Are you ready for the EV-olution?
Let’s get right to the point.
Regardless of what some may be saying in the media, electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) are here to stay; and will only grow in numbers.
To give some perspective: according to Statistics Canada, in the first half of 2022, electric vehicle sales in Canada grew by one-third, and in 2022, achieved a six-month record, with nearly 56,000 units sold, a 35% increase from 2021. In the third quarter of 2022, all provinces and territories (except Prince Edward Island) saw double-digit increases in zero-emission vehicle (ZEV) registration. Also, 2023 was notable in that the Canadian ZEV volume was some 13.1% higher than in 2022 for a total of 184,600 vehicles registered. Reflecting on the latest data covering the first quarter of 2024, 46,744 new ZEVs (light and medium duty only) were registered across Canada. From that total number, 34,105 were BEVs and 12,639 were PHEVs. This represents 11.2% of the market share. Hybrid electric vehicle (HEV) registration hit 34,930 in the first quarter of 2024.
The adoption of fully electric and PHEVs and HEV’s will only continue to increase. It is important to remember that the Canadian government has made very clear it is committed to achieve 100% zero-emission vehicle sales by 2035 for all new light -duty vehicles, including interim targets of at least 20% by 2026 and at least 60% by 2030, as was announced in Canada's 2030 Emissions Reduction Plan. These targets were then incorporated into Canada’s Electric Vehicle Availability Standard as finalized in December 2023.
Lack of charging infrastructure still a concern
If there is one barrier that continues to cause concern for potential buyers of electric and hybrid electric vehicles, it is where to charge them when not at home. As J.D. Power noted in its second annual J.D. Power Canada Electric Vehicle Consideration (EVC) Study, “among consumers in the Canadian market who say they will not consider an EV for their next vehicle purchase, limited driving distance per charge is the most frequently cited obstacle to consideration (63%). It is followed by purchase price (59%) and lack of charging station availability (55%).”
This worry over the lack of places to charge was confirmed in the 2024 Mobility Trend Report published by Volvo Canada: Amongst the 1,000 Canadians surveyed online between March 26-28 2024, “nearly four in five (78%) agree there currently isn’t enough publicly available charging infrastructure to make electric vehicles a good option.”
C-stores, gas station step up to fill the charging gap
This presents an opportunity for Canadian convenience stores and gas stations—and those operating both in the same location—to ease that charging anxiety.
“According to NRCAN, as of July 11 there were 11,628 station locations with 29,033 charging ports in Canada,” says Jean-Christophe La Forge, marketing manager with Flo, a provider of electric vehicle charging solutions. “Late last year, NRCAN estimated that depending on the availability of home charging, Canada will need between 442,000 and 469,000 public charging ports by 2035.”
Already, Flo has installed some 2,700 public stations with more than 7,300 public charging ports in Canada, located in malls, parking lots, universities, convenience stores and restaurants. More will certainly be needed in the coming years to meet the growing number of electric and hybrid electric vehicles that will come onto Canadian roads, and to overcome that charging point anxiety that Canadian continue to have.
“At a national level, we are continuing to see growth in the charging market,” says Mike Mackay, EV charging specialist and senior technical support with National Energy Equipment. “The density and locations vary by region, but we are starting to see more retailers get into EV charging in various capacities. The most visible are the national companies like Suncor, Parkland, and Circle-K continuing to invest in their charging infrastructure. Parallel to this stream we are seeing some sectors electrifying their fleets and installing behind-the-fence infrastructure to support those purchases.”
READ: Why convenience stores need to start investing in EV charging infrastructure
Navigating obstacles
The challenge is getting those chargers into place.
Chad Bass, director of product management for electric vehicle charging for Dover Fueling Solutions, a part of Dover and a provider of customer-focused technologies, services and solutions in the fuel and convenience retail industries in North America, says the installation of charging infrastructure can be difficult or easy depending on the location. A new location has fewer issues as the fuel and convenience store operator likely is “working directly with construction companies, designers, technology providers etc. to put the needed infrastructure in,” he continues. “And what I’ve been telling those store owners and corporations is that even if you don’t plan on installing chargers immediately, at least build in the [electrical conduits] that you will need so when it comes time to put chargers in, it’s easy as pulling copper through the conduits and you don’t have to rip up your parking lot, sidewalks, drives and all that.”
He says with an existing site, there are challenges, as one does not have a clean slate to work with. In turn, operators will need to first work with local authorities to make sure all the necessary permits and building regulations are followed and will likely need to work with the municipality’s energy provider to ensure that the right electrical infrastructure is put in place to support the chargers needed.
“A common barrier for c-stores and gas stations looking to install EV charging infrastructure is space,” adds Flo’s La Forge. “First, fuel retailers need to have parking spots available and allocate them to EV charging, while keeping enough space for trucks carrying gasoline to maneuver safely. Second, they need to take into consideration where the tanks holding the fuel are located and allow for sufficient clearance with the EV chargers.
“When selecting hardware, fuel retailers can choose an all-in-one DC fast charger that takes up less space than a dispenser-type charger that requires a power cabinet and involves more trenching. Another challenge fuel retailers will face when installing EV chargers is access to power. Direct-current (DC) fast charging requires access to 480-volt three-phase power. We always recommend reaching out to your local utility early in the process.”
The two biggest hurdles are power availability and cost, concurs Mackay. “With this being fairly new technology, the economies of scale haven’t really taken hold yet, but we are starting to see reduction in equipment cost. The technology and companies providing it are evolving rapidly and these advancements are enabling increases in capability with decreasing cost. Lock step with these advancements, auto manufacturers are increasing the capabilities of the vehicles. As these advancements progress the ideal charging solution also progresses. Two-three years ago, a 50kw charger would meet the capabilities of virtually all vehicles on the road. Today there are multiple vehicles charging with peak power between 240kw—360kw. Additionally, for locations that serve medium or heavy duty vehicles, new standards are soon being launched that will see charging speeds an order of magnitude higher.”
Will the investment pay off?
Some might ask will making such an investment in electric vehicle chargers be worth the cost. Let’s be honest, while the cost of chargers is falling, to put in a sufficient number and the work associated with doing so might seem too much for the number of electric vehicles on the road right now and what is expected in the next few years.
The reality is that having EV chargers onsite has the potential to bring in significant revenues and business. Why? Charging takes time and the time spent charging that vehicle is a prime opportunity to bring those vehicle owners into the convenience store and drive sales.
In Charging the Future: The Role of Retail in Our EV Transition, the report’s author notes:
“Retailers have strong economic incentives to install EV chargers. A policy brief by Atlas Public Policy and the Retail Industry Leaders Association found that hosting an EV charging station ‘offers a range of potential benefits for retailers, including direct revenue from charging station use, increased sales, and improved corporate branding.’”
An analyst at energy consulting firm Wood Mackenzie more recently gushed that, “there is so much opportunity in the brick-and-mortar segment” because of its “synergies with EV charging.” Indeed, one charging network found that customer “dwell time” (the amount of time that a shopper spends in a store) increased by an average of 50 minutes, with an average spend of $1 per minute, following the installation of Level 2 EV charging equipment at a major retailer. A different network found that 89% of EV drivers make a retail purchase while charging.
EV chargers are a great fit for gas and convenience locations, emphasizes Mackay. “Gas stations already utilize the distribution of energy (gas and diesel) to draw customer traffic for their onsite convenience, car wash, and food offerings. EV charging does the same thing but has the added benefit of a little longer dwell time. Where a customer might be fuelling their vehicle for six minutes, an EV driver will typically be on site for 15-30 minutes with the highest speed chargers. This makes the additional onsite amenities more important and attractive to EV drivers. Additionally, you are retaining loyal customers who will typically have both ICE (internal combustion engine) and BEV (battery electric vehicle) or PHEV (plug-in, hybrid electric vehicle) vehicles in their family and attract different clientele.”
And according to a recent paper from Boston University and University of Wisconsin-Madison researchers, locating a Tesla Supercharger near a retailer increases monthly visits by 4% on average, and grows revenue by 5%.”
“I think it's important to note that when you have an EV driver at a location, the average charge time, what we're seeing is around 25 minutes,” says Bass. “So, you have a captive audience there for 25 minutes and being able to provide them with an experience, one that is going to benefit [the store] more. As opposed to somebody that's just fuelling up with gas or diesel, they're in and out in about five minutes. So, you very much have a captive audience for almost three to four times longer.”
“Strategically located with extended hours and a broad product offering, convenience stores equipped with Level 3 EV charging stations (also known as DC fast chargers) are positioned to attract a steady flow of traffic from drivers seeking to replenish their vehicle’s battery while refueling their bodies,” adds La Forge. “The relationship between EV charging and convenience stores expands beyond foot traffic, as studies have shown a revenue increase of 5% within the retail locations that install DC fast chargers. This indicates that EV drivers tend to spend more time and money at establishments with charging facilities.”
Mackay agrees. “With liquid fuels, the gas station is typically a local community service. Customers tend to be geographically nearby and may grab lotto or a pack of gum while fuelling up on the way home unless it is a highway location. EV drivers typically use public charging infrastructure when they are not near their home. Most EV drivers have charging capability at their home, so they are stopping at convenience charging locations like gas stations where they are more likely to also be interested in on-site restaurants, road trip snacks and beverages, washroom amenities, etc. Given the difference in use case, it’s likely that more EV charging customers will have ancillary purchases than liquid fuels customers.
“As we start to see most of the national companies getting into this segment, delaying too long could lead to a loss of loyal customers who transition to EV. Regardless of a customer's preferred retailer, once they move to EV, the priority becomes where are the most capable and reliable charging stations. Since there is not plentiful infrastructure in most of the country, brand loyalties are less relevant at this early stage and need to be re-established.”
Timing is everything, add Mackay. “From another perspective, this new industry means there are still many government incentives to help early movers get involved. These incentives won’t last forever but there is federal funding available right now and some provinces go above and beyond that funding, which makes the capital investment significantly more attractive.”
READ: Why convenience stores need to start investing in EV charging infrastructure
