The NACS Convenience Summit Europe, which ran June 1 to June 3, was a virtual event from Dublin, Ireland, that brought together a variety of experts to discuss industry issues ranging from future fuels to foodservice to employee training. One of the highest interest sessions was “The Future Vehicles and the Fuels That Will Power Them.”
NACS and Conexxus are looking at IT integration with the chargers to identify the customer and entice them into the store.
Panelists Martin Roemheld, head of e-mobility services at the Volkswagen Group, and István Kapitány, global executive vice president Shell Mobility, Shell Hungary, provided an automaker and global energy company perspective on the current state and future of electric vehicle charging and what that might mean for liquid fuel retailers. Henry Armour, NACS president and CEO, joined the panelists after their presentations for a question and answer session.
The convenience/fuel retailing model is based on filling customers’ needs, including fueling, in a timely manner. Charging solutions range from slow but inexpensive home systems to extremely fast (and expensive) fast-charging technology.
Roemheld noted that the first generation commercial-level 50 kW charging solutions can take up to an hour to charge a vehicle. The second generation 125 kW ID.3 charging solutions cut that time roughly in half. A step beyond that, bleeding edge charging solutions are available for premium vehicles, such as the Porsche Taycan at 270 kW charging with 350 kW charging already in the mix. These can recharge high-end batteries between 12 and 20 minutes, which he noted would be a perfect match for inside sales in convenience retail.
How does that translate to a current retail fueling site? Roemheld provided a comparison where a current liquid-fuel customer profile involves 12 minutes on site, including five minutes shopping inside the store. The EV profile, using the fastest charging available, resulted in 14 minutes of total site time but with 10 minutes inside the store. The extra store time is gained because the EV charging process can be unattended compared to minding the fill with gasoline or diesel.
“[This charging time] is when the customer can actually leave the vehicle and spend time in the shop, so there are a lot of opportunities for customer interaction for retail,” said Roemheld. “In the future, the customer will be charging 400 kilometers (249 miles) in those 10 minutes.”
Site of the Future
What was a perspective on an EV future from a senior executive at what has been a traditional oil company? Quite positive.
“They say by 2035, 80% of the motorists in the U.K. won’t need to go to a Shell service station,” said Kapitány. “And I am the guy who is responsible for 46,000 service stations around the world. So, that is a challenge, isn’t it? I think it’s a great opportunity.”
Kapitány noted that there are 10 million battery electric vehicles today, at least 150 million are expected by 2030 and 600 to 800 million by 2040. There are about 1.4 billion cars on the road today, according to WardsAuto, and the World Economic Forum expects there will be two billion ars on the road by 2040. The most growth will be largely in emerging markets such as China and India, resulting from an anticipated growth in their GDP. However, incremental growth or even declines can be expected in mature regions such as the West.
Kapitány believes there still will be internal combustion engines, but they will be far more effective and efficient than they are today. Still, Kapitány’s forecast shows EVs would likely be at least one-third of the worldwide fleet by 2040.
Shell plans on offering a mosaic of fuels to its customers—traditional, LNG, CNG, hydrogen—and with renewables in the mix. On the EV front, Shell currently has 75,000 charge points around the world and 200,000 that the company can connect to through partners. And that Shell footprint—and the charging environment in general—will be far broader than you see with liquid fuels today. “The customer’s greatest concern relative to EV charging, according to surveys, is range anxiety,” Kapitány said. “So, this is our job together as retailers and partners in the e-mobility sphere to make sure this infrastructure will be built. Shell is planning to have 500,000 charging points by 2025, which is only four years away. A significant part of that will be public charging, charging on our Shell service stations or at destination sites with significant power (150+ kW).”
Moving away from the current model where virtually all fueling is accomplished at dedicated consumer or commercial fueling sites to one where a car can be charged in the garage, shopping mall, public street or existing convenience store raises some concerns over market loss. Kapitány downplayed those fears.
“This is giving us an opportunity—it’s not making that pie smaller, it’s making the pie bigger,” Kapitány said. “The customers that are going to be driving EVs—many are driving fewer cars today. Many don’t drive now but will drive or will be driven in an automated vehicle. We will have an opportunity to serve a broader range of demand from our customers, and for that we need collaboration. Governments, lawmakers, OEMs, engine manufacturers, car manufacturers, retailers, mobility players and, of course, importantly we need society to go through this transition together.”
A highlight of Kapitány’s presentation was a station of the future concept. This provided a roving view of the artistically represented site, which was roughly the size and scope of a current interstate travel plaza. It featured roughly 24 car-capable charging positions, 12 conventional gasoline or diesel fueling positions, alternative locations for such commercial fuels as LNG, an interior that featured lounges, foodservice areas and other convenience-focused entertainment and retail options plus an outside playground.
The Finer Points
In addition to discussing some of the highway funding ramifications of EV charging versus the current fuel tax model, Armour finished out the Q&A session by addressing several issues directly related to the current convenience/fuel retailing infrastructure.
Armour asked how retailers can be sure that the customer will leave the vehicle to access the store instead of spending the extra time searching social media in the car.
Roemheld cited the desire for people on long trips to get out and stretch their legs, with charging offering a perfect opportunity for an enhanced break from the road. Kapitány elaborated that the EV charging process makes it easy to walk away from the car and into a retail merchandising environment because of charging’s unattended nature. Experience already shows an increased basket size from the EV customer, they said.
Armour added that NACS, through its technology standards group, Conexxus, is looking at IT integration with the chargers to identify the customer, plug the customer into the loyalty systems and send offers to entice the customer into the store.
Armour then asked Roemheld where should retailers place their chargers and how many are required?
Roemheld noted that the closer to the shop the better, and it makes a lot of sense to have a canopy to make the walk inside as painless as possible. As for the number of chargers, it makes sense to have enough to meet demand to avoid excessive wait times.
This generated a discussion where Kapitány stated that there could be an electricity charging model similar to today’s offer of regular midgrade and premium fuels, only based on charging time. Some of this would be cost driven—the faster the charger the more capital-expensive and higher the grid cost—but there would also be profitability options. Armour noted there are a range of conceptual and regulatory issues that need to be resolved before retailers can start charging for electricity on a similar model as liquid fuels today.
This is our job together as retailers and partners in the e-mobility sphere to make sure this infrastructure will be built.
Armour also asked about the barriers to rollout. There are numerous infrastructure details that need to be overcome, which prompted Kapitány to highlight the need once again for collaboration to speed the rollout of EV charging infrastructure. He outlined Shell’s diversification into a range of potential EV charging opportunities, such as the company’s recent acquisition of Ubitricity, which provides EV street charging through such infrastructure as streetlamps and bollards.
Similarly, Shell was in the news in 2019 for its acquisition of the German home charging (and more) startup Sonnen to be positioned as an energy provider at that level. “We are talking to retailers—we ourselves are retailers,” Kapitány said. “We are working with different supermarkets and hypermarket companies, parking garages and destination charging. How can we work together? In our industry we thought it is all about competition, but in fact you need to collaborate because if you do not it will be very difficult to build the network fast enough. We need to switch away from where we are direct competitors to where we are partners to build this ecosystem.”
Armour responded with the considerations required for the retailing sector. “When you shift away from a convenience retailing site, the indirect opportunities decline (inside sales) and the direct profitability has to increase,” he said.
NACS Convenience Summit Europe 2022
The NACS Convenience Summit Europe took place virtually June 1-3. Next year, the event takes place live in Berlin, Germany, from May 31 to June 2, 2022. Visit www.convenience.org/cse for more information.