Fuels

Opinion: Why You Should Hedge Your Bets on Electric Vehicles

Plus, what drones can teach c-stores about the potential of disruptive technology

CAPE CORAL, Fla. -- Are electric vehicles (EV) a dream technology?

At the recent Fuels Institute symposium, “State and Future of Fuels and Vehicles,” I asked its executive director, John Eichberger, about why there are not more EVs. His response: “The reality is that we are spending a disproportional amount of time looking at technologies that will, in a dream scenario, account for 10% of our transportation needs in the next 20 years.”

He added that even the Department of Energy, which is promoting EV market development, expects electricity will provide only 1.5% of transportation energy supplied in 2040.

This, of course, is a very sensible and reasonable answer. However, those of us who are at times called futurists (and at other times wild-eyed dreamers) might be sensing disruptive technologies in the wings that are a portent of an alternative future that might be hurtling toward us a bit faster than conventional wisdom would have us believe.

Consider drone delivery. A couple of years ago, Amazon announced it would soon deliver packages by drone. At the time, CEO Jeff Bezos told 60 Minutes, “I know this looks like science fiction. It’s not.”

Why drones? The transportation infrastructure in the United States is failing with age. Also, we will need increased capacity to avoid massive congestion by the time we enter the 2040s. For a company such as Amazon, whose Amazon Prime subscriptions become ever more popular, that spells disaster, as all of their shipping depends on that infrastructure. By focusing on drone delivery as an alternative shipping method, Amazon’s unit cost of delivery would decrease an estimated 50% in 10 years, according to analysts at Deutsche Bank.

When you combine Amazon’s drone initiative with the interest in autonomous EVs from companies no less futuristic then Tesla Motors and Apple, you begin to take notice. Then add in the increasing amounts of tax dollars necessary to bring the current transportation infrastructure up to requirements. Finally, consider climate change, which, other than a certain presidential candidate, most people now accept as fact.

With these factors in mind, drones could be part of a possible future for convenience stores that may no longer “fuel” inside sales by the sale of liquid fuels. In fact, I can foresee a future with autonomous vehicles on the road as well as a number of drones in the sky.

Now, a few of my colleagues suggested that I might have been spending a little too much time in Colorado, possibly investigating its new cash crop. You can sense my elation then after seeing the recent CSP Daily News story, “7-Eleven Seeks to 'Redefine Convenience' With Drones.” 7-Eleven and Flirtey, an independent drone delivery service, completed the first fully autonomous drone delivery to a customer’s residence, delivering such essentials as Slurpees, a chicken sandwich, doughnuts, hot coffee and candy, all in a matter of minutes.

7-Eleven stated, “Drone delivery is the ultimate convenience for our customers, and these efforts create enormous opportunities to redefine convenience.”

On Aug. 9, the Federal Aviation Authority (FAA) issued finalized regulations concerning operational drones, allowing retailers to start using drone delivery systems, if the cargo weighs less than a total of 55 pounds, the flight is conducted from the remote pilot’s visual line of sight, the drones fly a maximum speed of 100 miles per hour, and gain a maximum of 400 feet. Now, naysayers will point out that the line-of-sight requirement virtually negates a convenience store’s retail application. However, bear in mind that Google’s own commercial drone delivery initiative, Project Wing, is partnering with the FAA to test drone delivery testing and advance the development of safety regulations. These tests will develop abilities surpassing the current line of sight capabilities.

I believe Eichberger is correct: Liquid fuels show every indication of dominating the transportation fuel landscape for many years to come. However, I have to believe 7-Eleven is performing research and development in anticipation of potential paradigm shifts, as are companies such as Sheetz and Wawa, who are quietly testing nonfuel concepts.

Like them, I am hedging my bets and making sure I can fall back on my other convenience-store skillsets if the unlikely future state becomes a rapid reality. I will be visiting Colorado next year for a conference; I’m sure it will keep my credentials in question.


Norman Turiano is principal of Turiano Strategic Consulting. Reach him atTSC.USA@comcast.net.

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