Cut range anxiety by adding more EV chargers to gas stations

The increasing availability of public charging points is helping to ease range anxiety for people considering the switch to an electric vehicle. EV chargers are now a common sight in shopping centers and workplaces, which is encouraging more people to see EVs as practical and removing fears about being stranded at the side of the road.

  • Access to residential charging. The average owner of a Tesla or a Porsche Taycan likely has their own garage or driveway, where they can easily charge at home. But the next wave of EV adoption will increasingly include people who do not have easy access to residential charging, meaning greater reliance on charging networks.
  • Single-car ownership. Many current EV owners also have an ICE vehicle within their household that can be used for journeys where charging may not be as convenient. As EVs start to become cost-competitive at the lower end of the market, many buyers will belong to single-car households that need reliable charging for every journey they might take.

Single-car ownership. Many current EV owners also have an ICE vehicle within their household that can be used for journeys where charging may not be as convenient. As EVs start to become cost-competitive at the lower end of the market, many buyers will belong to single-car households that need reliable charging for every journey they might take.

This new generation of EV buyers is fast approaching. Even in the US, where adoption is much lower than in Europe, analysts predict that EVs will comprise 30% of new car sales by 2030. Gas stations may see these forecasts and fear for their profits, but they will continue to have a role to play into the 2030s and beyond.

Strategy

Indeed, gas stations are well positioned to capitalize on the shift to EVs. They have the capital, customer knowledge, and networks needed to break into the EV charging market and even to dominate. But doing so will require investment, planning, and commitment.

Consultants at McKinsey encourage fuel retailers to craft a comprehensive EV strategy as their margins from fossil-fuel sales evaporate.

Future of fuel retail

An EV strategy is about more than just adding some charging points. McKinsey forecasts that the future of gas stations will be about “new mobility retail”, which entails a shift away from convenience stores to new formats:

  • Dine-in and takeout food options
  • Grocery shopping
  • Modern, clean restroom facilities
  • Car care centers
  • Urban EV hubs

Some of these trends are already underway at gas stations, as the margins available from fuel sales have been shrinking for years — a trend that accelerated during the pandemic. Upgrading the gas station experience for EVs will involve a continuation of this process rather than a step change. To accommodate longer refueling times, gas stations will need to upgrade their non-fuel operations, providing more space for seating, food service, and better restrooms.

Several oil majors are already making the transition, with BP betting on what it calls “fast charging on-the-go” — high-power charging points that get drivers back on the road as quickly as possible. Emma Delaney, head of customers and products at BP, recently told investors that its EV business will deliver “chunky earnings” by 2025. The company had around 22,000 charge points by the end of 2022, up by more than 65% compared to 2021.

Shell is also betting big on EV charging, with plans to operate more than 500,000 charge points worldwide by 2025.

Path to profitability

With the right strategy, adding EV chargers can help gas stations to boost profitability and establish themselves as a go-to destination for e-charging. As with conventional customers, most of the margin will come from in-store sales rather than fuel, especially for intercity journeys where people are willing to stop for longer to take a break.

But gas stations also have some flexibility to experiment with pricing models. Most public charging points in parking bays or at workplaces offer slower charging, whereas an EV that pulls into a gas station is more likely to be looking for something much quicker, which can only be delivered by high-powered DC charging.

There are a host of charging solutions available in this product space, ranging from 50kW to 360kW. Typical pricing for gas station EV charging uses a per kWh model, often with a fixed price. For example, costs at one large charging network in the US are US$0.48/kWh for non-members and US$0.36/kWh for members. This compares to an average unit price of US$0.16/kWh in 2022.

While there are costs associated with installing the necessary charging infrastructure, there are clearly opportunities to sell electrons profitably at the right location, especially when paired with a clear strategy. For example, Shell’s gas station EV charging network in the UK highlights three key tactics:

  • Urban. Focused in London and other urban centers, where there are many EV owners who don’t have the ability to charge at home.
  • Intercity. EV chargers at its gas stations on key motorway routes.
  • Partnerships. Tie-in with one of the UK’s most popular grocery chains, Waitrose.

Getting started

Heliox offers the full range of products, services and expertise to help gas station owners add EV charging to their business model. Getting started now will provide vital insights to the future of refueling, while also helping to ease range anxiety and accelerate the transition to EVs.  

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