Yep, once we reach a tipping point, we’ll see a snowball effect where low-margin gas stations are forced to close, others have to push their prices up, BEV’s become even more attractive and so on.
With the number of cheap (mostly chinese) BEV’s available now and coming in the pipeline we’re already seeing some very cost competitive propositions.
I think that point is very close, maybe mid-next year if all goes well.
Y'all understand that gas stations make almost all their money from snacks right? They make maybe up to 10 cents a gallon on gas. It's always been a low margin business, but since gas can sit in a gas station's below ground tank for months at a time, it's not really a concern for them if people start filling up gas less and start super-charging more. They will simply have less fuel resupplies. That's all.
It's funny, in another thread I pointed out the convenience stores, arguing that it will incentivize shutting the pumps down sooner rather than later. At a certain point pumps need replaced, and won't do it if they're not going to pay themselves off.
A lot of stations will go out of business if they only have say 50% of the sales volume though. Or even 70%.
Places lake motorway service stations where people will supercharge will do just fine, but your local gas station will have to compete will home chargers, parking lot chargers, etc. Not a lot of people will choose to shop at an expensive gas station shop if they don’t have to.
People aren't going to stop eating snacks and munchies just because they get an electric car. And I don't know if you've ever been to a Wawa or not but a lot of convenience stores are starting to serve decent quality food as well.
Selling gas is hugely profitable, labor cost for dispensing gas is zero. It's why legacy c-store operators like 7-11 and Wawa now include gas at almost all new locations they build.
It's not hugely profitable, its simply a draw for foot traffic to sell more snacks, alcohol, and food. 7-11 and Wawa have been serving gas since as long as I can remember.
Gas stations make about 10 cents per gallon gross profit on the gas pumped. That's before capital equipment depreciation, equipment maintenance, facilities staff, cleaning, etc.
It's profitable, but it produces a minority of the business's profit. The bulk of the profit is from higher margin snacks, drinks, alcohol, cigarettes, lottery, etc.
A switch from gas to electric is not going to affect most convenience stores.
> Gas stations make about 10 cents per gallon gross profit
According to 7-11, 39.75 cents per gallon in first half of 2022. Also, while same-store merch sales grew 4.9% y-o-y, gas gallons sold grew 44%. (page 25 of the link)
> 7-11 and Wawa have been serving gas since as long as I can remember.
You must be young, Wawa was not traditionally a gas station. It opened its first store in 1964 and had over 500 by 1992, but the first with gas was in 1996.
7-11's history and relationship with gas is more complex, but most legacy stores were freestanding store only (no gas).
So, EVs achieve parity with ICE on 2025/26, add 12.5 years.
2037-38 seems like a reasonable estimate for ICE vehicle market becoming smaller than EV, and all the accompanying things that go with it, like disappearing gas stations and more and more restrictions on ICE vehicles (e.g. city centers, commercial sales only, etc.)
I think there are quite a few reasons ICE cars bought now or recently won't get to their normal lifespan, especially in urban areas which probably would have already restricted them if there were economy EVs to help politicians deflect claims of elitism. They also have the tank liability and space issues that already burden downtown gas station economics.
If the diesel transition takes time, I think the gas pumps will also stay along the major truck routes, but one might feel like a NG fuel user looking for an airport station in regions with a lot of urban density.
(Even without these pressures, an EV is already 1/3 the price to operate so that pushes ICEs toward infrequent users which accelerates the downward spiral of gas stations and gas consumers.)
Using that stat is interesting; how many gas stations will close in 4 years, 30% of addressable market is a dark outlook for investors, 50% cut in 6 years will reshape many localities.
