FRAMINGHAM, Mass. -- There are now 250 million vehicles, excluding motorcycles, on the road in the United States. In 10 years, industry projections have the fleet growing to 236 million vehicles, driven by population growth and income, despite the headwind of declining two- and three-car families.
The composition of this 236-million-strong fleet, based on current trends and prices, will be:
What will the mix of fueling facilities—and fuel profits—look like to serve this future vehicle fleet? Here are my projections ...
The future vehicle fleet will have specific energy needs. They include:
The charging time for an EV is four to 10 hours, depending on the vehicle battery type, its level of charge and whether the charging unit is a fast, Level 3 charger or slower Level 2 or 1 drip chargers.
To serve 6.6 million EVs, it is estimated by The Edison Electric Institute (EEI) and the Institute for Electric Innovation (IEI) that we will need 5 million charging ports, at home and places such as restaurants, stadiums, malls, movie theaters, universities and parking facilities. But, a fuel marketer in concert with a public utility can install the charging station, preload the card with its brand at its fueling site and enjoy a revenue stream.
So where will we be in 10 years? The petroleum fueling facility survives. Ten percent of them add natural-gas fueling islands and on-site compressors. Through smart-card technology, they can participate in the 26 billion kWh of electricity power stream.
This makes retailers’ total fuel gross margins as follows:
I haven't even discussed the potential profits from hydrogen, biogas or Renewable Identification Numbers (RINs). But my point is this: The industry is not going away; it is in a prime position to seize the opportunity presented by technology, fuel diversity, environmental concerns and brand recognition. Your retail brand’s gross margin on fueling—not major oil’s—will increase, not decrease.
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