year, Transportation Secretary Pete Buttigieg stood before Washington DC’s Union Station and spoke about the most significant modes of transportation before him: Amtrak, public buses, the Metro, and personal vehicles. He also reminded the audience that the transportation sector is this country’s largest contributor to greenhouse gas emissions, with a solution that revolves around a “once-in-a-generation opportunity to spark an electric vehicle revolution.”
Buttigieg said that the Federal Highway Administration (FHWA) “has designated nearly 166,000 miles of our national highways as alternative fuel corridors, covering 49 states and the District of Columbia. And that includes 59,000 miles of EV corridors.” Among the many components of the American Jobs Plan were “new incentives to buy American-made EVs, all while ensuring those vehicles are affordable for the average family.”
Were US gas station owners listening that day?
The Arguments Against Adding EV Chargers
The legacy automotive industry is being dragged to the transition to electric vehicles. While it took a decade for the all-electric realization to kick in, more than 100 models will be available for consumer purchase by the end of 2021.
Today, 80% of direct current fast charging and Level 2 charging stations — the fastest way to charge an EV — are located at 10 facility types, according to the Department of Energy’s Alternative Fuels Data Center: hotels and apartment buildings, car dealerships, shopping centers, and parking lots. The need for DC fast-charging centers is imminent for audiences anywhere from lower-income customers, fleets, and condo residents who don’t have a garage with 120-volt or 240-volt outlets. Gas stations would be ideal sites for charging.
The National Advancing Convenience & Fuel Retailing estimates that 40 million gasoline transactions take place every day. That’s a whole lot of pumping.
Are retailers who install charging stations today taking a risk? Let’s look at the industry arguments against installing EV chargers.
Electric vehicles only make up 1.8% of the market share. It’s too small a segment to invest in right now.
Charging stations are expensive to install, especially without a short-term return on investment.
In most locations, electricity is sourced from only one place: the local utility company. In contrast, liquid fuels can be obtained from a variety of sources that compete against each other for pricing.
Retailers who want to be EV charging early adopters risk owning antiquated technology in just a few years.
“There’s not a fleet out there today to keep the chargers running at a rate that would support economically putting it in more of the facilities,” Phillips chief economist Horace Hobbs reiterated to attendees at a virtual conference on energy issues.
John Eichberger, executive director of the Fuels Institute, who is actively researching ways to make the forthcoming energy transition as smooth as possible, told CBS News that this uncertainty leaves owners to make “observational, anecdotal, and speculative” decisions when it comes to embracing the electric vehicle market.
What are the options?
Invest now strongly in EV charging and be recognized as an innovator — an early adopter.
Start small with 1-2 chargers and wait for the demand to build.
Wait until the critical mass shifts in favor of EVs — which might mean losing out on a real investment opportunity.
Gas Stations & EV Charging: A New Business Model
Pumping gas requires a person to be actively involved from beginning to end of the fueling process. Charging an EV at a Level 2 charger would require at least a slot of time in which individuals in the EV would want to leave their vehicles and fill their time, as low EV batteries take much longer to fill than a liquid tank. Fueling stations would need to step up their game by providing:
At least some degree of hot and cold food and beverage selection, alongside a dedicated area away from traffic to sit and eat
WiFi, which will be absolutely expected by customers who stop to charge
Bathroom facilities that are modern, stocked with ample paper goods, sanitary, and cleaned every few hours
Customer service staff who are well-trained, polite, and knowledgeable not only about charging but local area attractions
A Case Study of a New Era Charging Station
RS Automotive in Takoma Park, Maryland is the first US gas station fully converted to an electric vehicle-charging station, as reported by NPR. With its blue and white sign that posts EV charging rather than dollar and cents gas pricing, gas stations and EV chargers seem quite similar and familiar to the passing drivers.
Owner Depeswar Doley purchased the independent station and repair shop in 1997 and says he experienced bad contracts, changeable oil prices, and convenience store break-ins. Fed up, he decided to shut off the gas pumps. With a personal loan out to remove the station’s underground storage tanks, Doley planned to focus on the repair shop for business revenue.
But a call from the city changed everything. Did he have interest in a transformation in which his gas station would be converted to a fully outfitted charging center? To do so, he’d receive a $786,000 grant to pay for the conversion — a combination of state funding and money from the Baltimore-based Electric Vehicle Institute (EVI).
Today Doley gets 66% of the revenue from charging sessions, while EVI gets 33%. The current charging price is a base of $2.50 plus $0.20 per minute. Doley pays to keep the power flowing, and EVI pays to keep the chargers maintained.
His 17-year-old daughter Teresa prodded her dad to switch to charging. Like so many youth advocates, she sees electrifying everything as the way to mitigate the climate crisis. “I think it’s kind of encouraging people to get EVs, a lot of people don’t want to get electric vehicles, because they’re worried that they’re not going to be able to charge them. And I think that if you make it more available, then people are more likely to want to try it.”
Business since the conversion has been limited to about 8 to 10 charging sessions per day. But Doley is hopeful, as he receives lots of inquiries from gas station owners and EV owners wanting to visit. He also revamped the station’s former convenience store and turned it into a charging lounge, with black leather easy chairs and Wi-Fi. He decided not to sell food in the lounge, in part to encourage drivers to explore around the neighborhood while their car charges, which takes around 15 to 30 minutes.
Ramon Dawes, who runs Roland’s Unisex Barbershop next door to RS Automotive, hasn’t noticed a difference in his customer base yet. “But it’s a learning curve,” Dawes says. “Got to do something. Save the planet, one step at a time.”
Eichberger indicates that deep-pocketed investors are in “acquisition mode” looking to “gobble up” properties that can be built up to provide customers with all the space, convenience, and fuel options they need. Gas stations and EV chargers will seem to be a marriage of necessity — sooner than so many people think.