Will electric vehicles kill off gas stations? Fuel companies prepare for an uncertain future - Action News
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Will electric vehicles kill off gas stations? Fuel companies prepare for an uncertain future

Experts warn that gas stations' days could be numbered as more drivers turn to electric vehicles ahead of a deadline for halting sales of new gas cars. But analysts say companies could boost their chances of survival by providing better snacks, automated checkouts and EV chargers.

Better snacks, automated checkouts, EV chargers could boost chances: analysts

Jessica Friesen is the third-generation owner and CEO of Gales Gas Bars, which has 14 gas stations across Ontario's Niagara Region. She says she's confident her family-owned company can diversify its business to survive as electric vehicles become more popular. (Submitted by Jessica Friesen)

Jessica Friesen's family has been pumping gas in Ontario's Niagara Regionfor more than five decades.But as electric vehicles increasingly take over Canada's roads, some experts warn that her industry'sdays are numbered.

Friesen, however, is unfazed. Since her grandfather opened the first Gales Gas Bar locationin 1967, the family business has grown and adapted over the decades, and it nowcomprises 14 gas stations, as well as convenience stores and fuel delivery trucks.

"I feel we've got a very good future ahead," Friesen, the company's third-generation owner and CEO,told CBC News.

"One of the reasons that we are still independently owned is because we have been able to diversify our business."

Industry-watchers say diversification will be the key to survival in the decades to come, with the federal government mandating that all new cars and light-duty trucks sold in the country be zero-emission vehicles (ZEVs) by 2035.

An electric vehicle is charged in Ottawa on April 14. There are more than 5,000 electric vehicle charging stations in Canada, and multiple companies are rolling out new networks with thousands more charging sites. (Francis Ferland/CBC)

Those vehicles include battery-electric (which requirecharging with electricity), hydrogen fuel cell (which run on hydrogen, currently available at only a limited number of gas stations in Canada)andplug-in hybrid electric (which can can run on electricity or gas).

Zero-emissionvehicles are currently a smallbut growingslice of the Canadianvehicle market. Of 1.64 million new vehicles registered in 2021, just over 86,000 of them or 5.2per cent were ZEVs, up from 3.5 per cent in 2020,according tofederal government datapublished in late April.

That's a leapfrom a decade earlier: In 2011, just 518 zero-emissionvehicles were registered in Canada 0.03 per cent of new registrationsthat year.

The rising market sharecomes as more and more ZEV options roll out in Canada, in tandem with an increased government focus on tackling climate change including by cutting transportationemissions, which accountfor about a quarter of Canada's CO2 emissions.

The federal government's strategy won't mean a complete ban on gas cars. In 2035, you'll still be able to buy one that's used,or you could buy a new plug-in hybridand keep putting gas in the tank.

But that would still mean declining demand for petroleum and a big dent in gas stations' earnings if they don't find a new model.

A new pain at the pumps

Research by international consultants paints a dim picture for gas stations' future. Boston Consulting Group warns that up to 80 per cent of service stations may be unprofitable by 2035, while Sia Partners projects that 43 per cent of Europe's gas stations will be out of business by 2050.

A motorist fills up his car's tank at a gas station in Vancouver on March 4. Currently, electric vehicle drivers may need to charge their vehicles for 30 minutes or longer at a charging station far longer than a takes to fill up a tank with gas. (Ben Nelms/CBC)

Both consulting firmssay the industry's survival will hinge on figuring out, and adapting to, whatfuture customers will want everything from better food optionsto fully automatedcheckouts and, predictably, electric vehicle charging stations, of which there are currently more than 5,000 in Canada.

Canada's major fuel companies have already begun that shift, building their own cross-country charging networks many of which will be located at existing gas station sites.

Those sites will have to rethink their business model as customers are forced to spend more time at the stations waiting for cars to charge. It can take 15 to 45 minutes, or longer, to charge an electric vehicle's battery to 80 per cent depending on how empty the battery isand the capacity of the charger.

As a result, gas station operatorsare considering whether a driver wants to spend that time inaconvenience store, sitting down for a meal, shopping for groceriesor just waiting it outin their car?

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Parkland Corp., which owns the Pioneer, Chevron and Ultramar brands, is contemplating just that as it rolls out its own network of 25 EV chargers at highway locations between Vancouver Island and Calgary.

The Calgary-based company recently sponsored a competition to design future charging stations. The winner was a modular design whose size could be scaled up or down depending on the location. It features indoor and outdoor spaces, sustainable materialsand solar panels a far cry from the current look of most gas stations.

This design, titled 'More with Less', by Scottish architect James Silvester, won a competition to design the electric fuelling station of the future, on Feb. 1. The competition was run by Electric Autonomy Canada and sponsored by fuel company Parkland Corp. (James Silvester/Electric Autonomy Canada)

"[EV drivers] are going to want some space to stand up and stretch their legsand get some fresh air while they are on a longer journey," said Darren Smart, Parkland's senior vice-president of strategy and corporate development.

"We've conceived of a few different things that they might be interested in, but I think that's also going to evolve over time."

Petro-Canada, which already has 57 charging stations operating along the Trans-Canada Highway from Vancouver Island to Halifax, is piloting different amenities to see what attracts customers.

In Cookstown, Ont., about 80 kilometres north of Toronto, for instance, drivers can sit inside and watch TV, eat a burger on the outdoor patioor take their furry pal to the on-site dog park.

A dog park is one of the amenities Petro-Canada is piloting at its electric vehicle charging station in Cookstown, Ont., north of Toronto, to gauge customer interest. (Suncor Energy)

"The thought was: We're building a new site, let's throw all of [our concepts] out at once, so then we can evaluate which ones do we really think customers need," said PatrickRitchie, vice-president of sales and marketing at Suncor Energy, which owns Petro-Canada.

Build it, and driversmight come

Even as EV charging networks roll out, there's also the question of just how much use they will get in future, given that nearly 90 per cent of drivers "always" or "often" charge at home, according to one U.S. study that surveyedmore than 9,000 owners of battery-powered and plug-in hybrid electric vehiclesin October and November 2020.

Research from the International Council on Clean Transportation, an environmental think-tank, estimated that by 2035, Quebec will need about 79,000 public chargers compared with 2.3 million chargers at homesand 44,000 at workplaces.

But many people living in apartments and condominiums won't have easy access to a parking spot next to a charger and that's a market that fuel companies are hoping to tap.

In fact, Ritchie says, some urban gas stations could be completely replaced by EV charging stationsif it makes good business sense.

An electric vehicle charging station is pictured under a solar panel.
An electric vehicle charging station is pictured in Burnaby, B.C., in October 2020. While most drivers will charge their electric vehicles at home, people living in condos and apartments may not have easy access to parking near vehicle charging stations. (Ben Nelms/CBC)

"In Vancouver, we have some properties we're looking at where ... 10 years ago, we would have said, 'This should be divested. Itdoesn't make sense to utilize this property this way.'But now we're saying, 'We should install EV chargers, because there's a condo next door.'"

Finding room for a longer stay

In the meantime, smaller gas station owners have to weigh whether or when they should convert precious forecourt space to electric charging stations, says Rob Hoffman, director of government and stakeholder relations in Western Canada forthe Canadian Fuels Association.

"The main concerns right now arewill this be economic?" he said. "If we put in charging stations, usually people are going to need to be at a site for 30 or 60 minutes, or maybe more. Do we have room for those people?"

Electric vehicle manufacturer Tesla is building its own charging network across Canada, including this charging station in Markham, Ont., shown in April 2020. (Frank Gunn/The Canadian Press)

For Friesen, it's not yet worth adding EV chargers since the demand isn't there, but she says she'll keep considering whether to allocate space as the market shifts in years to come.

"As I renovate a site, it's definitely something that I've kind of got an area pigeonholed for."

With that in mind, she says she's optimistic the family business will be thrivingif and when her teenage kids take it over in the future.

"I would love to say that, one day, Gales will be run by a fourth generation, but that's up to them," Friesensaid."But I am certainly setting up this company with the best of intentions to get them off on the right foot."

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