I Have Bad News for Gas Stations
The family-owned ARCO service station in Van Nuys, right in the heart of Los Angeles’ San Fernando Valley, was an institution in Hank Walker’s life. “There has been a gas station at that location for more than 100 years, first built when my grandfather had a vegetable farm there,” he told me recently. A few years ago, as the number of electric vehicles in L.A. began to skyrocket, Walker and the siblings and cousins he owned the station with asked themselves: Should they go electric, too? But when they did the math on converting their gas station into an EV charging hub, it didn’t pencil out. Not because the tech would be too costly, or the installation too complicated. But because of time.
Gas stations make the vast majority of their profits not from gasoline, but from the energy drinks, beef jerky, and lottery tickets sold in their convenience stores. But because EV charging takes longer than gas pumping, fewer cars and fewer people would come through a charging depot than a gas station. Walker calculated that to keep the place afloat, drivers who spend half an hour plugged in would need to spend 70 percent more than the gas-guzzler who’s gone within five minutes.
“We could not come up with a solution,” he told me. “So we sold the gas station.”
Walker is far from the only service station owner to see the writing on the wall. It seems only natural that as the world moves to electric vehicles, gas station proprietors would pivot from pump to plug, especially as President Biden’s Inflation Reduction Act provides billions of dollars to juice the construction of EV chargers around the nation. But gas station owners have other problems besides selling enough Twizzlers. EV charging is a different world compared to pumping gas, and the winners and losers of the charging economy may look little like what came before. As gas stations look to become charging depots, they are competing with electrical utilities, third-party charging companies like Electrify America and EVgo that put their chargers in places like parking lots, and giant automakers building their own networks—not to mention all the EV drivers charging in their own garages. Then there is Elon Musk, who has suddenly entrenched himself not only as America’s biggest EV mogul but also, perhaps, as its next charging baron.
Earlier this year, while Musk captured the world’s attention in the aftermath of his contentious Twitter takeover, Tesla Motors quietly pulled a fast one.
Tesla had maintained a closed standard—only Musk’s cars used his electric charging plug and his vast Supercharger network. It is an impressively seamless experience: Plug in a Tesla and the system recognizes your car; when you’re done, it bills your card on file for the kilowatt-hours. Drivers of a Chevy Bolt, Nissan Leaf, Ford Mustang Mach-E, or any other EV rely on a messier system with a different standard of plug, frustrating interfaces, and frequently busted chargers. This was the deciding difference when I chose my Model 3 over other EVs. Thanks to Tesla’s network of mostly reliable chargers, I could confidently drive around California with an electric as my only car.
All of a sudden, Tesla has done a switcheroo. Last fall, Musk opened his standard and changed its name to the North American Charging Standard (NACS)—as if, by sheer will, he could convince the auto industry to adopt his as the one plug to rule them all. (Not coincidentally, opening the standard allowed stations with Tesla plugs to receive federal funding for EV charging.) It worked. Lured in part by the promise that its customers could plug into Tesla’s network, Ford in the spring signed on to start building the NACS into its EVs beginning in 2025. So did Volvo, Rivian, GM, Polestar, Nissan, Mercedes-Benz, Honda, and others. Current EV owners will have to get used to a life full of adapter dongles and home chargers that can hop between plug standards.
These developments are unwelcome news for people like me: Tesla owners who’ve had Superchargers to ourselves. It’s good news for the driving public, who’ll enjoy much more freedom to confidently roam the country if they can use Musk’s chargers along with the rest. It’s probably the best deal for Tesla itself: The company is trading away a key selling point, the exclusive use of its network. What Musk gains in return is not only access to federal dollars, but an extra stream of money that will start pouring in as all kinds of EVs use his chargers. Even EV drivers who loathe the man—or those who would never buy a Tesla because of his politics or his changes at Twitter—will eventually buy electricity from him.
Even with Elon’s gambit, the charging wars are wide open, thanks in large part to a big pool of Uncle Sam’s money. Everybody wants a piece of the billions of dollars that the Department of Transportation is slated to spend through the IRA’s National Electric Vehicle Infrastructure (or NEVI) program over the next several years, with the goal to build “charging corridors” across America lined with EV stalls.
In July, a group of car companies including BMW, GM, Honda, Hyundai, Kia, Mercedes-Benz, and Stellantis (which owns Chrysler, Dodge, and Jeep) pledged to spend a billion dollars to build 30,000 more fast-charging stations around the country. These would be equipped with both the old plug and Tesla’s. Although many of those automakers are already moving to Tesla’s standard, their big build-out is a clear signal they don’t want to become reliant upon Elon Musk.
The federal money could also be a boon for the gas stations that hope to electrify on their own. Take the Love’s chain of gas stations and truck stops, which just scored almost $5 million to add EV chargers at some of its stations in Colorado and Pennsylvania. Ryan Erickson, vice president of the Trillium Energy Solutions firm that installs EV chargers for Love’s, told me the company’s service stations are in a particularly good position to benefit from the big federal investment. The Department of Transportation wants its money to build chargers within a mile of the main interstate or highway, which means all those Love’s stations found right at interstate offramps are great candidates.
“Our average customer may not be the person who’s just going 5 or 10 miles to work and back,” Erickson says. “It’s typically when you’re going somewhere else—going to grandma’s house.”
The fact that truck stops are open 24/7 means there’s an employee around in case the credit card swiper on the charger won’t cooperate, he says. Plus, truck stops are big. A Love’s next to the interstate can add four or more EV stalls without sacrificing gas pumps and worrying about the accompanying dip in Doritos sales. “The amount of space we have up there is normally much larger than you would see in your normal kind of city gas station,” Erickson says. As the popularity of EVs grows, those big stations may be able to accommodate many more than the four stalls they’re building at most of these new stations.
The gas station around the corner, like the one Walker’s family used to own, is in a trickier spot. For now, he says, the federal program to encourage EV chargers is targeted at large nationwide networks—which means it’s also targeted at highway commuters and Americans on road trips. ”The bureaucracy is way too much for a small service station to take it on,” Walker said. Plus, the charging economy within a big city is a different beast. EV owners can do most of their charging in their driveway, or in the parking lot at work, which cuts the need for the fuel station on the corner that we’re used to. A mom-and-pop shop might not have the real estate to add many EV chargers without sacrificing lucrative petroleum pumps. It’s no surprise, Walker says, that the gas stations welcoming EV charging are those with room to spare.
“They have the resources and the market power to do this,” he says. “But we are talking about service stations with 72 gas pumps and a food store as big as a small Walmart.”
The competition is rough, too, and not just from the automakers. CNN reports that utilities may charge gas stations onerous “demand fees” because EV chargers use so much electricity at once, which could add up to as much as a quarter-million dollars a year. Those same utilities are working out subscription deals for EV owners who charge at home, and vying to open their own charging stations—they control the supply of electricity, after all. In Minnesota, the battle between gas stations and public utilities over control of EV chargers went to court. It is a prelude to a contentious national conversation about whether recharging our cars should be the domain of the public sphere or the private sector.
An EV charging depot just doesn’t have to look like a gas station, either. (While it’s nice to have a human around in case the technology breaks, that isn’t necessary.) In EV-heavy California, the Tesla Superchargers in cities and suburbs tend to be in shadowy parts of parking garages or at the far corners of outlet malls where lots and lots of parking spaces can be found. Weirdly, the surprise winners of the charging race might turn out to be brick-and-mortar stores and restaurants—places for people to kill 20 minutes or more while the electrons flow.
When I picked up my Tesla in 2019, the cute little demo about how to be a savvy owner included the mantra ABC: Always be charging. Plug in at home, at work, at the Supercharger. Do whatever it takes to keep the battery in its happy zone, between 20 and 80 percent, and keep yourself out of trouble.
This idea is key to understanding what an entire country driving EVs looks like. It is not a one-note song where everyone pulls into the closest gas station when they’re close to E. People will charge in their garages overnight to awaken with a full battery. They’ll charge at work so their car uses the clean solar energy of the midday sun. Drivers who can’t do either will rely on public fast chargers just like they did with gas stations, but they’ll also plug in at the grocery store and the destination charger in the hotel parking lot when they stay at the Courtyard by Marriott. They’ll stop at fast chargers next to gas stations by the interstate, but also at the charging depot by the In-N-Out Burger or the casino on the way to Coachella and get a steak dinner with a side of electricity on the journey from Los Angeles to San Francisco. More stores, rest stops, and restaurants might offer free or reduced charging as a lure to bring in customers who’ll have half an hour to kill.
The Biden administration hopes to have EVs, plug-in hybrids, and hydrogen fuel-cell cars make up half of American auto sales by 2030. GM aims to sell mostly EVs by 2035, the same year California plans to stop selling gas-powered cars entirely. This electrified America needs plugs and lots of them: 2.13 million Level 2 chargers (the kind that recharge your battery overnight) and 172,000 Level 3 chargers (the kind that refill your battery in less than an hour) by 2030, according to one industry projection. The 2030s may look like a divided driving America in which the demand for gas slowly dwindles while gas stations have to figure out their place in the future.
Who’ll win the charging wars? “We don’t have a kind of pat answer to that question,” Erickson, the Trillium VP, says. “It’s a good question. I don’t think we’ve been asked it before.”
