The automotive industry is going through a rapid transformation due to the deployment of electric cars and the anticipated arrival of autonomous vehicles. Drivers’ preferences and needs are changing as well. Can fuel stations reinvent themselves to accommodate all these developments? Is there a place for fuel stations in the future at all? If so, how would they look like?
When coffee is more important than petrol
As cars become more efficient, drivers do not need to stop so often to refill tanks. How to attract clients when they don’t need to refuel? In fact, it may not be so difficult, as a large number of customers come to stations to get breakfast, a cup of coffee, or a take-away meal rather than fill their car. And forward-thinking operators, both big chains and independent, are already cashing in on this need for convenience retail and are developing alternative sources of revenue to fuel.
For Applegreen, one of the largest fuel retailers in Ireland, coffee is already the greatest profit-generating product they sell. Over the past couple of years, the company partnered with coffee chains, Costa and Lavazza, as well as has developed its own café brand, Bakewell. Applegreen has also linked with food brands such as Subway, Freshii and Burger King to expand and diversify its food offering.
In Australia, Caltex has started testing its convenience marketplace across several strategic locations. The Foodary shops offer barista-made coffee, fresh foods, and local goods. Their app allows customers to make orders without even leaving the car.
Global giant, Shell, has applied a similar tactic – the company sells around 60 million cups of Costa coffee at its filling stations, many of which also have a Waitrose store attached. The company has also launched its own brand of food: ‘Deli2Go.’
Fuel stations are transforming into mini-shopping malls in front of our eyes. The next step could be offering premium, or VIP services. Shell is already experimenting with this concept. The company opened two sites in Bangkok, selling exclusively the highest quality fuel, V-Power. The clients can also have a coffee served in a luxury café. Each customer is allocated two attendants: one serves a coffee and another one services the car.
In the future, a fuel station may be a place where you can collect your Amazon order, delivered to the site by drones. Who knows? The opportunities are numerous.
Stations of the future will offer a range of fuels
Oil and gas giants have been heavily criticised by environmental groups, political parties, or even shareholders for not doing enough to explore alternative fuel options. The situation has been changing recently, with more and more companies investing in the development of ‘cleaner’ fuels and associated infrastructure. As a result, stations of the future will likely offer a range of fuels besides gas, petrol, or diesel.
In Brazil, Shell established a joint venture with Raizen to produce ethanol from sugar cane. Such biofuel has a 70% lower carbon footprint than conventional petrol. The company has also set up a partnership with Daimler to commercialise hydrogen gas for powering hydrogen fuel cell vehicles. By 2023, the company plans to have hydrogen-fuelling pumps installed at 400 sites across Germany.
In California, Holland, and other parts of the word where there is a growing demand for electric cars, the company is working on the development and deployment of supercharging technology. In central London, Shell is preparing to open stations offering motorists biofuels, electric vehicle charging points, and hydrogen cell refuelling.
Other companies are also working on diversification of their fuel offer.
ExxonMobil has recently joined forces with Genomics to develop transportation fuels from algae. If this $600 million project is successful, algae-based gasoline will become available at the company’s service stations one day in the future.
In Japan, JXTG Nippon Oil & Energy, in partnership with Toyota Motor Corp, Japan H2 Mobility LLC, and other companies, has embarked on a project to build 80 fuel stations for hydrogen fuel cell vehicles by 2022.
BP has committed to installing electric car charging points in UK petrol stations and is rolling out FreeWire rapid chargers across some sites in Europe throughout 2018.
Also, we plan to focus in more details on European initiatives in an upcoming article.
Will electric cars kill fuel stations?
The electric revolution is on. Countries such as the Netherlands and Norway are very strong advocates of the technology, planning to entirely phase out diesel engines by 2025. United Kingdom and France have banned production of diesel cars starting from 2040. But even without government intervention, the technology will eventually prevail, industry experts say. A survey conducted by Bloomberg New Energy Finance projected that the total cost of electric vehicle (EV) ownership (purchase and operational costs) would drop below those of conventional petrol and diesel cars by 2022. How will this technological change impact the stations?
There is a risk that inner-city charging points will become scarce, as drivers will prefer to charge batteries at home or at work. This may be true for some countries, like the United States, where most EV drivers live in the suburbia. In the United Kingdom, in contrast, 80% of the drivers live in flats and park their vehicles on the street. This is also the case in China and other parts of the world where condensed urban areas dominate. All these drivers will have to charge their cars somewhere.
Depending on the size of the battery and the speed of the charging point, it takes between 30 minutes to 12 hours to charge an electric vehicle. In the meantime, Shell is rolling out supercharging technology across its 80 biggest petrol stations in Europe, allowing drivers to charge their cars in five to ten minutes. This offer may attract time-hungry drivers to the stations.
Others see the opportunity in expanding retail offer to consumers waiting for their vehicle to charge. Elon Musk, the CEO of Tesla, considers opening restaurants at its network of charging points.
The future with no fuel stations at all
What if the fuel station of the future wasn’t a fuel station at all? This futuristic vision may become a reality with the deployment of autonomous wirelessly connected cars.
According to Nissan, such station will be charged by the sun, wind, and the oceans, encouraging drivers to store and distribute renewable energy. With wireless charging and universal connectivity, vehicles can autonomously charge themselves and repark so that another vehicle on the street can use the same bay while you are asleep. And in the morning, your house and the grid can source energy straight from your car to power your home as you start your day.
When you pull up at the workplace, you can drive straight into the office. An automated parking system would move your car away to be recharged, or the battery can even be used to power your office. The whole city can be connected. Clean energy will be so abundant it will become a free commodity to be shared among the city and its people. Places once occupied by car parks and fuel stations can be replaced by green spaces, building a cleaner, kinder environment for our children. The fuel station of the future could be your home, your street, your city, your car.
As powerful and inspirational Nissan’s visions are, they may take serval years, or even decades from now to materialise. We will come back to this topic in the next article, which will study the challenges posed by the upgrade of the power grid necessary to support a major swing from fossil fuel to electricity-powered vehicles.
Despite the many uncertainties, we are sure there will be a place for fuel stations in the future. How would they look like? We hope they will be modern, aesthetical, built using sustainable materials, environment-friendly, offering not only a range of different fuels but also a vast selection of attractive products and services, and simply great places to be.
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