Tesla fuelling industry shift
Potential deal with gas station, convenience store chain could pay off in long haul
One of the biggest problems for electric cars is encouraging adoption among drivers who may be skeptical about recharging. What if you run out of power and there isn’t a charging station for kilometres around? Although this isn’t much of an issue for daily commuters who can fill up their electric vehicles (EVs) at home every night, it’s a much bigger deal for long-haul trips.
To help address that problem, Tesla is in talks with a major gas station and convenience store chain that could vastly expand the EV-maker’s network of charging stations — and reduce the likelihood of its customers getting stranded on an hourslong drive.
The chain in question, Sheetz, operates hundreds of retail outlets across six states, mostly in the mid-Atlantic region. It does nearly $7 billion (U.S.) in business every year. It already has eight locations where EV owners can charge their non-Tesla cars, scattered throughout Pennsylvania and North Carolina. And now it could add Tesla’s charging infrastructure to the mix.
“We’ve had discussions with them about putting their chargers in our stores,” confirmed Michael Lorenz, Sheetz’s executive vice-president of petroleum supply, in an interview. “We haven’t done anything yet, but we’re continuing those discussions.”
Tesla declined to comment on the negotiations with Sheetz, but acknowledged in a statement that it is actively courting gas stations, hotels and restaurants in its bid to install high-speed electric chargers across the U.S. Lorenz declined to say how many Sheetz stations may ultimately be outfitted with Tesla chargers.
The potential partnership between Sheetz and Tesla reflects the beginning of a wider awakening in the gas station and convenience store industry. While EVs currently account for less than half a per cent of new car sales, that figure is expected to grow; Bloomberg New Energy Finance estimates that within six years, electric cars will be as affordable as traditional gasoline-powered vehicles.
By 2040, roughly one in three new vehicle sales could be an EV, according to the same Bloomberg report.
Few gas stations currently allow for electric vehicle charging, largely because the technology doesn’t fit with their business model. Many gas stations rise and fall on the sale of convenience store goods while customers are filling their cars up with fuel. The more cars that pass through the station, the healthier the business.
EV chargers undercut that volumebased strategy: Whereas it takes two to three minutes to fill a typical gas tank, it often takes 15 minutes or more to put significant range onto an EV battery. To the convenience store, that extra time represents lost potential revenue.
Re-envisioning gas stations could allow them to sell pricier goods, such as high-end coffee and prepared foods. (In other words, they may look a lot more like a Sheetz.) And that could help cushion these retail outlets’ bottom lines during the period of transition.
This business model, in which customers stay longer and spend more, suggests it’s no accident that Tesla has made restaurants and resorts a pillar in its charging strategy.
Today, retailers who have installed EV chargers have typically done so because the installer fronts the hefty cost. But that arrangement may not last forever.
Tristen Griffith is the president of the Sacramento 49er Travel Plaza, a truck stop that spent the past year researching EV technology.
Recently, Griffith made the decision to let a third-party company, NRG Energy, install a set of EV chargers on her commercial property. She’s paying practically nothing for it, she said.
“We want to sell gas and diesel, but our future is electric vehicles, and trucks are going to be driverless,” said Griffith. “Times are changing, and we need to keep up with that change as well.”