With the rise of alternative fuels, including electric vehicles (EVs), the automotive landscape is undergoing major changes. For gas station owners, does a rise in EVs mean their livelihood is in danger?

Fortunately, with some proactive planning, the answer to that question can remain a confident “No.” Read on to learn about gas station economics, delve into the correlation between gas stations and electric cars, and explore the future of the gas station business.

GAS STATION ECONOMICS

Unsurprisingly, gas station economics are intertwined with the price of oil and demand for gasoline. As such, gasoline prices fluctuate depending on factors like geopolitical tensions, supply and demand, and shifts in consumer behavior. More surprisingly, however, profit margins for fuel retailing are fairly thin. Due to these small margins, many gas station owners lean heavily on in-store sales and ancillary services like car washes to bolster revenue, according to NBC News.

In recent years, EVs have become another variable in the equation. Since EVs don’t require gasoline, it’s not shocking that gas station owners are concerned about the market’s future. Fortunately, the transition to EV continues to be very gradual and phased, giving you ample time to adapt your business model to this new era.

PLANNING FOR THE FUTURE OF GAS STATION BUSINESS

It’s highly improbable that future gas station business models will look the way they do today, but things won’t change too drastically, despite what a quick look at the statistics says. According to the U.S. Department of Energy, 80% of EV charging is currently done at home. However, this statistic doesn’t consider EVs still suffer from a fairly short range. Due to this limitation, many EVs are used as short-distance commuter vehicles, which rarely see the need to stop at a gas station before they return home. As EV buy-in and battery technology improve, the need for mid-transit EV charging will increase, balancing that figure a bit more.

INSTALL EV CHARGING STATIONS

Taking those factors into account, one way to stay relevant if the demand for EVs increases in your area is to install EV charging stations at your fueling station. Though it can be expensive up front, you may be able to partially cover the cost of electric vehicle charging stations by taking advantage of certain government incentives. Plus, adding EV charging to your existing infrastructure comes with some serious benefits; not only can you prepare for the future and attract preexisting EV owners in the present, but you can also gain another revenue stream for your business.

OFFER SERVICES AND PRODUCTS IN ADDITION TO CHARGING/FUEL

Still, you may ultimately need to rely on complementary services and amenities to increase your revenue. The more things customers have to do while their vehicles charge, the more likely they are to purchase something. From convenience stores and coffee shops to car maintenance and repair services, there are numerous ways for you to enhance the overall perception of your station and increase profitability.

ADOPT CHARGING RESERVATION PLATFORMS

While incorporating EV charging into existing gas station infrastructure and taking advantage of ancillary services could be a smart move, Forbes recommends taking it a step further by adopting mobile applications and online platforms that enable customers to reserve charging spots and check availability before they get to the station. Doing so could elevate customers’ charging experiences and even breed brand loyalty.

SO, ARE GAS STATIONS AND ELECTRIC CARS INCOMPATIBLE?

Sometimes, it feels like gas stations and electric cars are like water and oil — they just don’t mix. But that couldn’t be further from the truth. Contrary to popular belief, the rise of electric cars doesn’t necessarily spell the end of gas stations.

Sure, the market share of EVs is expected to grow in the coming years if the battery costs come down and the aging US power grid gets addressed, with Goldman Sachs expecting about half of new car sales to be EVs by 2035. But according to the Bureau of Transportation Statistics, the average age of vehicles in the United States is over 12 years old. So even if the EV market share increases substantially, internal combustion vehicles should remain prevalent for the foreseeable future. As such, gas stations will continue to play a vital role in fueling traditional vehicles while ideally catering to the needs of “early” EV adopters.

Additionally, advancements in hybrid vehicle technology and alternative fuels may offer further opportunities for gas station owners to experience the best of both worlds and gradually adapt to evolving consumer preferences. Ultimately, the rise of electric vehicles may present challenges for gas station owners, but it also offers opportunities for adaptation and growth. By diversifying your offerings, embracing innovation, and catering to the evolving needs of consumers, you can adeptly navigate the transition to an EV era.

STAY COMPETITIVE WITH VENTURE FUELS

While we can’t predict the future, it’s reasonable to expect customers to still need gas for a while. At Venture Fuels, we are committed to providing dependable fuel solutions so you can keep your operations running smoothly. We provide quality branded and unbranded fuel to gas stations all across the Midwest. Contact us to learn more about our wholesale fuel.