John Eichberger:
There’s been a series of reports we’ve been doing. We’re trying to provide insights to the market so that we can develop an infrastructure that supports a lower carbon mobility situation in a way that is consumer friendly consumer centric. There’s a lot of hype being talked about in the media. A lot of new reports coming out, a lot of political statements being made about where we need to go, how we need to get there. We need to electrify everything. We need half a million chargers by 2030, you know, 50% of all sales and 2030 will be electric. And all that stuff is interesting and great cocktail fodder, but the reality is much more complicated. And so what we’re trying to do with our, our life cycle assessment report, our evaluation of EV charger policies and how effective they’ve been over time. And this newest report on charger deployment optimization is provide some more granular insights so that we can make long term strategic decisions that benefit the environment at the same time, work in the market and benefit consumers.
There’s a series we’ve got a few more coming out here by before the end of 2022 that are designed the same way to help open up the dialogue so that we can be much more thoughtful and strategic about our solutions, because we’ve when we started the fuel since it almost 10 years ago. Now, um, we started with this theory that, you know, if a solution is not sustainable from an economic and long term perspective, it’s going to fail. If it imposes some burden of convenience or cost on the consumers going to fail. And so we need to keep the consumer mind in at top of mind, as we build our strategies, otherwise the strategies will not be successful. And so our, our research is trying to help support that.

Jeff Lenard:
And that’s one of the things we’ve long talked about when you and I would work together on fuels issues. You always stressed we are for the consumer, retailers, are the end point, we’re the conduit with customers. So while there can be some very thoughtful policy decisions that are considered, it really comes down to understanding the consumer and understanding how retailers play a role. And we’ve both talked to retailers who have said, look, you know, EVs are coming, no question, we’re building for that, but we’re also building for a future where we see that people will be using internal combustion engines for the next 30, 40 years. And you take them in tandem as you move forward. So this report is just another in a series in looking at how you do that. And it it’s fairly timely in all those news, uh, for forecasts or reports that, that you’ve, uh, mentioned. California’s mentioned, uh, by the year 2035, 100% of all new cars will be electric. We’ll set that aside for now. And we’ll just say, Hey, you know, it’s a really timely discussion because this is dominating the news in terms of how do you see, um, what the future is from mobility. And, and let’s

John Eichberger:
Just, you opened up this, the, the program referring to the federal investment of $7.5 billion dollars. Now we commissioned this before that bill was finalized, but we knew it was coming. We think if you’re investing taxpayer dollars, we have to do it so efficiently and effectively. We have to deliver an end product that benefits the, the public good and how we deploy the, those resources, where we install charters and what kinds we, we install to get the most bang for our buck is much more important now that we’re using taxpayer dollars. Um, when you’re using your own money, you can, you can do a couple things. You can try a couple things that you think are cool and unique, but when you’re using the taxpayer dollars, you need to be so responsible with that. And we’re hopeful that this study provides some insight so that that money is invested and delivers the greatest value to society. It possibly can. Otherwise it’s a real dereliction of duty.

Jeff Lenard:
That’s a great point. That’s a great way to set up the discussion. So where are we on current demand and what are some of the projections for EV growth over the next few years?

John Eichberger:
We’re probably about, I think just a one and a half million vehicles on the road have a plug, um, through July of 2022, 5% of all vehicle light VE vehicle sales in the us were battery electric. hat does not include the plug-in hybrid. I don’t believe I gotta look at the day of data again, but it’s right around 5%. So it’s a big jump. We’re at two and a half, 2.9% last year. So pretty good jump. The first seven months of this year, the problem is you’ve got some supply chain problems. I’ve talked to some friends who’ve been trying to buy an EV and they’re on a nine month waiting list to get delivery. Most of the manufacturers have had to increase the retail price of their vehicle to accommodate supply chain and battery costs. Not going down as fast as they, they thought they would.
You’ve got some manufacturers eliminating the lowest level EV because it’s not economical for them to manufacture them. And so you’ve got some headwinds and, you know, you’re strong advocates think everything is rosy and the, the roads all downhill, and you’re just going to key momentum, keep getting momentum and hit these big milestones. We’re going to hit big milestones. And the momentum is accelerating, and there’s a ton of exciting new vehicles coming on the road, um, that we can choose from. And they’re in the body size, people wanna buy. And so it’s a much more attractive market than it was even two years ago, but it is still a challenge. Um, you know, the new inflation reduction act changes the qualification for tax credit. I was talking a friend of mine who works for an automaker. He said, John, we’ve analyzed it in 2024, unless significant change happens,
only three electric vehicles will qualify for the tax credit. Three, that’s it. And this was supposed to encourage and help build the market. It could have a massive negative effect on consumer affordability of these vehicles. So that’s a big challenge. Now you asked about the future. You’ve got a couple big global consulting firms came out in the last year or so saying that half of all vehicles sold in 2030 and the United States will be electric. I really disagree. I think that does not take into consideration the uncertainties of the market. It’s not taking into consideration what would happen if there is a global recession? What happens if inflation stays at 9%, 10%? What happens if electric vehicle prices don’t come down like we projected them to? What happens if the war in Russia and Ukraine continues and we don’t have access certain raw materials we need for the batteries and the different things.
So much uncertainty, so much unknown that to put forth a forecast that half of them will be is completely irresponsible in my opinion. We don’t know what will be. We know the market’s going to grow. Our report was written by S&P Global Mobility and they recently merged with IHS Markets. IHS market has owned vehicle registration data for decades. They’re the go-to for vehicles on the road information. In order to do an analysis of how many chargers we need., they first had to do a forecast of how many vehicles are going to be in the market. Their forecast, which I think is much more conservative than we’ve see, I still think it’s pretty assertive, calls for about 2.8 million plug-in electric vehicles to be sold in 2030, which would be about 16%-17% of vehicles. So a threefold increase over today of new vehicles.

Jeff Lenard:
That’s only 100th of all vehicles. So if we keep that sales rate and everybody drives their car for a 100 years in a 100 years we’ll be all EV.

John Eichberger:
Right? So there’s headwinds. We’ve got 300 million units in the United States. Their forecast is 18 million of those will be electric in 2030, which is 6%. The primary aucience of Convenience Matters and the fuel retailing space, 6% market share in the next eight years will be electric. And some of those will be plug-in hybrid–not in my opinion a disruptive situation. It is leaning that way. We’re, we’re, we’re going to see EVs have a huge role in the market, but it’s the same thing we’ve been talking about for years. It’s going to take time and aspirations are great, and aspirational forecasts are interesting, but we need to take it with a major grain of salt because they’re just forecasts and we don’t know how the uncertainties are going to play out.

Jeff Lenard:
I think people have read news reports that talk about where EVs are being purchased now. And obviously California is a hotbed for it and the East Coast as well. Right now tends to be a coastal thing. I saw a story where somebody said don’t drive through West Virginia because it’s difficult to charge your vehicle. Now that is not a professional recommendation. That’s reciting a news article, you do have these pockets right now that are heavier in EVs and that will obviously change over time. That’s also something the report looked at, right?

John Eichberger:
Again, using the vehicle registration data, in July of 2021, 82% of all electric vehicles in the United States were registered in 15 states. Now, California led at 41% of market share. Then you’ve got 4.5% and 5.5% in Texas and Florida, respectively, in New York at 4.3%. And then you got a scattering. Now you would think that makes sense. These are zero emission vehicle regulated states. A lot of them they’re the largest states, the most populations. So you’re going to be selling vehicles where the people are. But you would think with the influx of new vehicles coming on, the distribution of vehicles would get more geographically balanced. It does a little bit. The forecast of 2030 is 76% of all EVs will be in 15 states. Now, significant changes. California’s going to go from 41% market share to 25%, Oregon and Washington won’t even rank in the top 15 states, and you’re going to have Florida and Texas at the 8% mark.
So you’re going to see some shifting, but you’re still going to have massive sections of this country that are going to be representing less than 15% or less than 25% of all EVs in the market. And so when we start thinking about where do we need to put chargers, you’ve got to put chargers where the EVs are, where demand is. You have to put chargers where the EVs are going to drive. And so part of the [indiscernable] program is to create a national infrastructure and network so that a driver of an electric vehicle knows they’ll be able to get charging whenever they drive. They may have to be strategic about it and plan ahead, but they’re going to be able to get electricity whenever they go. And the other part is filling in the communities. Our study really looked at a census track level, which is about as granular as you can get and looked at a variety of factors to understand at that level of community, what’s the charger demand, what do we need. And start optimizing where we really need to focus our attention. And that’s going to be critical because we want to build the infrastructure to support the drivers in a way that’s economic, responsible and sustainable and understanding where the vehicles are and where the vehicle’s going to be driven is going to be critical to doing that.

Jeff Lenard:
And that’s more than just saying let’s just put a lot in California. Let’s put a lot in Texas. Let’s put a lot in Florida. Let’s put a lot in wherever else EVs are. It’s also the type of place that you might want to find it. And I assume there’s a difference between a neighborhood and a highway or interstate or something like that where somebody from California wants to go somewhere else. You have to allow that to happen. Otherwise the EV has limited value. And that’s also something that you have to take into account in terms of current and future projections.

John Eichberger:
And understanding what level of charger we need. A different locations lays right into the economic responsibility in that business, ROI that sustainability from an economic perspective, because you can go out and put in. And, and one of the challenges with the ne program is any site that’s going to qualify for. The grand has to have 600 kilowatts of charging power. That is a lot a whole foods. Grocery store runs on 400 kilowatts. So you put that in concept. I’ve spoken with some utilities who say, look, we’ve got site hosts who wanna put in chargers. We are 18 months before we can even consider bringing power to their site. That’s sufficient. And so you’re running into a lot of problems in this study. What S&P Global did is they really analyze some cell phone ping data to find out where people spend their time. And what they determined was if we were to strategically place level two chargers, which are much lower costs, much slower to charge, but you install them in opportunity zones, where people are going to be leaving their car for a couple hours, and you make them ubiquitous.
You can build an infrastructure that satisfies needs 90% of the installations or more could be this lower cost level too. And we still keep the EV driver moving. We keep their, their vehicles charged. They would charge ’em when they need to, and we’re not overbuilding. Um, we need to, the other part of this study was we need to know how many chargers we need. And the global standard that they used was to avoid congestion in a market. You want to have about 10, 11 vehicles per charger. So if you have 18 million EVs on the road in 2030, you need 1.8 million chargers. The federal government’s trying to build out 500,000. Now they’re trying to build out DC fast chargers. That’s much more expensive, and I get it. If you’re on the road, you want to charge get going. But if we build a whole series of level two chargers strategically at the grocery store at the school, at the gym, at the point of adventurous at restaurants, at shopping malls, where people go and they can plug in every time they go, it’s not draining your battery and recharging to a hundred percent.
It’s adding 30, 40 miles in an hour because you’re going to be there and you drove 20 miles to get there. So you replen us at 20 miles. You get home, you replen us the other 20 miles and constantly replenishing the mileage. We drive with a lower cost infrastructure. The ROI starts to really make a lot of sense. And I think there’s a lot of value to that. And, you know, level two doesn’t fit everything. It doesn’t fit all needs. It doesn’t fit the convenience store model at all. So you need a big chunk of DC, fast chargers, but let’s do them appropriately. Let’s put them where they need to be, and let’s not overbuild and waste resources. When we do this,

Jeff Lenard:
You, you raised an excellent point there in thinking about convenience retailers, listening to this podcast to be saying, well, you know, that that doesn’t sound like it necessarily benefits me, but it does. When you, when you think about it, in that some of these charges that take a longer period of time, you don’t want that person on your lot. Anyway, if somebody’s going to a mall for four hours, let them charge. And it’s almost like thinking about the introduction of pay at the pump in the mid eighties. Uh, there was a lot of concern at the time that if we offer pay at the pump, then people may not go inside the store and you’ll actually lose sales because you’re, you’re so convenient that people won’t come inside. And as we know, the opposite happened, those that just wanted to get gas, went and got gas, and they went on their way. But the real opportunity came in that somebody that wanted to buy a cup of coffee, didn’t have to wait behind three people that were paying for their gas. So it created a new opportunity to, to grow that in store sale. So I would imagine that we’ll find some of these opportunities here for convenience retailers who have charging that have fast chargers for some of these level two chargers, they’re taking away some of the, the lingering charges. And, and we’ll find these things as, as this develops over the next decade.

John Eichberger:
Yeah. You know, the DC fast charge is the great model for the convenience industry, because you can plug in for 10 to 15 minutes and get a meaningful charge. Um, and that’s where the industry needs to be there. The industry has built this reputation. We’re there when you need us. Now, if I have an EV and I forget to plug in at night, and I got a long drive the next morning, and I don’t have enough charge, I’m panicked. I’m going to think I gotta go to the convenience store, to every gas station to charge you wanna have that service for them. Or there’s a power outage at my house. I need to recharge next day. I need, I need miles. I need them fast. I can’t wait for level two. That’s the, the niche that the convenience industry’s going to going to satisfy, and you have to be there.
The other thing we’re going to satisfy that the convenience industry is I’m going out to grab some lunch. I have my choice between restaurant a restaurant B fast food, whatever one, as a charger, I, you know what? I don’t have a charger at the office. I can replenish what I drove to the office and plug in while I’m eating, I’ll go there because the other store doesn’t have it. And so you start getting this competitive situation where you’re capturing that opportunity charge, as well as the desperation fast charge, um, is really important. The other thing that we’re working on and thinking about doing is trying to do a public education campaign to help consumers understand what to expect when they plug in at a public charger, because we are hearing some horror stories that they plug into a charge that’s 150 kilowatt, and they’re not getting 150 watch.
I, they go inside the store and they scream at the clerk. Clerk’s like, I have no idea what you’re talking about. You know, I mean, that’s not even ours. We, we contracted out to a third party. The vehicle determines how fast you charge that charger may be trying to give you 150 kilowatts. But if you’re at 80%, your vehicle’s not going to accept it. If your battery’s hot, your vehicle’s not accepted. If your VA, if your battery’s not configured to accept 150 kilowatts, guess what? You’re not going to get it. And so helping people understand what that experience should be and what influences it is something that we hope to be able to bring to market in the next year or so.

Jeff Lenard:
And, and of course, another thing to look at is, is the, the condition of chargers. Uh, we’ve all seen pictures of chargers and, and there are people that treat chargers the way, uh, people used to treat air hoses. Um, and it’s, uh, you know, it’s a, it’s a tough world to be an air hose. And it’s a tough world to be a charger, um, in some CA cases where, um, they don’t last long and they are sensitive, they’re sensitive electronic pieces, and you can’t run them over and expect them to work.

John Eichberger:
Right? We have to maintain them. We have to maintain them physically. We have to maintain their software. And if you don’t do, there’s a couple companies out there that haven’t been engaged with that their whole business is about maintenance and uptime. There’s a requirement in the Nevy program, you have to report your uptime. And the goal is 98% up. That means operational. Um, when you pull into a gas station and the nozzles are bagged, the, the despair that fills you, because you’re on two miles to go it’s oh man, same thing with the charger, you pull into a charger and it’s not working.

Jeff Lenard:
Yeah.

John Eichberger:
The difference is typically it’s not the gas station across the street. Mm-hmm , we are now at the point where there’s another DC fast charger across the street. And so making sure that you’re servicing the customer when they need it and how they need it is so important.

Jeff Lenard:
And, and you can’t really carry around a jug looking for electrons to charge it back up. The beauty of what the Fuels Institute does with reports is it adds clarity to a market and it’s nonpartisan. It’s not biased. It is designed so we are as efficient with government money, everybody’s money as possible. Was there anything in this report that absolutely surprised you?

John Eichberger:
I expected the geographic distribution of electric vehicles to be more balanced by 2030. I did not expect 76% concentration in 15 states to still be the nature of the market. I was also surprised that we may be able to satisfy most of our charging needs with Level 2. When we started the Electric Vehicle Council a couple years ago, my mind was DC Fast Charger everywhere, Level 2 is a waste of time waste and resources. Nobody’s going to spend the time doing that. But I was thinking in a gasoline refuel model mindset and that’s not the mindset of an EV driver. An EV driver is there’s a charger, let me plug in. I have a plug-in hybrid. I only get 25 miles electric, but if I see a plug-in that I can use, I use it.
So we have to reset how we think about the way the driver is going to be thinking about their energy needs. They’re not going to let it go down to empty, and you may never even get it above 80% because once you get past 80% charge, the charge rate drops precipitously. Those were two things that surprised me. The gratifying that came out of this was there is a opportunity here to develop a strategy that serves the market well, that can be economically responsible. And if we focus on a needs based analysis and a needs based approach to market development, then everybody can win. It’s this mindset that we need chargers in every location and every state right now. That’s a failed strategy. And that’s going to create such a disincentive to investment that you’re going to have chargers sitting out there that are going to basically age out before a single vehicle comes by, or you’re going to have chargers in a market where you don’t have enough chargers because we diverted resources to a, a no EV market and the market that has a whole bunch of growth.
Mm-hmm, doesn’t have the resources to satisfy it. So we priorit what S and P did. They took that census track data and they analyze and prioritize states into one or four categories, high priority down to lower priority based upon how many EVs are they going to have in the next 10 years? How many EV chargers are they likely to have? What’s the housing complex, what’s the demand for chargers and let’s prioritize our investment to satisfy needs as it needs to develop. And so you don’t overinvest in a market that doesn’t need it and you don’t, underinvest in a market that absolutely needs it. We really just need to be that strategic about it. Um, so that was really what I hoped to get out of this. And I think we really did a good job. And I talked to a guy a couple days ago who says the prioritization and your study is very D for my prioritization.
I said, well, there’s no guarantees. There’s no exact science here. There’s no, this is the methodology that is 100% lock tight. Sure. It’s another data point to help us really think about how we go about this and use, you know, his prioritization, our prioritization, other to figure out what makes the most sense. Again, I can’t stress it enough. Nobody knows the future. No matter how much they wanna tell you, no matter how much they charge you for the research they do. They don’t know. They’re guessing they may be pretty good at guessing, but they’re guessing mm-hmm . And so you need to aggregate a whole bunch of guesses to figure out what might make sense.

Jeff Lenard:
John, where can people get more about this report and other information related to the Fuels Institute?

John Eichberger:
Our research is open to the public free of charge. You can download it at fuelsinstitute.org.

Jeff Lenard:
Thank you, John, and thanks for listening to Convenience Matters.

Outro:
Convenience Matters is brought to you by NACS and produced in partnership with Human Factor. For more information, visit convenience.org.

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