Research group advises gas retailers to start planning now for EV charging

Ambitious electric vehicle sales goals touted as part of the Biden administration's climate agenda should not cause panic for fuel retailers as the transition from gasoline pumps to electric charging plugs will be lengthy, but retailers do need to start planning now, the head of a vehicles and fuel markets research group said Sept. 27.

President Joe Biden last month signed an executive order that seeks to have zero-emissions vehicles make up 50% of new vehicle sales by 2030, as the administration also laid out long-awaited plans for bolstering fuel efficiency and emissions standards for cars and trucks. The government's actions were accompanied by announcements from major automakers that they were aiming for 40%-50% of their respective annual sales to come from EVs by 2030.

Those and other climate actions have spurred retailers to increasingly ask whether they should build any more gas stations, to which Fuels Institute Executive Director John Eichberger emphatically responded: "yes."

"Combustion engines are going to be on the road for 50, 60, 70 years," he said during a webinar hosted by the clean energy nonprofit Generation180. "You're still going to have a demand for fuel," albeit not as much, he said, asserting a likely 1%-2% annual drop in gasoline demand over the next 20 to 30 years from fuel efficiency, electrification, and other factors.

But gas pumps and charging stations "are going to coexist for a very long time, so you need to plan for both," he added.

Not an overnight change

Landhope Farms, a small convenience store retailer in Pennsylvania, made the leap to install EV chargers after evaluating its customer base, seeing a community need, and deciding to get ahead of the curve, said Gerard DiBona, the company's corporate operations project manager.

"We haven't seen too much disruption from the electrical chargers to the gasoline model at this point yet," DiBona said. "Our customers are using them, but we still have consistent fuel sales. It's not going to be ... a light switch that turns off overnight. It's going to be driven by the market, [and] ... we want to be in front of it and be a part of it as it continues to grow."

Eichberger contended that even if 60% of all light-duty vehicles sales are for plug-ins by 2040, assuming "typical sales and scrappage rates, that only converts less than [one-] third of the market to EV by 2040."

With that in mind, he said retailers "don't need to panic ... but [they] need to plan, and [they] need to be aware of [their] market surroundings," particularly local trends, rather than national ones.

That planning, he said, involves talking to their utility, regulators, and strategic partners now so they "can get into the business when it's right to do it." Failing to do that planning now, he continued, risks missing out on government incentives that will fade out over time and potentially losing first-mover advantage to competitors.

"You need to be in the customer's mind space in order to keep them coming to your store, and if you're not offering them what they're looking for, you just lost them for good," Eichberger said. "So that's kind of the message we're talking about. There's time, but don't wait too long."

Oil, gas prices

Asked about the recent rally in crude prices, Eichberger said that high gasoline prices causing pain at the pump for US drivers were not expected to drive greater adoption of more fuel-efficient vehicles.

"People buy the vehicles they need," he said. "Within that class of vehicle, they may shop around for the best price, best fuel efficiency, all those things. ... But gas prices have to get really high before people start making significant changes in their behavior and changing what they're going to drive."

Still, lower EV purchase prices and greater charging infrastructure are expected to come about as the buying population becomes dominated by the younger generation, Eichberger said. "I look at an EV and go, why would I want to plug in my car? They're going to say, 'Why would I not? I've plugged in everything since the day I was born.'" As such, higher gas prices will be supportive of the EV market, he said.

The current challenge with prices, he contended, stems from demand rebounding from the pandemic faster than supply as oil producers weigh investment decisions against messages from global leaders that oil's days are numbered and combustion engine makers will be put out of business.

"We need to increase the production to get these prices down to support all communities and all customers, but at the same time, the higher prices help accelerate the EV trend," Eichberger said. "It's a real challenge how to balance it out."

The real benefit to the EV market, he said, is the influx of options for customers as automakers release more and more EV models. "We're starting to see that balance come into place where the customer is going to have an actual choice rather than having to make a leap of faith to a technology or change their behavior," he said.