Gas stations, once a ubiquitous feature of the roadside landscape, are undergoing a significant transformation. As the world transitions to electric vehicles (EVs), these establishments are adapting by expanding their offerings beyond fuel sales. This article delves into the current state of gas stations, their challenges, and the innovative strategies they are employing to remain relevant.
1. The Decline of Traditional Gas Stations
Despite the rise of EVs, gas stations are not disappearing overnight. However, their numbers are declining. According to a report by the Boston Consulting Group, by 2035, 80% of retail fueling could become unprofitable, leading to the closure of one-fourth of the world's gas stations. This decline is attributed to the low profit margins from fuel sales, which account for as little as 2% of a convenience store's profits.
In Michigan, for instance, while some gas stations are closing, others are expanding. Larger chains are moving in with custom food offerings, milkshake machines, 24-hour kitchens, additional vape flavors, and even liquor sales to keep the stores profitable as fuel profits decline. This shift towards convenience stores with a broader range of products is a strategic move to attract customers who may not even want gas or a charge-up.
2. The Rise of Electric Vehicle Charging Infrastructure
As the auto industry expects EVs to eventually overtake gas-fueled autos, gas stations are preparing to adapt by installing EV charging stations. Shell, for example, plans to close 1,000 of its retail gas stations between 2024 and 2025 to focus on expanding its EV charging infrastructure. By 2025, Shell aims to install around 70,000 public charging stations, with plans to reach 200,000 by 2030.
Other operators like Sheetz are also adding EV charges to all of their fueling centers. However, the adoption rate of these charging stations remains low, with company president Kraig Elliott of Michigan-based Fastway noting that very few drivers use them. The cost of adding a fast-charging station is significant, approximately $100,000, which may deter some operators from investing in this infrastructure.
3. Innovative Strategies for Survival
To remain competitive, gas stations are evolving into more than just fueling centers. They are becoming convenience centers with a wide range of products and services. For instance, new gas station plans include coffee bars, hot foods, and even car washes. The focus is on offering more options and convenience to customers.
The most innovative gas stations are pursuing everything from mobility ventures and battery-management systems to food delivery and carpooling services. This diversification is crucial for their survival as mobility shifts towards shared platforms.
4. Community Reactions to New Gas Station Plans
New gas station plans are receiving mixed reactions in Michigan communities. Some communities are balking at proposals for larger stores due to concerns about increased traffic and noise. For example, Eastpointe, Fraser, and Attica Township have rejected proposals for new gas stations.
However, other communities like Genesee Township, Flushing Township, and Union Township near Mt. Pleasant have approved recent proposals. The plans will continue to evolve as they have since earlier changes such as pay-at-the-pump systems.
5. Challenges and Controversies
Despite the efforts to adapt, gas stations face several challenges. One of the most significant issues is the risk of contamination or incorrect fuel dispensing. A recent incident in Longview, Texas, highlighted this problem when customers reported car problems after allegedly receiving the wrong fuel type at a Murphy USA gas station.
The incident led to a backlash against the gas station, with some customers experiencing severe car damage. The Texas Department of Licensing and Regulation (TDLR) regulates the quality of motor fuel and registers the facilities that sell motor fuels. Customers are encouraged to keep their receipts and file complaints with TDLR if they experience any issues.
6. Global Perspectives: Incidents and Accidents
In other parts of the world, gas stations are also facing challenges. A recent explosion at a service station in Chechnya, Russia, resulted in the deaths of four people. The incident highlights the risks associated with operating gas stations, particularly in regions with unstable infrastructure.
The explosion was a tragic reminder of the potential dangers that can arise from fuel handling and storage. Such incidents underscore the need for stringent safety measures and regular maintenance at gas stations worldwide.
7. Future Outlook: EV Charging and Convenience Stores
As the world continues to transition towards EVs, public fast-charging sites are expected to outnumber gas stations in the U.S. within eight years. The current pace of charger installation, driven by investments from companies like Shell and EVgo, indicates a significant shift towards electric mobility.
Retailers are increasingly adding EV charging cords to their parking lots, aiming to attract the growing number of EV owners. This trend is evident in the second-quarter charger blitz, where networks activated 704 new public fast-charging stations, an increase of 9% in three months.
The Biden administration's National Electric Vehicle Infrastructure (NEVI) Formula program is also playing a crucial role in filling in the gaps on the charging map. The program aims to accelerate the deployment of EV charging infrastructure across the country, supporting the transition to electric vehicles.
In conclusion, gas stations are undergoing a transformative period. While some are closing due to declining fuel sales, others are evolving into innovative convenience centers with a wide range of products and services. The future of gas stations is closely tied to the development of EV charging infrastructure and the ability of these establishments to adapt to changing customer needs.
