CLVG Report – The business case for EV charging. Is it for you?

Convenience Leaders Vision Group (CLVG) has released their second Vision Report “The Business Case for EV Charging: Is It for You?” Leading North American retailers such as Parkland, Sheetz, Shell and Parker’s Kitchen sat down to discuss how they are adapting their business to EV charging.

Convenience store retailers have been sorting through the pros and cons of adding electric vehicle charging capabilities for years as the eventual transition to an alternative fuel source seems inevitable. As EV adoption rates increase and automakers continue to add to their EV lineup, so too does the discussion among convenience retailers of how/when/if to invest in EV charging networks. It arguably has the power to change the petroleum marketing landscape like nothing else.

While it may be too early to place a bet on when the last internal combustible engine will be laid to rest, convenience retailers and petroleum marketers now face a range of decisions around how to support the enthusiasm that continues to grow around electric vehicles. The pace of EV developments is seemingly speeding up and much more prominent in mainstream thinking. The “when” and “how” part of the EV discussion takes precedence for industry veteran Doug Haugh, who follows EV trends closely.

“Nobody’s predicting that [EV] doesn’t happen,” Haugh said. “Everybody’s just arguing about the schedule.” Does the schedule mean 10 years? 40? The timeframe makes a huge difference to today’s convenience and gasoline retailers, he noted.

The range of thoughts extend from “recognizing a new opportunity and a new threat, and positioning ourselves to deal with it,” Haugh said. On one side, he views EV charging as an opportunity for convenience retailers to offer a convenient and necessary solution for EV users when they require a place to charge their vehicles. On the other hand, he noted “we have to be very, very cautious about making investments in our sites that are in perhaps more residential areas.”

Infrastructure concerns loom heavy around this topic with the limitations of the energy grid a key issue. “To duplicate the amount of energy our systems do today from a conventional fuels perspective is sort of unfathomable,” said Haugh. “The grid is nowhere close to being constructed to deliver that kind of energy at that many outlets from an infrastructure substation.”

The complexity of the power grid — and how to improve it has spawned its own set of debates, as has talk about pricing structures. Will the existing retail petroleum infra-structure convert to support EV? BP’s recent acquisition supports that assumption. The TravelCenters of America purchase announced in February gives BP prime interstate locations which many contend are the ideal locations for EV users who to date commonly recharge vehicles at home but still seek long-rage recharge solutions. The move followed BP’s acquisition of a renewable natural-gas company. Interestingly, about two weeks prior to news of BP expanding its energy-transition portfolio, Shell announced it will not accelerate its 2023 investments in energy solutions after its $3.2 billion investment in renewables and energy solutions in 2022.

While major oil continues to navigate its investment in renewables, EV charging developments happening among convenience retailers spans from no involvement to all-in investments. Indeed, the bulk of traditional convenience retailers have yet to make a significant capital investment in EV charging platforms. Any dollars funding the existing programs that the majority of CLVG members offer in the EV charging arena stem from either charging station companies, government funds or a mix of both.

One CLVG member, Barbara Stoyko, senior vice president of Shell Americas Mobility, brought the self-funded perspective on EV charging networks to the discussion.

Notably, in March, 7-Eleven drew attention from the industry when it announced plans to build a proprietary EV charging network throughout the U.S. and Canada. Called 7Charge, the company said its network will be one of the most compatible electric vehicle fast-charging networks in North America.

There will undoubtably be some shape shifting in the retail sector as EV charging stations take hold across the U.S. with the core charging footprint still uncertain. Primarily, households were deemed — and remain — the preferred place EV owners recharge their vehicles. However, as EV ownership continues its reach into different socioeconomic levels, that changes the characteristics of how and where EV owners will charge their vehicles. CLVG members seek to understand both the EV charging customer of today and tomorrow while also considering the larger issues of investing and building the infrastructure.

CLVG members also view the EV discussion through a customer service lens: Who is the EV consumer? Is it the traveler going on a trip or the commuter stopping by to and from work? How do we best serve them? What’s the value proposition for the EV customer?

The EV customer of today may not be a heavy convenience user but the EV customer of tomorrow may be one. Stoyko believes that to be true. The Tesla customer of today represents an early adopter, she noted, generally with a high income and likely someone who charges their Tesla at home. But, she wonders, as more of the middle of the population converts and become EV users, how that shift changes the dynamic of the typical convenience consumer.

Access the full report from Convenience Leaders Vision Group here.

Convenience Leaders Vision Group brings together convenience retail icons and trailblazers through quarterly virtual meetings. During these sessions, members identify trends, challenges and disruptions in retail as well as possible solutions and opportunities.