The NAG/YEO Spring Leadership Series wrapped up with its fifth and final session with a June 16 webcast, discussing of the topic “Fuel Disruption: How a new administration will impact the fuel market by mandating electric vehicles and flex fuels.”
NAG Executive Director John Lofstock welcomed John Eichberger, executive director of The Fuels Institute, and Jeremie Myhren, chief information officer with travel center operator Road Ranger and chairman of NAG’s Young Executives Organization.
Eichberger stressed that the internal combustion engine (ICE) will have a long off-ramp, with battery electric vehicles representing roughly 2.0% of light duty passenger vehicles. Even when plug-in electric vehicles reach a projected 60% of sales by 2040, they’ll only be slightly more than a quarter of the passenger vehicles on the road. That will leave an awful lot of ICE vehicles still thirsty for fuel.
“We’re going to see demand start to decline because of fuel efficiency and EVs,” noted Eichberger, “but it’s not going away overnight.” Still, convenience and fuel retailers would be wise to keep an eye on the EV and cleaner emissions fuels market as it evolves.
The EV market, he said, is in its early developmental stages; it’s accelerating but is nowhere near the revolution hyped in the mainstream media. EV market growth hinges on three vehicles variables, according to Eichberger: Choice, Cost and Charging.
Choice of vehicles is expanding. Cost is coming down. “Where we’re not there yet is charging infrastructure,” he said. There is still a level of inconvenience to bring power to plug-in electric vehicles. He stressed that the infrastructure must build out before mass adoption will be able to take place.
The bright spot, though, is that the convenience industry straddles the top two types of businesses where consumers have said they’d like to see chargers: Grocery stores (66%) and restaurants (37%), according to a 2019 survey by the U.S. Department of Energy’s Alternative Fuels Data Center.
That territory is wide open. Right now, Eichberger said, only 2.0% of chargers are located at grocery stores and restaurants. That gives c-stores plenty of room to get a jump on competitors and begin serving those customers that they already have as they gravitate to plug-in vehicles.
For Myhren’s travel center chain Road Ranger, the clientele may be slightly different. Road Ranger locations feature a traditional fuel canopy as well as a truck fuel canopy. “This topic gets a little more complex in our space,” he said.
With the market still in its infancy, he advises c-stores resist the hype. While the demand side for EV chargers can change quickly, the reality, he said, isn’t as deep as the hype makes it out to be.
He stressed that the convenience industry should focus on protecting its relationship with the customer. That strategy doesn’t involve an benchmark number of EVs or charging lanes. He offered Road Ranger’s five elements for an alternative fuels strategy: build for the future, stay flexible, watch the demand side, recognize the hype and protect c-store relevance.
Myhren also raised the to date under-the-radar subject of highway infrastructure maintenance and improvement that is so closely tied to fuel taxes and the Highway Trust Fund. Both he and Eichberger see that as something Congress and the executive branch have consistently failed to address as fossil fuels lose favor.
Eichberger also pointed out that much of the hype behind EV growth is due to its support by the environmental community. He warned, thought, that the time will likely come when environmentalists turn their focus away from lower emissions and toward EV batteries, questioning their environmental impact.
Eichberger also noted that the Biden administration is fully invested in electric vehicles. But things change, he said. There are other options. “I think over time the electric vehicle market is going to grow,” he said. “I still have great hope for the hydrogen vehicle market.”
The solution, according to Eichberger, will take a diverse suite of options. “We need to reduce emissions. We can’t wait for EVs to save the day,” he advised. “We have to have multiple strategies.”
All five sessions of the NAG/YEO Spring Leadership Series are available for viewing on-demand at the NAG Website Spring Leadership Series page at NAGconvenience.com.