So, what is the future of gas stations?
Electric vehicles are on the rise and soon conventionally powered cars will be a thing of the past. Service stations are therefore faced with obsolescence.
The end of gas stations as we know them is on the horizon. The internal combustion engine (ICE) is giving way to electric vehicles (EV). Already, electric vehicles are hitting the market that can tow recreational vehicles and their development continues at a meteoric pace. Electric vehicles arguably now have what it takes to enjoy an epic cross-country road trip.
The massive change to come is such that Telsa alone plans to produce 20 million cars a year by 2030 (up from 1 million currently). To put that into perspective, only 66.7 million cars were sold worldwide in 2021! So how long will gas stations be around and what will replace them?
The race for electric vehicles
The race to convert to electric vehicles is accelerating. Norway’s ECI ban will come into force in 2025 – just 3 years from now. While many other countries ban them from 2030 including Sweden, the United Kingdom (hybrids from 2035), and even the state of Washington.
- Total car sales: 66.7 million
- Telsa objective: Produce 20 million cars by 2030 per year
Washington State plans to phase out the purchase of new ICEs by 2030, with California and other states to follow by 2035. Other states and countries will likely continue to advance their goals of elimination.
- ICE prohibitions: Many ICE bans come into effect in 2030
Norway has already succeeded (the vast majority of their new cars are now fully electric, with only around 5% running entirely on fossil fuels without hybridization. It should only get easier from there as more and more options are coming to market and the technology continues to develop.
- Norway: Ban ICEs by 2025 – Has effectively already stopped the sale of ICEs entirely
This basically means that Norway is taking its old ICE vehicles off the roads. This will take a number of years as the average lifespan of a car is 12 years or 200,000 miles.
- Average car life: 12 years or 200,000 miles
The outlook for service stations
By 2030, few ICE vehicles will likely remain on the roads in Norway, while their numbers will decline in the United States. Another threat to petrol stations is hybrids which also erode consumption.
- Number of service stations: 150,000 in the United States alone
Today, there are approximately 150,000 gas stations in the United States. And the Boston Consulting Group calculates that between 25% and 80% of gas stations could no longer be profitable by 2035. The real profitability of these gas stations is their convenience stores – drinks and chocolate bars. Gasoline is intended to attract motorists.
It therefore seems certain that by 2030, traditional service stations will be in decline in the United States and Europe.
Must adapt to survive
To survive, they will have to reinvent themselves. And they will be competing with Starbucks and other cafes and restaurants. People will want to stop and have a coffee or lunch while their car is charging.
One can get a glimpse of how Shell is looking to reinvent its stations in the UK.
“Shell has opened its first electric vehicle charging hub in the UK converted from a traditional petrol station…”
Gas stations will no longer be gas stations. They will need to have charging points and will need to have a cafe – they will need to be something more interesting. Some ways they can develop include:
- Loading: Obviously the need to add a filler
- Transform: They need to stop being smelly places and be a real “gas station”
It is obvious that many service stations will disappear but some will succeed in the transition. Others may just pull out their tanks and be just a troubleshooter.
Competition from cafes, restaurants, car parks and supercharging stations
But for those who don’t change, the future is bleak. Even those who install chargers will be in competition with cafes and restaurants that place chargers in the front to attract customers to their restaurants. Plus, they’ll be competing with supercharger networks from Tesla and others.
- Charging locations: Cafés, restaurants, parking lots, booster stations – Your garage
- Super fast: The plan is for electric vehicles to be able to charge in as little as 15 minutes by 2030
Where would you like to relax for 20 minutes while your car is full of juice? That of Tim Holton? Starbuck? Or a traditional petrol station with chargers? Of course, these are not necessarily mutually exclusive as they often end up together anyway.
But even random Tim Holtons disconnected from a gas station and parking lots can set up charging stations taking business from traditional gas stations trying to make the transition. One can simply recharge while parked at work.
Sure, some gas stations will live – gas will be needed for things like chainsaws, generators, etc., but they’ll be a shadow of their former selves.
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