Fuel Retailers Accelerate EV Charging Expansion Plans

A deep dive into new data and reporting from BloombergNEF

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Introduction

The automotive industry is undergoing a profound transformation, as many automakers across geographies, drivers, and politicians across jurisdictions from municipal to national and international levels set policies and offer subsidies to accelerate a global transition from gasoline-powered vehicles to electric vehicles (EVs) and plug-in electric hybrids (PHEVs).

Here are a few fast facts on where this transition stands today:

• Global EV sales in October 2024 were 24% better than in October 2023 (Rho Motion).
• More than half of new car sales in China from July 2024 on had a plug (Rho Motion).
• Nearly 90% of new light-duty car sales in Norway in 2024 were fully electric, as the country has led the world in terms of supportive federal policy and subsidy allocation for the electrification of transportation (Reuters).
• Sales in the U.S. grew year-over-year, too, as did sales in many other markets. Specifically, EV sales jumped about 12% in Q4 in the U.S. (Cox). Overall, 1.3+ million EVs were sold in the U.S. in 2024 (Bloomberg).
• While EV charging infrastructure has a long way to go in the U.S., 2024 will end up having set a new record for charger installations (Bloomberg – see the below visualization based on DOE data), including many Electric Era charging stations.

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This monumental shift in road transport presents both challenges and opportunities for fuel retailers specifically. While the demand for traditional hydrocarbon-based fuel is expected to decline (albeit still slowly in years to come), the demand for electron-based fuel is poised for significant growth, and electrification of transport has already contributed to increased electricity demand in many markets and jurisdictions, straining power grids and resource allocation. 

Forward-thinking fuel retailers see this trend and are taking proactive steps to adapt their business models to incorporate EV charging infrastructure and to position themselves for sustainable, long-term business success, not to mention to contribute to the future of transport and mitigation of environmental externalities, including but not limited to greenhouse gas emissions from tailpipes. The unfolding transition will allow fuel retailers to tap into new revenue streams, enhance their brands, and differentiate themselves from competitors in the evolving automotive and transportation landscape. The fuel retail industry is accustomed to rapid and significant change, drawing on over 100 years of operating experience. What’s afoot this decade is just another chapter in the evolving story of a core American industry, one that pumps out over $700B in annual sales.

In this post, we will dive into a recent Bloomberg BNEF report on the current state of fuel retailers as they navigate the shift in consumer preferences for EVs and PHEVs.

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The Need for EV Charging Infrastructure

As the adoption of EVs accelerates, driven by factors such as government policy and subsidies, advancements and cost declines in battery technology, and increasing customer demand, the availability of convenient and accessible charging infrastructure is lagging behind charging demand in many regions. This is a critical potential impediment to facilitating even more widespread EV adoption. Fuel retailers, with their extensive network of strategically located sites, are uniquely positioned to address this need, play a pivotal role in expanding EV charging infrastructure, and build stronger businesses in the process.  

To highlight the importance of planning for the continued growth of EVs and PHEVs for retailers, the below visualization from BloombergNEF of projected fuel demand from passenger vehicles in key global markets hits home how retail and gas station business models will need to shift as demand for road fuel levels off and begins to decline in coming decades.

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Understanding the US Fuel Retailer Space

To better plan for the period of transition ahead, it helps to understand how fuel retailers currently operate. Bloomberg cites data from the National Association of Convenience Stores to show that, at present, in the U.S., convenience stores dominate the fuel retail segment, accounting for over 80% of all fuel sales. Over two-thirds of those convenience stores are independently owned and operated, with big players accounting for another quarter of the market. The following data visualization offers a complete breakdown: 

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By adding EV charging services, fuel retailers can reap many benefits: 

1. ‍Maintain and expand: Fuel retailers can unlock new revenue streams from customers who either no longer need gasoline, don’t need as much of it, or otherwise wouldn't stop at their existing locations. Further, they can maintain and grow relationships with existing customers who may soon transition to EVs or PHEVs, even if they haven’t yet.

1. Deepening retention: Providing reliable EV charging can increase customer loyalty with both new and repeat customers, particularly EV owners who may not have access to home charging, drivers who are traveling, or those still weighing whether to go electric.
2. Survive, thrive, and comply: Adapting to the changing automotive landscape by offering EV charging allows fuel retailers to future-proof their business and remain competitive. Further, in many jurisdictions like California, Washington, Arizona, and Colorado, new construction increasingly requires dedicated EV charging-ready parking spaces; offering charging services can ensure compliance.

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The nitty gritty: The intricacies of charging station deployment

When evaluating and venturing into EV charging infrastructure adoption, fuel retailers need to consider several key factors, including questions such as what the most appropriate charging technologies for a location are. This can depend on factors such as location, customer needs, and power availability based on existing grid infrastructure (among other factors). Collaborating with EV charging network operators or technology providers can help fuel retailers navigate the intricacies of charging infrastructure deployment, maintenance, and management, as providing a seamless charging experience is the bottom line for customer satisfaction and retention.

The EV charging market is also becoming increasingly competitive, with various players both domestically and internationally vying for market share, including across geographies. Major oil companies are expanding into EV charging, leveraging their existing retail networks, as are independent charging networks that operate charging stations independently, often in partnership with retail locations. Utilities are also exploring opportunities in EV charging by offering electricity supply and grid management services. Some vehicle manufacturers are even investing in charging infrastructure to support sales of their EV and PHEV models.

Again, fuel retailers face several questions and must consider a variety of factors with respect to this facet of the EV charging market. Deploying EV charging infrastructure requires significant upfront capital investment. Upgrading power infrastructure to support fast charging can be expensive, time-intensive, and challenging for reasons ranging from grid capacity constraints to long lead times to secure transformers. Encouraging widespread adoption of EV charging also requires addressing customer concerns such as range anxiety and charging time.

However, these challenges also present opportunities. While some retailers will balk at the capital outlays and knowledge-building required for EV charging station investment, deployment, and management others will pick up the slack and reap the rewards. There are also several tailwinds facilitating EV charging deployment. For one, many governments—whether locally or nationally—offer incentives to promote the deployment of EV charging infrastructure, which can reduce upfront capital outlays and improve financial returns. Further, battery technology and charging infrastructure are continuously improving, making EVs more appealing to consumers (see the below visualization, also from BloombergNEF). 

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Finally, collaborating with other players in the EV ecosystem can help overcome challenges and accelerate market growth. Identifying the right partner or partners who can help navigate everything from technology evaluation to funding opportunities and physical infrastructure deployment can help a great deal. If you’re a fuel retailer yourself, we are, of course, happy to discuss any of the content or questions raised in this post or data with you at any time.

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Conclusion

The transition to electric vehicles is reshaping the automotive industry, and fuel retailers have a significant role to play (and ideally benefit from) as this societal transformation accelerates. By embracing EV charging, fuel retailers can not only adapt to the changing landscape but build stronger, more sustainable businesses while delighting existing and new customers. 

The opportunity for fuel retailers to position themselves as leaders in the future of mobility is here for the taking in 2025. If you’re ready to heed the call, feel free to get in touch with us here.

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