Over 97 percent of American convenience stores that sell gasoline are owned or operated by independent operators. These businesses heavily depend on in-store sales to stay afloat. Despite numerous challenges, they have unique opportunities to innovate and thrive in an evolving energy landscape.
For retailers, the current business model of gasoline sales offers razor-thin profit margins. The net profit per gallon, after accounting for costs such as labor, utilities, insurance, and credit card transaction fees, hovers around $ 0.03-$ 0.07. This results in a net profit margin of less than two percent, making it a challenging landscape for store owners. The oil market’s volatility further complicates the situation, making it difficult for store owners to recover costs during low-margin periods, and tightening their already slim profits. Furthermore, electrifying gas-convenience stores will become not only a necessity to meet global climate goals but also a financial imperative. According to research from the Boston Consulting Group, fuel retail networks are well on track to unprofitability by 2035, even in scenarios in which new mobility models are less disruptive and fossil fuel sales do not decline precipitously.
Best Time for Gas Stations to Electrify
However, the growth of electric vehicles (EVs) adoption presents a meaningful opportunity for these gas station owners to innovate. As EV adoption continues to grow, EV stakeholders need to expand existing convenient charging options, especially for drivers who travel long-haul distances. According to BloombergNEF’s latest Electric Vehicle Outlook report, EVs of all types are already displacing 1.7 million barrels per day of oil usage, equivalent to about 3% of total road fuel demand. This trend underscores the transformative potential of EVs in the energy market. Aided by the new U.S. federal government investment into highway charging stations at gas stations and rest stops—over 50% of federal funding for highway EV chargers will be earmarked for gas stations and truck stops— it has never been a better time for gas stations to electrify.
Yet, transitioning to EV infrastructure comes with its own set of challenges for retailers. High electricity costs are a significant concern. The amount of energy utility companies generate is constrained by generation and transmission capabilities, and ultimately expanding this infrastructure is costly. Grid stakeholders have long stressed that this infrastructure during non-peak time must be better utilized to avoid grid instability. Ultimately, energy pricing has served as an important cost element and a means of controlling grid load. As EV adoption continues, smart charging solutions will be critical to helping drivers and hosts choose charging times that optimize costs and minimize grid impact. With North American EV charging operators on pace to spend around $6.1 billion on charging infrastructure this year— almost twice that of 2023—electrifying gas-convenience stores will be key to ensuring EV networks in the United States will keep pace with demand.
EV Charging Management Platform for Gas Stations
The Driivz platform offers a robust solution for managing EV charging networks for the smart grids of the future. While early market entrants struggle to keep pace with rapid growth and changes, Driivz is a proven platform that enables larger companies—especially existing utilities and oil and gas firms—to deploy a unified solution to effectively manage EV charging networks at scale. Driivz has facilitated easy migration, integration, and connectivity to legacy systems; supported diverse business models; and ensured regulatory compliance across markets in Europe and East Asia to the United States.
The future of gas stations is not just about adapting to the changing energy landscape, but also about seizing the opportunities it presents. By tapping into the EV market and adopting smart EV charging management solutions like Driivz, gas station owners cannot only navigate current challenges but also secure long-term success. This shift towards sustainability opens up new avenues for growth and profitability, offering a promising future for the industry.
