So, you know I drive my car to and from Philly. And, let’s not forget the trip between Charlottesville and DC. So, I’ve developed two favorite vendors for my stops. One is WaWa. This company has the best food, great coffee, fantastic shakes (we have to rely on my son for this fact), clean bathrooms, and great prices. Oh- and they treat their employees really well. Which is why service is fantastic.
But, going South, there are not a lot of WaWa. Having started in the Philly area, that’s not surprising. So, when going South, I rely on Sheetz. Not quite as good for food selection, but gas prices, clean bathrooms, and great coffee- they score high on the satisfaction list.
And, this chain- that covers six states in the mid-Atlantic region- is about to make it a sore sight easier for those of us who are contemplating vehicle choices that don’t rely on gasoline. The Sheetz chain is negotiating to provide charging stations- making the deal with Tesla Motors.
Oh, wait. They already have started with eight service stations in Pennsylvania and North Carolina. But, these are not catering to Tesla- yet. (There ARE other electronic vehicles, after all.) But, you can bet the high speed chargers for Tesla Motors will soon be offered.
Tesla needs these service stations to increase its business sales in the East. Because without the charging stations, folks won’t be lining up to buy the cars (like their more affordable S). Those charging stations mean EV (electronic vehicles) can travel well beyond one’s home.
Which is important because over the next 25 years, we expect 1/3 of all car sales to be of the EV variety. And, it’s not a flick-the-switch deal to make it possible for service stations to provide rapid EV charging. Sure, new stations can add the power conduits, so they are ready. But, retrofitting service stations that have big petroleum fuel tanks- not so easy.
And, it also presents big problems for the service station business model. These entitites currently expect us to spend 3 minutes to fill our gas tanks. Which means the food and drinks they offer have to be ready to go within that time frame.
But, an EV charge takes about 15 minutes. How will these service stations generate the revenue they expect when folks spend 5X the time at their location? (This is akin to having a manufacturing firm find its product turnover drop from 7 X a year to 1.2 X. That’s a lot of lost revenue!)
But, if we are really talking about 1 in 3 cars being EV by 2040, then the service station has no choice. It either adapts- or disappears.
So, the firms are considering big changes to their model. Maybe they will adopt the WaWa or Sheetz model, where customers can buy a variety of custom made foods at prices ranging from $ 1 to $ 8, plus pop, donuts, candy, shakes, ice cream, and the like. (So, you see, it’s not terrible surprising that it’s Sheetz that is providing the EV solutions now.)
It’s also why Tesla has been seeking out resorts and restaurants to provide EV charging locations. Because those firm’s business model has folks staying longer and spending more money. That means having a 15 minute charging session is inconsequential to their customer turnover rates.
And, right now, many retailers have been getting those EV stations installed almost for free- because the car vendors are fronting the costs. But, you can bet as the proportion of EV vehicles increases, the specialty car vendors will simply stop subsidizing the costs for the service stations.
Looks like it’s not just the automotive industry that needs to adapt its business model. The service stations better change just as quickly.
(This is the s… rolls downhill concept.)
I never thought about the service stations! I like the idea of finding the ones that have restaurants attached.
It is interesting when you try to discern how little changes in what happens can alter a business model. And, perhaps, if the model doesn’t get adjusted… failure!