Next, Tesla Will Disrupt The Gas Station Business

Tesla has already disrupted the automobile business. Does anyone think the world’s automakers would be pushing this hard to bring electric cars to market if it wasn’t for the Tesla Model S? It has only been on the market for 4 years, but already it has the highest customer satisfaction of any car ever made, owners love their service experience, and Consumer Reports rates it highest of all cars in its annual rankings.

Tesla Supercharger

Tesla is also well on its way to disrupting the battery storage business for automobiles and the electrical grid. It is disrupting the way cars are sold with its online, direct from the factory sales model. And it is disrupting the EV charging business with a network of Superchargers that make everything else on the market look like its from the last century.

Next on the Tesla “to do” list is disrupting the gas station business. It is in talks with Sheetz, a large chain of gas stations/convenience stores that operates in the Mid-Atlantic region. It has hundreds of stores in six states and grosses more than $7 billion every year. “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 country.

The number of electric cars on the road in America is still quite small at around 0.5%, but Bloomberg New Energy Finance estimates that within six years, electric cars will be as affordable as traditional gasoline-powered vehicles. It thinks by 2040, roughly a third of new vehicle sales could be electric cars.

Change is coming and the smart people want to be out in front of it. Industry experts are advising gas station owners to install the wiring that will be needed for EV chargers now as part of routine upgrades, even if the chargers themselves don’t get installed until later. It’s cheaper to do the work while the facility is under construction to install new pumps and tanks than it will be to rip everything up again later to add charging equipment.

The current business model for gas stations will undergo a sea change. Today, it is all about getting customers in and out as quickly as possible. The stores generate much of their revenue from quick, point-of-sale purchases like coffee, cigarettes, and snacks. But that model is under pressure. The amount of gasoline pumped will decline about 20% in coming years, as cars with better gas mileage and more electric cars are added to the mix.

That’s according to John Eichberger, executive director of the Fuels Institute, which was founded by the National Association of Convenience Stores. “Those kiosks that just sell gallons and smokes are going to have to change,” said Eichberger. “They’re going to lose gallons. Plain and simple, no way around it.”

He thinks the gas station of the future will look radically different. It will be more like a restaurant or highway rest stop than a convenience store. It will focus on more inviting interiors where customers can relax while their cars recharge. It will sell a selection of higher priced products like high end coffee and prepared foods. Tesla is driving the coming changes and wants to be part of the action, which is why it is talking with Sheetz.

The question is, what is Tesla’s long term plan? Elon Musk has already said the new, mass market Model 3 will not come with unlimited lifetime Supercharger access standard, although it may be included as an extra cost option. Is the company planning a parallel system of EV chargers for its Model 3 customers? Might it make the chargers it installs at traditional gas stations available to drivers of electric car made by other companies? Could Tesla be the charging company of choice in the emerging world of electric automobiles?

No one knows, except perhaps Elon Musk and few Tesla insiders. The only thing we can say for certain is that if Tesla gets involved with traditional gas station operators, things down at the local Gas ‘N’ Go will be vastly different soon.

Source: Washington Post  Photo credit: Tesla Motors

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.