Will EVs Trigger Death of Gas Stations?

Gas stations have been a staple of our roads for more than a century, but the emergence of electric vehicles is suddenly challenging the very survival of these familiar features of American roads and highways. As more people buy EVs, different businesses, such as gas stations, convenience stores and even standalone charging stations, have developed to meet the demand to avail charging facilities to motorists on the go.

A close look at the infrastructure bill passed by the Biden administration reveals an ambitious plan to boost EV charging infrastructure by building at least half a million charging stations along major highways so that people making long trips in their electric vehicles aren’t deterred by an inadequate network of chargers. The concern is that people don’t want to be caught “in the middle of nowhere” with an empty battery and no charger in sight.

The Biden plan seeks to establish a charging station every 50 miles along major highways, and those facilities shouldn’t be a mile away from the road. In short, the facility should be on the highway, and this requirement is good news to gas stations because they exist at truck stops along major roads. Consequently, these stations are likely to see financial help set up for charging posts, which gives the gas station industry an initial advantage regarding who gets to control the EV charging market.

However, other establishments such as convenience stores are seeking to capitalize on the time that shoppers spend doing other things, such as filling a prescription or watching a movie, to avail charging in the interim. This prospect is attractive, because it means that motorists don’t have to allocate dedicated time to charging their vehicles. Instead, they can go shopping, and by the time they are done, the DC fast charger at the mall they visit will have refilled their batteries.

Interestingly, this jostling for who will be key in providing charging services to motorists has pitted entities that have been allies, including utility firms and gas stations, against each other. Most utility firms have monopolies in the areas where they operate, and that gives them leeway to set electricity prices that they deem appropriate for the investments they make toward establishing the distribution system.

Gas stations are fighting to get electricity sold to them at wholesale prices so that they can make a profit by providing charging services, and the utility firms are fighting to maintain the status quo in addition to jumping into the fray to provide charging stations to motorists. This is a war in which one side may win a skirmish or battle here and there, and then the other side wins an advantage. How these fights are finally settled for the long term may dictate whether gas stations die out or, like the cat with nine lives, remain the key feature where buyers of EVs from the likes of Lucid Motors (NASDAQ: LCID) get to charge those vehicles.

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