Will Gas Stations Exist In 15 Years?

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M
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Will Gas Stations Exist In 15 Years?

Post by M »

A year ago I would not think about this question - but recently it has dawned on me that electric vehicle sales are accelerating at a faster pace than I anticipated and many countries and states are moving ahead with plans to ban new gas vehicles all together in the next 15 years or so. See here:

https://www.kcrw.com/news/shows/greater ... ndate-2035 - California bans new gas vehicles by 2035.

and here for electric vehicle sales:

https://insideevs.com/news/523295/europ ... -june2021/ - 19% of new vehicle registrations last month in all of Europe had a plug(10% of new vehicle registrations were all electric)

These are stats for BEFORE Tesla giga texas and giga berlin come online, and before the electric trucks are launching (Rivian, electric F-150, Cybertruck, etc).

Just a year ago I was reading articles projecting 7% of new car sales to be BEVs by 2025. Today all of Europe is already at 10%. It seems that even the projections are conservative. As battery prices continue to plummet, I can't help but wonder if EV sales will continue increasing in a logarithmic fashion...

If this happens - What does this mean for gas stations? Automotive repair shops? Autozone? Will the infrastructure that supports gas cars start to crumble?

I tend to keep cars for 10+ years. I have had my current car for 8 years. It's possible I may have whatever car I purchase next in 2035.

Anyone have any guesses as to when the gas stations start shutting down? It doesn't seem like now would be the best time to buy a gas station at 25X earnings.

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Bankai
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Re: Will Gas Stations Exist In 15 Years?

Post by Bankai »

M wrote:
Mon Aug 02, 2021 12:00 pm
It doesn't seem like now would be the best time to buy a gas station at 25X earnings.
Indeed, it would be like buying a horse-cart business in the first decade of XX. century. Tesla model 3 was the top selling car in the UK last month - not only among EVs but all cars. The ban on new combustion engine cars kicks in in 9 years' time. There'll be residual population of combustion engine cars left after 2030, probably enough to keep gas stations going for another decade or so, but more and more people will be switching ahead of the ban. Can gas stations move to a hybrid model and then go fully electric? It's likely to be cheaper than building EV chargepoints from scratch - or maybe not? I for one am looking forward to quiet and (mostly) pollution-free streets.

Unrelated, but I bought a couple of Tesla shares today as it tries to break above $700. On the way to become the biggest company in the world by market cap?

Also, this is a good example why blind faith in reversion to the mean is so dangerous. Shareholders in horse-carts and chimney cleanning businesses are still waiting.

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Re: Will Gas Stations Exist In 15 Years?

Post by ducknald_don »

If you assume that newer cars do the most mileage then it could transition quicker than you expect.

The largest petrol forecourt chain in the UK recently bought a supermarket, I'm guessing they can see the writing on the wall.

Most of them make little or no money on the fuel, they rely on the attached shops/cafes to make any money. I'm not sure anyone will want to visit them if they don't need petrol though. In theory they could offer charge points but I'm guessing most people will charge at home.

It's certainly going to be interesting to watch it all unfold.

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Re: Will Gas Stations Exist In 15 Years?

Post by Bonde »

I think that many of gas station at highways will survive if the management will plan for a transition to electrons.

Cirkle K in Denmark and Norway (probably also in other countries) are putting fast chargers up at many of their gas station. Most people will charge 95% at home but for longer trips many will need to use a fast charger and stop for 20-45 min. That is a good opportunity to sell food and snacks. I hope that the electricity will be cheap but right now the sellers take a good margin on electricity at least in Denmark and many have even got EU to support setting up the chargers.

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Re: Will Gas Stations Exist In 15 Years?

Post by jacob »

While I don't know what gas stations are selling for, I doubt the P/E is as high as 25. If I had to take a bet, being leverable steady cashflow, zero/negative growth, and privately held, the P/E would be much lower, maybe 2-5.

Fun fact: A blog sells for a P/E of 1-2. Obviously they're not expected to last long on average :-P

That said even EVs need to recharge and the present gas stations occupy real estate near traffic points, so unless traffic (private car ownership) manages to magic itself away (one can only hope), the primary valuation will be according to location (rather than permits and tanks underground) as the drivers' infrastructure gets replaced by charging stations.

So no, they won't go away but instead of having 6-12 gas pumps, they'll have 1 or 2 with the rest being whatever supports the growing EV fleet.

Add: Bonde beat me to it somewhat. Also, it depends on what happens to the price of electricity as alternatives get more demand from transportation and fossil fuels get less demand due to regulations. As it is, PVs are unfortunately NOT "too cheap to meter" (and according to physics, they never will be), so infrastructural game-changers are unlikely.

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Re: Will Gas Stations Exist In 15 Years?

Post by Campitor »

I predict gas stations will still be around in 15 years. Old gas vehicles will still be around and will need fuel. It will be a significantly longer time before all the new electric cars completely replace all the old gas cars on the market. And I also imagine that countries with a non-existent or small electric grid will still use gas powered vehicles.

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Re: Will Gas Stations Exist In 15 Years?

Post by jacob »

More add: The "standard-rule" is that it takes 30 years from the time from invention to widespread technology adoption. For example, cellphones and videoconferencing were first prototyped in the 1960s and 70s. Ditto internet. Based on this, don't expect EVs to be "normal" until 2040+.

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Bankai
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Re: Will Gas Stations Exist In 15 Years?

Post by Bankai »

Unless there's legislative pressure, such as in this case - why would it take until 2040 if only EVs will be sold from 2025/30? We've in a mass adoption phase already, not at some super early stages. One might also say that they've been around since XIXc. anyways so not exactly a new technology.

Norway's at over 80% of new cars already for over half a year now, barely anyone still buys ce cars over there:
Image

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Re: Will Gas Stations Exist In 15 Years?

Post by chenda »

This guy believes that EV will kill off mass private car ownership.

https://shift.newco.co/2017/05/25/this- ... -will-die/
an internal combustion engine drivetrain contains about 2,000 parts, while an electric vehicle drivetrain contains about 20. All other things being equal, a system with fewer moving parts will be more reliable than a system with more moving parts.

And that rule of thumb appears to hold for cars. In 2006, the National Highway Transportation Safety Administration estimated that the average vehicle, built solely on internal combustion engines, lasted 150,000 miles.

Current estimates for the lifetime today’s electric vehicles are over 500,000 miles....

...Of course, with a 500,000 mile life a car will last 40–50 years. And it seems absurd to expect a single person to own just one car in her life.

But of course a person won’t own just one car. The most likely scenario is that, thanks to software, a person won’t own any.
I'd say about half the petrol stations in my town have closed down in the last decade or so, either the site was redeveloped or it switched solely to small scale retail or industrial use. They have survived a bit more in rural areas.

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Re: Will Gas Stations Exist In 15 Years?

Post by jacob »

Bankai wrote:
Mon Aug 02, 2021 2:00 pm
Unless there's legislative pressure, such as in this case - why would it take until 2040 if only EVs will be sold from 2025/30? We've in a mass adoption phase already, not at some super early stages. One might also say that they've been around since XIXc. anyways so not exactly a new technology.
Because of dinosaurs. Your argument can be and has been made just about any piece of new technology. It's there, so why don't people just go already? Because old habits die really really hard; indeed so hard that it has to happen literally at demographic speeds. It therefore takes about a generation to do the switch. Unlike technology which progresses at an exponential rate, the human mind, which still operates on average at neolithic transition speeds (~0), does not.

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Re: Will Gas Stations Exist In 15 Years?

Post by Ego »

M wrote:
Mon Aug 02, 2021 12:00 pm
Anyone have any guesses as to when the gas stations start shutting down?
We are already seeing stations shutting down here with a few larger stations expanding. They also seem to be transitioning from oil-company branded stations (Arco, Chevron, BP,...) to generic names.

I would guess that we are not far from a time when drivers of gasoline powered vehicles begin feeling the range anxiety that drivers of electric powered vehicles feel today. I also see companies that specialize in converting highly sought after vehicles and muscle cars to electric so they can survive the transition. My favorite is https://www.zelectricmotors.com/ but I lusted after this thing recently https://youtu.be/ZnmORk9M__8
But of course a person won’t own just one car. The most likely scenario is that, thanks to software, a person won’t own any.
I agree with @Chenda that car ownership will decline. I noticed the trend here with my tenants. I expected the increase in Uber/Lyft prices to cause them to revert to car ownership. It turns out Amazon prime fresh kicked in just in time to take away the excuse that they need a car to go grocery shopping. Once the human driver is removed from the Uber/Lyft price calculation I would imagine the prices will fall significantly. The downside, right now those few tenants rarely venture beyond walking distance from home.

Here we are mostly street parking without driveways which makes electric vehicle ownership very challenging. Not impossible, but more difficult than gas powered vehicles. That calculation could change quickly as more charging stations go in around town and petrol stations disappear at a faster rate.

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Re: Will Gas Stations Exist In 15 Years?

Post by jacob »

Might wanna compare it to telecom? Rural areas still have landlines (due to range issues with microwave towers) but it's not something you want to invest in. Urban areas are almost exclusively wireless. Moderate this translation by the fact that people keep cars longer than they keep phones.

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Re: Will Gas Stations Exist In 15 Years?

Post by Campitor »

chenda wrote:
Mon Aug 02, 2021 2:06 pm
The car manufacturers have been working on automated electric vehicle fleets. Eventually I believe the automakers will stop selling cars to consumers and will instead leverage existing technology (lyft, uber) to schedule rides at a fee. But instead of a human driver you will have Johnny-Cab driving.

Automakers are already predicting a sharp decrease in car purchases as the world transitions to a more elderly and retired population - they have been working on a fee based service per my inductive reasoning.

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Re: Will Gas Stations Exist In 15 Years?

Post by Viktor K »

I think leased batteries would have to catch on more. I understand that one company is expanding outside of China to Europe now.

The idea of stopping for 20-30 minutes at a gas station doesn't seem as good as swapping out a battery at a station and continuing on your way.

NIO is the company that I read about.

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Re: Will Gas Stations Exist In 15 Years?

Post by Bankai »

jacob wrote: More add: The "standard-rule" is that it takes 30 years from the time from invention to widespread technology adoption. For example, cellphones and videoconferencing were first prototyped in the 1960s and 70s. Ditto internet. Based on this, don't expect EVs to be "normal" until 2040+.
jacob wrote: Because of dinosaurs. Your argument can be and has been made just about any piece of new technology. It's there, so why don't people just go already? Because old habits die really really hard; indeed so hard that it has to happen literally at demographic speeds. It therefore takes about a generation to do the switch. Unlike technology which progresses at an exponential rate, the human mind, which still operates on average at neolithic transition speeds (~0), does not.
'Normal' rules don't apply here - was there ever a new technology so heavily promoted by governments to the extent of massive cash insentives and outright ban on selling old technology? Add to that population waking up to climate change with all the pressure and high stakes of 'saving the planet' and you have a situation which never before occured with any piece of technology.

It also would be good to define 'normal' and a 'widespread adoption'. It looks to me that Norway is already there or thereabouts with 85% of new cars being electric or hybrid. If you insist on even higher proportion then even some technology that's been around for thousands of years will not make the cut (there are still hundreds of millions shunning knife and fork and eating exclusively with their hands).

So, with Norway already at the point of a widespread adoption, how long will it take for other countries to get there? Here's Europe as of this time last year:
Image

There were already several countries with penetration between 10-20%. It took Norway around 7 years to get from c. 10% to 85%/widespread adoption. Now, it could take longer or shorter for others to get there: on the one hand, Norway is the richest and has/had the greatest financial incentives, which will be hard for others to match. There will likely also be issues with supply and charging infrastructure. On the other hand, EVs are getting cheaper and more efficient all the time so the cost of switching goes down all the time. Norway is also vast and scarcely populated so it should be easier to build the infrastructure pretty much everywhere else in Europe. Then, there's a growing pressure from climate change to which population in Europe is finally waking up, heavy support from governments and outright ban on electric combustion cars coming in in several years. Overall, these will probably roughly balance each other out, so most countries should take around the same trajectory as Norway. From the above chart it looks like some will get there by 2025/6 while others might need a decade or more. But it looks highly likely to me that by the end of this decade looking at EU as a whole it will have achieved a widespread adoption of EVs.

Now, it certainly will take longer for other parts of the world to get there, but then there are parts of the world with no running water and that doesn't mean we can claim that there isn't a widespread adoption of running water in the world.

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Re: Will Gas Stations Exist In 15 Years?

Post by white belt »

Is it even possible for the USA to scale up its power grid in time to support such ambitious electric vehicle adoption predictions? From the various interviews and research I’ve looked into, energy infrastructure buildout just doesn’t happen at that pace. The US power grid can barely support current loads. Throwing a lot of money and government support can maybe speed up the transition, but you are still going to be constrained by physical realities e.g. copper mining/processing, qualified labor to upgrade infrastructure, and so on.

And that’s just the infrastructure piece. What about all of the components that go into current EV’s like cadmium, cobalt, lithium, rare earth, etc? Can we scale up production of all of those enough to replace the entire ICE fleet? Look at the bottlenecks that the semiconductor shortage has caused.
Last edited by white belt on Mon Aug 02, 2021 10:33 pm, edited 1 time in total.

George the original one
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Re: Will Gas Stations Exist In 15 Years?

Post by George the original one »

Gas stations & service stations will continue to exist in some form because:
- rural chainsaws, mowers, farm implements, RVs, etc.
- convenience stores
- tires, wheel bearings, A/C, etc all require service
- nostalgia and those who won't give up their gas machines

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Re: Will Gas Stations Exist In 15 Years?

Post by unemployable »

Many vehicles sold today will still be in good condition in 20 years, and it's better for the environment to keep them running as long as possible than junk them and buy a new EV, so pretty clearly yes. I highly doubt gas stations will go away in the US in my lifetime (age 50).

Weren't self-driving cars supposed to have taken over the world already? I recall hearing "the technology is here, it'll just take two or three years" while Obama was still president. Someone posted here a few years back worrying about buying a car and having it be obsoleted by self-driving models; I'll try to find the thread. Point is making promises and mandating technology is the easy part. Every EV production and sales target I'm aware of has been missed, including by Tesla itself, which promised 500,000 EVs sold in 2018 -- they fell short of that even in 2020, albeit only by a couple thousand. And oh by the way EV prices are not "getting cheaper all the time". I suspect a lot of those mandates will be fudged if not outright delayed, such as by deciding hybrids are OK or various larger vehicles don't count.

Gas stations as they are now basically break even on gas. They offer gas to get you to go inside the store and spend $2 for a soda that cost them a quarter. The number of gas stations in the US has been on the decline since the 1970s oil crunches for a related reason; it's all about volume.

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Re: Will Gas Stations Exist In 15 Years?

Post by ducknald_don »

Campitor wrote:
Mon Aug 02, 2021 3:30 pm
The car manufacturers have been working on automated electric vehicle fleets. Eventually I believe the automakers will stop selling cars to consumers and will instead leverage existing technology (lyft, uber) to schedule rides at a fee. But instead of a human driver you will have Johnny-Cab driving.
Wasn't the head of Google's autonomous driving division saying it is going to take 30 years before they have a general solution. 30 years sounds like never to me.

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Re: Will Gas Stations Exist In 15 Years?

Post by ducknald_don »

white belt wrote:
Mon Aug 02, 2021 7:21 pm
Is it even possible for the USA to scale up its power grid in time to support such ambitious electric vehicle adoption predictions?
I don't know about the US but in the UK the National Grid has said it only needs to go back to 2002 levels of production to cope with the whole fleet moving to electric.

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