Marketers Not Getting a Charge Out of Electric Vehicles

While technology, efficiency grow, charging stations not on SIGMA leaders' radar screens

Greg Lindenberg, Editor, CSP

electric-vehicle (EV) charging station

BOSTON -- Notwithstanding the obvious challenge electric-vehicle (EV) charging poses to gasoline marketers, attendees of SIGMA's 2015 Annual Meeting in general aren’t in any rush to install the chargers on their convenience-store properties.

"I would never give up a parking space in a c-store to plug in somebody's [electric] car," said longtime marketer Jack Pester, reflecting the sentiments of the audience.

That was just one key conversation at the Society of Gasoline Marketers of America event, where topics ranged from oil prices and interest rates to renewable fuels and menu labeling.

The event brought several hundred fuel marketers and suppliers, gasoline and convenience store retailers and other industry executives to Boston for a download of industry statistics, intelligence, prognostication, economic and legislative updates and planning.

More People, More Purchasing Power

As part of the second-annual Thought Leaders' Forum, Exxon Mobil Corp.'s Paul Tanaka presented The Outlook for Energy: A View to 2040, which looks at the energy sectors in 100 countries.

He said that demand for heavy-duty fuel will grow faster than demand for light-duty fuel.

Also among the findings: The world population will grow from about seven billion today to about nine billion by 2040.

"Standard of living will improve, and purchasing power, and you're going to see a large movement of people into the middle class. … They will have the ability to purchase, they will have disposable income," Tanaka said. They will buy automobiles and appliances. "All of that is going to take more energy. We see about a 35% increase in energy demand" by 2040.

But gains in energy efficiency in developed nations will offset the demand, some of which are already evident through technology, including vehicle fuel efficiency and hybrids, and through fuel-efficiency policy and standards.

"Technology is a very critical piece," Eric Slifka, president and CEO of Global Partners LP, Waltham, Mass., told Tom Kloza, cofounder of the Gaithersburg, Md.-based Oil Price Information Service (OPIS), who moderated the forum. "One thing that has caught a lot of people by surprise is the amount of technological innovation taking place all the way from the autos back up to energy production, and that's going to continue to change and get better. It's going to keep a lid on prices."

One area of energy technology that drew some degree of caution, however, was EV adoption. No one on the panel is seeing mass adoption; therefore, they have little interest in seeing charging stations added to gas stations and convenience stores.

The space is too valuable and is at a premium in most retailers' lots, Pester, formerly the chairman of Denver-based Pester Marketing Co., said, which drew some "amens" from the audience.

And Bob Espey, president and CEO of Parkland Fuel Corp., Red Deer, Alberta, said, "Charging stations are not on Parkland's radar screen. Mass adoption would fundamentally change the industry."

"People won’t come to convenience stores to recharge their vehicles," he said. They will "just do it at home."

'Spoiled Brats'

Continuing the discussion of how technology and changes in population are affecting the convenience store business, the panelists turned to the topic of millennials, whom Kloza playfully called "spoiled brats."

"We used to be crazy about cars; today, they are crazy about their cell phones," he said.

They agreed that social media was a great tool to promote loyalty programs. "If you are trying to attract that younger consumer, you have to find a way to provide value," said Slifka. “You have to provide convenience in some form."

Whether to offer branded or unbranded fuel can also be a part of this equation, they said. But either way, "the great brands of today are not the great brands of yesterday," said Pester, referring to Major Oil brands. "QuikTrip, Kwik Trip and Sheetz, for example, are making brands of themselves today."

On a side note, Pester said the sale of his company to Miami-based World Fuel Services, was bittersweet.

"I will always have regrets," he told Kloza, mainly no longer participating in "being able to address change."

But he was pleased with the sale. "I'm a happy boy," he said.