Skip to comments.Cashing In On Vehicle Charging
Posted on 10/22/2011 7:43:55 PM PDT by 2ndDivisionVet
On verdant green
Invent a turn
Invent a dream
The new machine
So go the lyrics to a recent popular childrens song aptly titled Electric Car by 80s nerd rock band They Might be Giants. Proof that even at so young an age, we are being indoctrinated into the delights and benefits of electric vehicles. But is this new machine a genuine reality for our country and can convenience retailers carve out profitable space for the technology on their lots?
Its a safe bet that consumers will eventually swap their gas-powered cars and trucks for rechargeable models, top global consulting firm McKinsey predicted in June of 2009.
But there exists justifiable skepticism that convenience stores will trade gas pumps for electric vehicle (EV) charging stations anytime soon, believes NACS Vice President of Government Relations John Eichberger. But dont underestimate the pace of technology development, he explained. I dont think were that far off from having rapid recharging stations that will preserve our industrys role in powering the transportation needs of the country.
Without a doubt, large-scale vehicle electrification has begun. Federal windfalls mirror unprecedented multi-billion-dollar pushes by automakers. Recently, Car and Driver, Motor Trend, Automobile Magazine and the European Car of the Year Award decorated both the Nissan Leaf and Chevy Volt with a spate of accolades for their mainstream potential.
For the first time, nearly every major car manufacturer plans to roll out at least one plug-in model in the next year. And this past fall, oil giant BP and U.S. mainstay Murphy Oil committed to selling an EV fast-charging ability alongside gasoline and diesel.
The natural extension of electric vehicle charging into the retail sphere has certainly caught the attention of NACS. In addition, the worlds largest c-store chain, 7-Eleven, has been scouting ideal locations for charging, spokeswoman Margaret Chabris said.
Investment is pouring into electric cars and the infrastructure needed to fuel millions of them. And its next-generation retailers that may be those best positioned to capitalize on EV momentum by hosting charging stations and selling 21st century fuel.
Dont EVs Charge at Home Slowly?
The Nissan Leaf runs roughly 100 miles on a full charge. Even the 30- to 50-mile all-electric range of the Chevy Volt is more than the average American drives each day. As such, drivers often refuel via standard outlets at home or at work, which take hours using level 1 (110-120V) and level 2 (220-240V) chargers.
Since conversion of office parking garages into charging stations is likely to be slow and city dwellers must run an extension cord out their window or find a more practical option to charge their EVs, other options must emerge.
Theres also something called range anxiety a drivers fear that the car will run out of juice mid-journey on long and unplanned trips. Additional consideration should be given to the potential of traffic jams if battery life is not sufficient to accommodate a commute extended by several hours, the result could be lots of stranded cars on the roads.
Thats why pundits claim that familiarity and convenience will drive many EV owners to a more on-demand option: zapping the battery with a level 3 (440500V), direct current (DC), gas-station style fast-charge in 15 to 30 minutes. Because quick charging most closely resembles the current model of refueling, retail fuel stations are well positioned to claim the new and burgeoning market. In fact, some retailers have already started.
The Big Guns
BP says 45 of its locations along the West Coast and in Texas, Tennessee and Washington, D.C., will be topping off EVs as early as this month. BPs charging partner, ECOtality, was given roughly $100 million in Recovery Act funding to blanket those areas the targeted deployments of the Nissan Leaf and Chevy Volt with more than 15,000 charging stations. According to BP, its goal is to learn and inform future decisions.
Murphy USA, however, will help make charging stations widely available across its 22-state territory, according to a press release. We are paving the way for development of the infrastructure, leading to adoption and expanded use of EVs, Retail Marketing President Hank Heithaus said.
Murphy will soon break ground on two new locations in Tennessee, sited and designed specifically for EV fast-charging stations. Murphys partner, Cleveland-based electrical distribution firm Eaton Corporation, birthed an electric transportation infrastructure division last July to capitalize on the significant opportunity of EVs, department head Tim Old said.
Eichberger at NACS recognizes the potential for early movers. If the market is shifting from liquid to electric, forward-thinking retailers want to start considering where they might want to put charging stations, he said.
How best, then, can an enterprising convenience store profit from fast-charging technology? Many retailers see an opportunity to boost both in-store sales and fuel margins. At 15 to 30 minutes, charging times could dovetail with the growing profitability of foodservice. But to milk more casual purchases, in the near future, I think youll get a 50 percent charge in five minutes, Eichberger said.
I want retailers to remember that what right now may seem not feasible to their business model, in two to five years, may indeed be extremely feasible and in growing demand, he continued. Beyond drawing customers inside, electric fill-ups could command profit margins of more than 100 percent and still beckon drivers with half-price fuel.
Consider a quick example: To earn 5 percent profit, JoJos Convenience Store charges consumers $3/gallon for gas, which equates to $0.12/mile for a 25 mpg car. On one 15-gallon sale, JoJo shells out $42.75 for the gas and makes back $2.25, a return of $0.15/gallon or 5.26 percent. JoJos charges a flat rate of $5 for EV quick-charges per 30 minutes. That takes a 24 kilowatt-hour (kWh) Nissan Leaf battery from empty to 80 percent and equates to $0.0625/mile. At average utility rates ($0.125/kWh) JoJo pays only $2.40 for the electricity, making back $2.60 or 108 percent profit.
Pricing for the premium drivers who will pay for a fast charge requires some regulatory maneuvering. Its illegal to tack on a per-kWh profit when reselling electricity, so ECOtality Vice President of Corporate Development Colin Read suggests charging an access fee. The timed session type of billing system could toe the line while dialing in a profit margin, a model Eichberger acknowledges could help convenience stores avoid the pitfalls of becoming a regulated utility.
Cost will depend on the seller, tax credits and installation. Nissan sells a fastcharger in Japan for under $18,000, while many stateside models cost $40,000 to $50,000. The latter is roughly the cost of a new gasoline pump, but in some areas the cocktail of tax incentives at the federal, state and local levels could effectively slash the cost to near zero. Many tax credits, grants, loans and other incentives are listed at eere.energy.gov. Interested retailers can also request to have a charger installed by ECOtality and the federally funded EV Project at theevproject.com.
When investing in a charging provider, Youre going to be looking for experience, hardware durability, affordability and after-purchase servicing, Eichberger said. Some companies also charge a fee to manage networked terminals, while others sell standalone units.
Installation costs can vary widely but Eichberger advises sewing cheap, easy seeds now to reap fast setup later. If you are renovating or building, it does not hurt you at all to run a couple thousand dollars (or less) of the electric infrastructure out to potential recharging stations, he explained. Be ready to pounce when the time is right.
Investments in charging by progressive convenience stores will likely keep pace with the rate of EV adoption. Amid recent predictions of $5 a gallon gasoline, Eichberger believes fuel prices are critical to the pace and scale of electrification.
Global banking giant HSBCs bullish forecast is for 17.88 million annual plug-in sales by 2020, or just under 19 percent of global market share, HSBC reported in September. J.D. Power Automotive Forecasting calls for adoption at the low end 3.28 percent of global sales in 2020 while bulls like HSBC argue ambitious government targets will drive penetration much higher much sooner.
Thats one of the reasons the International Energy Agency predicts more than half of global sales as electric by 2050. That said, Eichberger cautions against too rosy projections. Even if future sales convert to 19 percent electric vehicles by 2020, the fleet turnover rate is estimated to be around 20 years or more. Such a sluggish rate will likely prevent EV vehicles from becoming a majority on the roads for quite some time.
Further, in 2008 the U.S. Department of Transportation reported there were 256 million vehicles in the United States, of which 137 million were classified as passenger cars. That leaves 119 million on-road vehicles that are not in-line for electrification.
In short, while there may be some opportunities for convenience retailers to begin offering electric recharging facilities at their locations, the demand for liquid motor fuels is likely to remain strong for the next several decades. So the door is not closing anytime soon on traditional motor fuels and the future of electric vehicles seems hopeful at least. As They Might Be Giants put it: Electric car; So good, so far
Yeah, 15 minutes (never mind 30) for a refuel. Can’t wait. (Duh - you’ll really have to plan your day around that too!)
Oh, yeah, like the boss is really going to like a hike in the electric bill because everyone is stringing extention cords everywhere.
Average? Really? Many people here commute to the city and that's not even close to getting them there. 30 miles won't get me to the grocery store and home. The 50 might if I don't run any other errands. Of course, that'd mean another trip into town to take care of those other errands which defeats the purpose. I thought Moochelle was going to put a grocery store within walking distance of everyone. I guess I can put that along side that purple unicorn her husband promised me.
Cheaper gas stations already attract so many patrons that the line to the pumps spills into the road. That's when an average fill-up takes 3-4 minutes. If the charging now takes 30-40 minutes then the line will be so large that you need a special parking lot built for those cars. How many cities have the free land for that, and now many corner station owners have the dough to pay for that?
The EV will work only when the technology delivers us a battery that carries enough joules for a 200-300 mile trip, charges from 0% to 100% under 5 minutes, and can take tens of thousands of recharges without losing capacity. That's what the gas tank does in a regular car. Oh, it also should cost about the same as an empty gas tank :-)
I'm interested in technology and I'm working with technology; I have an EE education. However I just don't see how modern batteries can make any practical sense in a car. They can't even power our laptops for more than a couple of hours!
zapping the battery with a level 3 (440500V), direct current (DC)
Those guys need to learn the meaning of the word "bomb" because that's what they are building. Can you imagine the energy flow per second that is required? What will happen if there is a little more resistance? Will the fire engulf only that one car, or it will consume hundreds more? Those are important questions, and we answered them when gasoline was adopted.
JoJos charges a flat rate of $5 for EV quick-charges per 30 minutes.
Wishful thinking. JoJo will charge as much as the market will bear. In the end the cost of charging will be the same, if not more, than the cost of gasoline. As matter of fact, chargers will be also more expensive (a captive audience) and if installed outdoors they will need service. On top of that, who said that the power company will not want a piece of the action? Energy is currently a very limited resource due to NIMBY and other issues that peopel are well aware of. The power company would rather ration the energy, that's what they did in CA in Enron times.
It is a hot day in California. Everybody goes to work in their EVs and plugs them in at work to recharge them for the ride home. The power goes out. Everybody is sent home because no one can do any work. The recharges are nowhere near complete. By the end of the day there are thousands of EVs stranded on the roads with empty batteries.
BP says 45 of its locations along the West Coast and in Texas, Tennessee and Washington, D.C., will be topping off EVs as early as this month. BPs charging partner, ECOtality, was given roughly $100 million in Recovery Act funding to blanket those areas the targeted deployments of the Nissan Leaf and Chevy Volt with more than 15,000 charging stations
That is what? 2 outlets for every plug in out there?
More porkulus waste.
NIMBY (Not In My Back Yard) has now been replaced by BANANA (Build Absolutely Nothing Anywhere Near Anything) so please make a note of that.
I suggest they stick with slurpies
How about electrifying the commercial fleet first and working out the bugs there rather than using US workers as guinea pigs?
I saw one (one!) electric car plug-in parking spot in front of a Kohl’s department store in Minneapolis today.
I was in my fossil fuel burning car in a parking lot traffic jam so I couldn’t check out the details. I did note it was the only free parking spot right by the entrance. Soooooo tempting. :)
pie in the sky economics....
consumers will what? why? Will it be a government mandate??
Yes, I love how miraculously the EV car can be both cheaper for the consumer AND get more profit to the distributor than gasoline in this story. Amazing!
I’m an ME of 15 years (quit for mothering) and yes, I tend to be skeptical of these things. It’s great to work on ideas like this but not just leap at pie-in-the-sky ideals as if they are real. Least of all is it OK for the People with Big Guns to tell all of us we must use EV and somehow Companies must produce EV out of thin air (hence my tagline).
I’m tired of the Enviro-Mental religion.
I’ll never forget Preakness Day, Baltimore, 1998. And that was strictly based on everyone running air conditioners full up.
Extremely cold weather takes a toll on batteries—even batteries for electric vehicles. Also,...
Ford warns electric cars may be only for the rich
BMW North America CEO: Electric vehicles “won’t work for most people”
Consumer Reports says GM Volt falls short on range
How GM “Lied” About The Electric Car
U.S. Rethinks Electric-Car Fuel Ratings
Electric cars may not be so green after all, says British study (another lib myth down the tubes)
Gallup poll shows 57% of Americans won’t buy an electric vehicle
I really annoy people with my "Drill Here, Drill Now!" Bumper sticker.
It makes them livid..... I'm having a ball!
I could care less what you drive. The government has no business subsidizing or mandating or even using tax breaks to “encourage” anything IMO.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.