By Magnar Møkkelgård
To learn more about electric vehicles and their impact on the convenience industry, look to Norway.
EVs have become a focus area for European car manufacturers, and Norway remains a pioneer country with regard to EV adoption. This past fall, 60% of all cars sold in Norway were EVs, and another 20% were hybrids. Even though penetration of EVs among the total number of cars in Norway has not reached 20% (yet), things are slowly starting to change.
One may say that Norway is in a special situation, given all the incentives the government has provided to boost sales of EVs. It’s also true that since almost all electricity in Norway comes from hydropower plants, the environmental advantages of EVs are also bigger. On the other hand, the EU has placed new limits on the car manufacturing industry with requirements for the average emissions of new cars sold, which really forces the industry to prioritize EVs.
So, what does this mean for the gas station business in Norway? Even though the COVID-19 epidemic has slowed down the decline in fuel sales as people used their cars more during the summer season than previously, some trends and developments can give retailers in other countries valuable clues about what may happen in the future.
Here are some examples:
- As fuel sales have dropped by almost 20% in some areas, the importance of the store has increased; in particular, the importance of having an attractive food offer and seating.
- Since 70% of all vehicle charging takes place at home and 20% at work or other “non-convenience” locations, the convenience industry cannot just replace fuel sales with charging stations. Demand is not there.
- Even though fast chargers and flash chargers have cut down on the time it takes to charge, a charging station still “processes” fewer cars than a fuel pump. Traffic peaks like public holidays become an additional challenge when it comes to charging capacity.
- Even if it takes 15-25 minutes to charge a car, it is not a given that the customer will go inside the store and buy something. For people who work from their cars, the charging time is a welcome opportunity to check emails on the smartphone or make some necessary calls. People do not necessarily eat or drink because they charge, but they may certainly charge if they stop for a meal.
- EV owners are used to planning when and where to charge, just as we learned to plan the charging of our mobile phones many years ago.
- Circle K has tested out motorway locations with exceptional charging facilities and a good food offer. On the other hand, smaller stations within the city limits will certainly not be the best locations in the future.
- Loyalty programs also takes on new importance as EVs increase their impact on the business.