Will electric vehicles kill gas stations? Oil companies prepare for an uncertain future

Jessica Friesen’s family has been pumping gasoline in Ontario’s Niagara region for over five decades. But as electric vehicles increasingly take over Canada’s roads, some experts warn its industry’s days are numbered.

Friesen, however, is unfazed. Since his grandfather opened the first Gales Gas Bar in 1967, the family business has grown and adapted over the decades and now includes 14 gas stations, as well as convenience stores and fuel delivery trucks. .

“I think we have a very bright future ahead of us,” Friesen, the company’s third-generation owner and CEO, told CBC News.

“One of the reasons we’re still independently owned is that we’ve been able to diversify our business. »

Industry watchers say diversification will be key to survival in the coming decades, with the federal government requiring all new cars and light trucks sold in the country to be zero-emission vehicles (ZEVs) by 2035.

An electric vehicle is charged in Ottawa on April 14. There are more than 5,000 electric vehicle charging stations in Canada, and several companies are rolling out new networks with thousands of additional charging sites. (Francis Ferland/CBC)

These vehicles include electric batteries (which must be recharged with electricity), hydrogen fuel cells (which run on hydrogen, currently available at a limited number of gas stations in Canada) and plug-in hybrids (which can run electricity or gas).

Zero-emission vehicles currently represent a small but growing slice of the Canadian vehicle market. Of 1.64 million new vehicles registered in 2021, just over 86,000 of them – or 5.2% – were ZEVs, up from 3.5% in 2020, according to federal government data released in late April. .

This is a leap from the previous decade: in 2011, only 518 zero-emission vehicles were registered in Canada, or 0.03% of new registrations that year.

The growing market share comes as more ZEV options are deployed in Canada, alongside the government’s increased focus on addressing climate change, including reducing emissions from transportation, which account for about a quarter of Canada’s CO2 emissions.

The federal government’s strategy will not mean a complete ban on gas-powered cars. In 2035, you can still buy a used one, or you can buy a new plug-in hybrid and still put gas in the tank.

But that would still mean lower demand for oil — and a sharp drop in gas station revenues if they can’t find a new model.

A new galley at the pump

Research by international consultants paints a grim picture of the future of gas stations. The Boston Consulting Group warns that up to 80% of petrol stations could no longer be profitable by 2035, while Sia Partners predicts that 43% of European petrol stations will be closed by 2050.

Will electric vehicles kill gas stations Oil companies prepare for
A motorist fills up his car at a gas station in Vancouver on March 4. Currently, electric vehicle drivers may need to charge their vehicle for 30 minutes or more at a charging station – far longer than it takes to fill up on gas. . (Ben Nelms/CBC)

The two consultancies say the survival of the industry will depend on being determined and adapting to what future customers will want – everything from the best food options to fully automated checkouts and, predictably, electric vehicle charging stations, of which there are currently more than 5,000 across Canada.

Canada’s major oil companies have already begun this change by building their own charging networks across the country, many of which will be located at existing gas station sites.

These sites will have to rethink their business model as customers are forced to spend more time at stations waiting for cars to recharge. It can take 15 to 45 minutes or more to charge an electric vehicle battery to 80%, depending on the degree of battery discharge and the capacity of the charger.

So gas station operators wonder if a driver wants to spend that time at a convenience store, sit down for a meal, shop, or just wait in their car?

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Parkland Corp., which owns the Pioneer, Chevron and Ultramar brands, is planning just that by deploying its own network of 25 EV chargers on the highways between Vancouver Island and Calgary.

The Calgary-based company recently sponsored a competition to design future charging stations. The winner was a modular design that could be scaled up or down depending on the location. It offers indoor and outdoor spaces, sustainable materials and solar panels, a far cry from the look of most gas stations today.

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The design, titled ‘More with Less’, by Scottish architect James Silvester, won a competition to design the electric fueling station of the future on February 1. The contest was organized by Electric Autonomy Canada and sponsored by fuel company Parkland Corp. (James Silvester/Electric Autonomy Canada)

” [EV drivers] will want room to stand up, stretch their legs and get some fresh air on a long trip,” said Darren Smart, senior vice president of strategy and corporate development at Parkland.

“We have designed different things that they might be interested in, but I think that will also evolve over time. »

Petro-Canada, which already has 57 charging stations in operation along the Trans-Canada Highway from Vancouver Island to Halifax, is testing different amenities to see what attracts customers.

In Cookstown, Ontario, about 80 kilometers north of Toronto, for example, drivers can sit inside and watch TV, eat a burger on the outdoor patio or take their four-legged friend to the park at dogs on site.

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A dog park is one of the amenities Petro-Canada is testing at its electric vehicle charging station in Cookstown, Ont., north of Toronto, to gauge customer interest. (Suncor Energy)

“The thought was: we’re building a new site, throwing everything away [our concepts] at a time, so we can gauge which ones we think customers really need,” said Patrick Ritchie, vice president of sales and marketing at Suncor Energy, owner of Petro-Canada.

Build it, and the pilots might come

Even as electric vehicle charging networks expand, there is also the question of how they will use them in the future, given that nearly 90% of drivers “always” or “often” charge at home, according to a US study that surveyed more than 9,000 owners of battery electric vehicles and plug-in hybrids in October and November 2020.

Research from the International Council on Clean Transportation, an environmental think tank, estimated that by 2035, Quebec will need about 79,000 public charging stations, compared to 2.3 million home charging stations and 44,000 in the workplace.

But many people living in apartments and condominiums won’t have easy access to a parking spot next to a charger – and that’s a market the oil companies are hoping to tap into.

In fact, Ritchie says, some urban gas stations could be replaced entirely with electric vehicle charging stations if it makes good business sense.

1651568266 786 Will electric vehicles kill gas stations Oil companies prepare for
An electric vehicle charging station is pictured in Burnaby, British Columbia in October 2020. Although most drivers charge their electric vehicles at home, people living in condos and apartments may not have easy access parking near vehicle charging stations. (Ben Nelms/CBC)

“In Vancouver, we have properties that we’re looking at where … 10 years ago we would have said, ‘This should be deeded. It doesn’t make sense to use this property this way. But now we’re saying, “We should install EV chargers, because there’s a condo next door. » »

Find a room for a longer stay

In the meantime, small gas station owners must weigh whether to convert valuable forecourt space to electric charging stations, or when, said Rob Hoffman, director of government and stakeholder relations at the Western Canada for the Canadian Fuels Association.

“The main concerns right now are, will it be economical? ” he said. “If we install charging stations, people will generally have to stay at a site for 30 or 60 minutes, or even longer. Do we have room for these people? »

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Electric vehicle maker Tesla is building its own charging network across Canada, including this charging station in Markham, Ontario, featured in April 2020. (Frank Gunn/The Canadian Press)

For Friesen, it’s not yet worth adding EV chargers since the demand isn’t there, but she says she’ll continue to consider whether to allocate space as the market will evolve in the coming years.

“When I renovate a site, it’s definitely something that I kind of have a cataloged area for. »

With that in mind, she says she’s optimistic the family business will flourish if and when her teenage children take it over in the future.

“I would like to say that one day Gales will be run by a fourth generation, but that’s up to them,” Friesen said. “But I’m definitely building this business with the best of intentions to get them off to a good start. »

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