By Sara Counihan
ALEXANDRIA, Va.—There are a lot of optimistic projections about how fast electric vehicles will become a significant part of our transportation future. However, none of them take into account the significant roadblocks inhibiting the installation of chargers, according to this week’s NACS Convenience Matters podcast episode.
Vehicle manufacturers are moving their production lines to electric vehicles, and the Biden Administration wants half of new vehicle sales be electrical vehicles by 2030, but there are barriers that are holding consumers back from purchasing electric vehicles. Cost is big factor, but range anxiety is also a trepidation many have in owning an EV. Building out an EV charging network is going to be important to the adoption of EVs, and according to Jay Smith, executive director of the Charge Ahead Partnership, the fastest, most efficient way to build a network is to utilize fuel retailers who already have the real estate in the right locations.
“They offer the amenities that drivers have come to expect, and they have the infrastructure to provide that service. They’re used to serving drivers, and they want to continue to serve drivers in the future,” he said.
However, there are barriers preventing convenience-store retailers from getting into the EV charging business. There are two reasons why, according to Doug Kantor, NACS general counsel.
The first is that convenience retailers are hit with demand charges from electric companies because they are considered commercial users of electricity when a customer uses their EV charger to juice their battery. A demand charge is not just based on how much electricity convenience retailers use, but the highest consumption they have over a short period of time.
“When you talk about electric vehicle chargers, they demand a lot of electricity really fast. So it puts retailers that install these at a terrible disadvantage in such a way that they can’t possibly charge consumers the amount they are paying based on those demand charges,” said Kantor.
The second reason is that many electrical utilities have received approval to raise consumers’ electricity bills in order to pay for not only their own installation of chargers, but the operation of those chargers.
“That’s subsidized competition, which appears to make the cost of electricity much lower than it really is. It undercuts the rest of the private market and makes it very difficult to make money on it,” said Kantor, who also noted that electric utilities also don’t have to charge themselves with a demand charge.
“These things disadvantage local retailers [and] makes it very difficult to invest, and unless those two things are dealt with, it will stunt the growth of investment over time,” he said.
Smith said that many people like to look at these issues as retailers versus utilities, but it is going to have to be a partnership.
“There is a role for utilities to play. Our grid needs to have more electricity. […] And the power companies are going to make a lot more money when they sell more electricity. And the retailers who have been serving drivers who know how to do that, will be able to then take that electricity and provide it that last link into the electric vehicle,” said Smith.
Don’t miss this week’s NACS Convenience Matters podcast “Is an Electric Vehicle Future Possible?” to learn what is happening on Capitol Hill to advocate about the issue and if demand charges could become the new swipe fee for convenience store retailers.