When Is a Gas Station Not a Gas Station? When All the Cars Are EVs

More than 181 million Covid-19 vaccinations have been administered worldwide. That doesn’t yet mean we’re at the end of the pandemic, but we may well be at the beginning of the end. If so, the world is about to get a lot bigger again.

As we all get moving again, a lot more of that mobility is going to be powered by electricity. The latest case in point: Ford, one of the foundational companies of the American auto business, just Wednesday set an all-electric target for 2030 (in Europe, at least).

I’ve been musing lately on what a much more electrified U.S. passenger vehicle landscape looks like—starting not with the vehicles themselves, but with the gas stations that serve them.

There are more than 106,000 gasoline stations in the U.S.—fewer than in 1990, more than in the years after the global financial crisis, and about the same as in 2005.

When Is a Gas Station Not a Gas Station? When All the Cars Are EVs

The employment pattern tracks fairly closely to the number of stations, at least through the mid-2010s. Total employment fell from the late 1990s to 2010 and rose again after the worst of the global financial crisis, just as the number of stations increased. The number of employees per gas station hit its all-time high in 2019, with exactly nine employees per station. Total employment in gas stations in early 2020 was just slightly lower than its late-90s peak…and then came Covid-19. Employment plunged, but it recovered quickly even with the pandemic still underway.

When Is a Gas Station Not a Gas Station? When All the Cars Are EVs

What happens to gas station employment when the car fleet is substantially or majority electric? For the answer to that, let’s look to Norway (as Will Ferrell did in my favorite Super Bowl ad).

Passenger vehicle fuel sales in Norway have peaked. Gasoline sales have been in steady decline for a decade, while combined sales of diesel and gasoline peaked in 2017. With the electrification of the vehicle fleet well underway there, it seems unlikely that this figure will ever recover. The number of Norwegian gas stations, likewise, peaked years ago.

When Is a Gas Station Not a Gas Station? When All the Cars Are EVs

Every new EV in Norway erodes the gas station’s fuel use case. Does it also erode the other use cases too? On a value basis, food and grocery sales at Norwegian gas stations peaked before the global financial crisis, declined, and rose again before beginning to fall in 2018.

When Is a Gas Station Not a Gas Station? When All the Cars Are EVs

I wouldn’t say this is definitive evidence that the growing EV fleet is denting the non-fuel business of Norwegian gas stations. Indeed, a Norwegian colleague reminded me that gas stations are often the only things open there at night. The same goes for the U.S., where more than 95% of current gas station employees do either food service or retail jobs.

We may not need as many gas stations in a decade as we do now, but which ones will close? I don’t think it will be the small urban stations with few amenities; those exist thanks to a captive market of city folks with no other fueling options. I doubt too that it will be the massive stations on highway off-ramps either; those have a similarly captive market of long-haul drivers, and could also be adapted to electric vehicles. I imagine it will be the suburban locations serving populations with ample ability to charge at home that will be the first to go.

And what will happen to them once they do? To answer that, let’s shift our attention to Canada, where developers wanting to convert old gas stations often pay more for environmental cleanup than for the land itself.

It might be prohibitively expensive to convert a corner station into mixed-use retailers, restaurants, or schools. But there are ways to limit that cost, in particular by not breaking ground and therefore not disturbing the soil. It might not be so expensive to build a pre-fabricated micro-fulfillment center on site, and thereby help meet the just-in-time needs of a population increasingly dependent upon deliveries.

Those stations could still be a stop on the way home, with parking available, or even a drive-through food window. Well-located real estate on suburban thoroughfares will surely retain value, whether the cars passing by burn gasoline or store electrons.

Nathaniel Bullard is a BloombergNEF analyst who writes the Sparklines newsletter about the global transition to renewable energy.

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