The end of gas stations: A seismic shift brought on by EVs

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  Quantumrun Foresight
• April 12, 2022

Insight summary

The accelerating adoption of electric vehicles (EVs) is reshaping the way we think about transportation, driven by the need to reduce greenhouse gas emissions and support a cleaner environment. This transformation is affecting various sectors, from the global oil industry, which may see a decline in demand, to gas stations that are adapting to new business models and even becoming historic-cultural monuments. The long-term implications of this shift include changes in urban development, employment, energy management, and global geopolitics.

End of gas stations context

The need to address climate change has, in part, accelerated the adoption of EVs. Supporting this transition includes various public and private sector initiatives that aim to reduce greenhouse gas emissions. For example, California passed legislation stating that by 2035, all new cars and passenger trucks sold in the state need to be zero-emission or electric. 

Meanwhile, General Motors, one of the largest automobile manufacturers, announced that by 2035, it may only sell EVs. This decision reflects a broader trend in the automotive industry, where companies are shifting their focus towards more environmentally friendly options. By committing to electric vehicles, manufacturers are responding to consumer demand for cleaner alternatives and government regulations that encourage greener practices.

A 2021 report forecasted that the number of EVs on the road is likely to increase at an ever-faster rate, reaching 145 million globally by 2030. This trend can enhance productivity and efficiency in transportation while reducing dependence on fossil fuels. The shift towards EVs represents a significant transformation in how we think about transportation, and it's a change that everyone may need to prepare for.

Disruptive impact 

The growing adoption of EVs could eliminate the need for millions of barrels of oil to be converted into gasoline daily. Up to 2 million barrels a day may need to find new buyers if 2022 climate policies remain in place. This shift away from traditional fuel sources can have a profound impact on the global oil industry, leading to potential changes in pricing, supply chains, and employment. Countries heavily reliant on oil exports may need to diversify their economies, while consumers could benefit from decreased fuel costs as the demand for oil diminishes.

Moreover, as consumers increasingly purchase EVs, gas stations are receiving fewer customers as EV car owners either recharge their vehicles at home or at specially fitted charging stations. According to a study by Boston Consulting Group, at least a quarter of service stations worldwide risk closure by 2035 if they do not adapt their business models by the end of the 2020s. The decline of traditional fueling stations may lead to new business opportunities, such as the expansion of electric charging networks, but it also poses risks for those unable to adapt.

For governments and urban planners, the rise of EVs offers opportunities to redesign transportation infrastructure and reduce pollution. The decline in gasoline consumption can lead to cleaner air in urban areas, improving public health. However, the transition to electric vehicles also requires significant investment in charging infrastructure, education, and incentives to encourage adoption. 

Implications of the end of gas stations

Wider implications of the end of gas stations may include:

• Redesigning the gas station experience, with gas stations being remodeled to offer EV owners remote working spaces and other amenities while they wait for their EVs to be charged, enhancing customer convenience and diversifying revenue streams.
• Some station owners selling off or redeveloping their prime real estate into new residential or commercial applications, contributing to urban development and potentially altering local landscapes and property values.
• Vintage gas stations and other infrastructure built in the 20th century to cater to internal combustion engines and having historical significance to local communities and commuters on specific routes being classified as historic-cultural monuments, preserving cultural heritage.
• The shift to EVs leading to a decrease in automotive maintenance jobs related to internal combustion engines, potentially affecting employment in the traditional automotive service industry.
• The increased demand for electricity to charge EVs leading to a greater focus on renewable energy sources, contributing to a cleaner energy mix and reduced greenhouse gas emissions.
• The development of new battery technologies and recycling methods for electric vehicles, leading to advancements in energy storage and a reduction in the environmental impact of battery disposal.
• The potential for EVs to be integrated into smart grid systems, allowing for vehicle-to-grid energy transfer and more efficient energy management in urban areas.

Questions to consider

• What future business would you open on locations that currently feature gas stations?
• Do you think the development of nationwide EV charging infrastructure will be faster or slower than most analysts forecast?