“What’s good for our country is good for General Motors. …” said Engine Charlie Wilson, former chairman of General Motors (GM). That was in 1953. Some 71 years later, Engine Charlie’s adage has become a question. Will GM be good for convenience stores? How will its corporate commitment to the future of electric vehicles (EV) and hybrid vehicles be felt on c-stores’ bottom lines as customers roll down the road? How long will it take?
GM has spent $2.2 billion on its new Detroit auto and truck assembly factory, named Plant Zero, for zero emissions. With 200,000 units produced in 2024, GM’s forward plan was that half of all autos, SUVs, vans and light trucks in production by 2035 would be electric. This is turning out to be a little aggressive, but the design and manufacturing budget of $160 billion will still produce an estimated 8 million units over the next 10 to 12 years. GM isn’t alone.
In 2024, 16.6 million new vehicles rolled off showroom floors. Just under 8% of them are EVs. Tesla’s share is down to 48%, even with sales growth. GM and Tesla EVs are being joined by Hyundai, Kia, Toyota (Lexus), Honda and European brands. Ford is committed to hybrids to go with their all-electric Mustang EV. Lower sticker pricing is on the way as battery costs come down and better deals are offered to sustain momentum.
EV Range Is Up. Prices Are Down. Growth Is Steady.
Recharging infrastructure is catching up with more, quicker charging stations and unitized plug-in technology. This will help solve the No. 1 concern of EV purchase resisters. Chevy’s redesigned Bolt list price starts at $26,000 including a home charger. A 2-year-old used Bolt can be had for $16,000, with money left over for a breakfast burrito and fresh coffee when you stop for a recharge.
In 2024, 288 million registered light vehicles (cars, SUVs, pickup trucks, and vans) rode America’s roadways. The number of electric vehicles rose from 670,000 in 2020 to 4.7 million at the end of 2024; commuting, working and carpooling kids. A 700% increase but still only 1.6% of the total. Change is coming.
Best production estimates are that 2030 EV sales will hit 8 million new units, not including a glut of lease turn-ins at bargain prices. The accumulated number of EVs in use in five years will reach around 28 million or 10% of all vehicles including pickup trucks and vans. Already 23% of all vehicles sold in California in 2024 were EVs.
What’s In It For Convenience Stores?
In theory, 10% EV vehicles on the road tomorrow is a 10% annual loss of c-store fuel business to home charging; currently about $70 billion. By coincidence, it’s an amount roughly equal to today’s tobacco backbar gross revenue. It won’t come to that. Here’s why.
With on-site EV charging, a c-store becomes a 21 st century oasis versus a Starbucks with a smaller menu and slow drive-through. 7-Eleven, Sheetz, Kwik-Trip and others have already begun adjusting to EV reality. Starting today, it will take about two years for c-store chargers to become a marketable customer benefit. In 10 years, figure more than 20% of all customers will be driving electric; mostly pickups, and SUVs with more e-vehicles used for business.
Today, while more than 80% of cars and trucks gas up at c-stores, 80% of EV charging happens at home.
A full charge takes about 36 minutes while you sleep. “Range anxiety” from a lack of recharging infrastructure will go away as more charging stations are deployed. Where will they be needed? To realize the scale, compare today’s 30,000 charging stations to 152,000 c-stores. The federal government wants a lot more, and has a nice budget to take most of the investment out of setting them up.
Charging technology is becoming unified. A six-minute EV top-charge (80 miles) at lunch or on the way home is long enough to bring customers inside for the promise of better food, better coffee and better cigars rather than standing outside by the fuel pump filling up. New charging station designs can handle up to four vehicles at once. There’s plenty of time to rearrange the fuel pump and e-charging furniture.
Build It And They Will Come Inside
A six-minute e-charge is the same length of time as 12 TV commercials before the fourth quarter of a football game. Coming in for a snack during a charge should be as easy as walking out to the kitchen, but with a lot more food choices. While the promise of EVs is being met, c-stores are competing in a new era of quality and variety, upgrading their foodservice and beverages with prepared meals, deli service and sit-down areas. This is primarily a response to the perceived competition from quick-service restaurants (QSRs), but also to offset the continued decline in tobacco backbar volume.
According to Nielsen IQ, 2024 cigarette pack volume declined nearly 17% vs. two years ago. The FDA has some ideas you won’t like about nicotine pouches. Nicotine-free smokes and more imported cigars are still waiting for the flavor bans. For every 10% tobacco price increase, consumer purchase volume goes down by 7%. Tobacco price and tax increases aren’t going away. If current trends continue, cigarette sales volume will have fallen by around $12 billion by the end of this decade. Electric cars won’t have ashtrays, but they have cup-holders and Bluetooth so EV customers can order coffee and a snack in advance, and maybe something more to take home for later.
John Geoghegan has spent the last 30 years in the tobacco business, including vice president strategic planning at General Cigar Co., U.S. manager for DjEEP Lighters, head of marketing for Kretek International Inc. and manager of LaMirada Cigar Co. He began his career 57 years ago at Procter & Gamble. Geoghegan is a graduate of the University of Cincinnati. He lives in Laguna Niguel, Calif.
