Will electric vehicles kill off gas stations? Fuel companies prepare for an uncertain future

In the era of the electric car, will gas stations fade away like horseshoe makers did when internal combustion engines replaced horses? The CBC's Laura McQuillan has an interesting article.

Jessica Friesen's family has been pumping gas in Ontario's Niagara Region for more than five decades. But as electric vehicles increasingly take over Canada's roads, some experts warn that her industry's days are numbered.

Friesen, however, is unfazed. Since her grandfather opened the first Gales Gas Bar location in 1967, the family business has grown and adapted over the decades, and it now comprises 14 gas stations, as well as convenience stores and fuel delivery trucks.

"I feel we've got a very good future ahead," Friesen, the company's third-generation owner and CEO, told CBC News.

"One of the reasons that we are still independently owned is because we have been able to diversify our business."

Industry-watchers say diversification will be the key to survival in the decades to come, with the federal government mandating that all new cars and light-duty trucks sold in the country be zero-emission vehicles (ZEVs) by 2035.

Those vehicles include battery-electric (which require charging with electricity), hydrogen fuel cell (which run on hydrogen, currently available at only a limited number of gas stations in Canada) and plug-in hybrid electric (which can can run on electricity or gas).

Zero-emission vehicles are currently a small but growing slice of the Canadian vehicle market. Of 1.64 million new vehicles registered in 2021, just over 86,000 of them — or 5.2 per cent — were ZEVs, up from 3.5 per cent in 2020, according to federal government data published in late April.

That's a leap from a decade earlier: In 2011, just 518 zero-emission vehicles were registered in Canada — 0.03 per cent of new registrations that year.

The rising market share comes as more and more ZEV options roll out in Canada, in tandem with an increased government focus on tackling climate change — including by cutting transportation emissions, which account for about a quarter of Canada's CO2 emissions.

The federal government's strategy won't mean a complete ban on gas cars. In 2035, you'll still be able to buy one that's used, or you could buy a new plug-in hybrid and keep putting gas in the tank.

But that would still mean declining demand for petroleum — and a big dent in gas stations' earnings if they don't find a new model.

A new pain at the pumps

Research by international consultants paints a dim picture for gas stations' future. Boston Consulting Group warns that up to 80 per cent of service stations may be unprofitable by 2035, while Sia Partners projects that 43 per cent of Europe's gas stations will be out of business by 2050.

Both consulting firms say the industry's survival will hinge on figuring out, and adapting to, what future customers will want — everything from better food options to fully automated checkouts and, predictably, electric vehicle charging stations, of which there are currently more than 5,000 in Canada.

Canada's major fuel companies have already begun that shift, building their own cross-country charging networks — many of which will be located at existing gas station sites.

Those sites will have to rethink their business model as customers are forced to spend more time at the stations waiting for cars to charge. It can take 15 to 45 minutes, or longer, to charge an electric vehicle's battery to 80 per cent — depending on how empty the battery is and the capacity of the charger.

As a result, gas station operators are considering whether a driver wants to spend that time in a convenience store, sitting down for a meal, shopping for groceries or just waiting it out in their car?

Read the full article at CBC.

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