What Will Happen to Gas Stations in an Electric Future?

As electric vehicles continue to go mainstream over the next several years, the economy of gas stations is expected to shift significantly. With gas station numbers already dropping over the last few decades, some expect their numbers to drop even more with the onset of EVs — though, for some gas stations, the change could also provide a major opportunity.

Above: A Tesla Model Y at a gas station (Image: Casey Murphy / EVANNEX).

Consultants at BCG say one-quarter of all global gas and service stations may risk closing entirely by 2035, unless they make major changes to their businesses to accommodate EVs (via CNBC). The number of gas stations has already decreased drastically in the last 30 years according to Market Research Future VP of research and strategy Shubhendra Anand.

Installing Level 3 EV fast-chargers can be cost-prohibitive, especially for independent stations or dealerships. For one charger, it may cost as much as $50,000, while multiple chargers can range from as much as $500,000 to $1 million, according to ChargePoint executive Michael Hughes. If you need to create infrastructure for the charging stations, he says it could cost twice as much.

Other prohibiting factors can include location, lack of amenities, and the fact that most owners charge at home, potentially making in-town stations less important in some areas. Still, the need for public charging infrastructure is there, and the Biden administration is targeting 500,000 national EV chargers by 2030 with as many as 50 percent of new car sales being battery-electric. Currently, the administration says there are over three million EVs on the road nationally with just 130,000 public chargers.

“Figuring out how to do this on an active site can be complex and challenging,” said Neha Palmer, CEO of TeraWatt Infrastructure, a company building a charging network across California, Arizona and New Mexico. “How do you sequence the construction when you have vehicles that might want to fuel there?”

Above: EV Charging Hardware and Tesla's NACS Charging Connector (Video: CNBC).

Despite the many barriers for independent gas stations adding EV chargers, federal incentives help. However, most poised to benefit and deploy mass-scale charging hardware are big oil companies like Shell and BP (formerly British Petroleum), which are setting goals to expand EV charging at their stations in the coming years. By 2025, Shell hopes to have over 70,000 public EV chargers around the world, with as many as 200,000 by 2030. Dealerships from Ford and GM are also rolling out stations at some locations.

Prohibitive factors are still causing some gas station owners to slowly approach adding EV chargers, however, including SQRL Holdings founder Blake Smith. SQRL owns and operates over 150 convenience stores throughout the U.S., and location has played a major role in where the company has built charging hardware.

In Florida, some of the company’s convenience stores now include EV chargers, while none of the 60+ in Arkansas have them yet. Smith also argues that a full switch to EVs could be decades away from now.

“I would never recoup my investment,” Smith said. “We’re not flipping a switch to where gas vehicles are getting off the road and it will be EV-only.”

As for incentives for building EV chargers, the U.S. Department of Transportation offers a Federal Highway Administration NEVI Formula Program to states, and those who own a gas station can also search through Federal and State EV charging incentives they may be eligible for here.

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