Two-thirds of Americans are interested in electric cars. Sales of EVs hit a record of more than 300,000 in the first half of the year. Everything seems to be going well for EVs and their makers. And yet, gas station owners are having trouble justifying the costs of installing EV chargers because the economics don’t make sense.
The Wall Street Journal’s Jennifer Hiller wrote in a recent article that some gas station owners are adding EV chargers to ensure their future market share in a more EV-dominated future. Many others, however, find it hard to justify spending more than $100,000 to buy and install a charging unit.
This seems to be one more example of the vicious circle the EV industry has found itself in, despite the Biden administration’s pledge to fund the installation of 500,000 charging stations across the United States. To compare, there are some 150,000 fuel stations in the country, according to the National Association of Convenience Stores. So, the plans are great. But they will also be challenging for gas stations. And yet, owners are still reluctant to cough up the money needed to add charging points. The reason may be that EVs still make up a tiny portion of total car sales, so any investment made in the installation of a charging point would take a while before returns start coming in. Carmakers have ambitious goals, and so does Washington. Earlier this month, the two came together to bless a sales ambition of EVs making up 40-50 percent of total sales for the biggest carmakers in the U.S. by 2030. Carmakers will be spending $330 billion on that ambition. Yet consumers, as interested as two-thirds of them may be in EVs, are still wary of them.
The usual reason—range anxiety and the availability of charging points—has a lot to do with that. Even though most people drive much less on a daily basis than an EVs range would support, they want to know that the car won’t leave them stuck somewhere with an empty battery. However unlikely this sounds, habits that get passed down from generation to generation may be even harder to break than quitting smoking.
Quick access to an EV charging point is still a rarity in the United States, a recent report revealed. It found that about a tenth of the population of the United States’ 50 largest cities has a public EV charger within a five-minute walk. When New York and Los Angeles are taken out of the equation, the portion of people with quick access to a charging point drops from 9.7 percent to 6.2 percent. This might be motivating for gas station owners with the means to secure their long-term future, but it is discouraging for drivers who are considering an EV and for smaller gas station owners with limited cash.
Then there are malls, which are also building EV charging points, and the simple fact that many EV owners can charge their EVs at home. This is good for EV adoption but makes it even harder for gas station owners to decide on taking the risk to invest six figures in EV charging points. What makes the case even harder to justify is that because of the minuscule number of EVs currently on U.S. roads, even the existing charging points are unprofitable.
A charging point needs to be in use 30 percent of the time to turn in a profit, according to the chief executive of Pilot Co., a retail and fuel station operator of some 900 locations in the United States and Canada. Currently, charging points are in operation just 5 percent of the time.
“The economic case today for EV charging investment does not exist,” Shameek Konar told the WSJ’s Hiller.
By Irina Slav for Oilprice.com
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