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New service station concepts in the UK: How electric vehicles are influencing the way service stations attract customers

New service station concepts in the UK: How electric vehicles are influencing the way service stations attract customers

Summary

When taking into account that internal combustion engines vehicles sales will be banned in the UK by 2040, the question of what will the multimillion-dollar industry of fuel retail do, springs to mind. This case study examines the how the concept of service stations is changing to take advantage of new opportunities and build a business model that will survive the decrease in fuel retail.Key Highlights

  • By 2030, sales of internal combustion engines will drop by 50% and in 2040, sales of such cars will be banned in the UK
  • Large fuel retail companies are investing heavily to diversify their revenue streams. BP recently acquired the largest EV charging network in the UK, Chargemaster
  • Most companies are increasing their offers at forecourts with a wide variety of stores to appeal to new customers, not only to motorists.
  • Scope
    • Examines the business model of service stations
    • Analyzes the future threats to this model
    • Identifies opportunities in the market
    • Explores how the market leaders are tackling the issue of increasing electric vehicle parc
    • Looks into the future of the service stations business model
    Reasons to buy
    • What will happen with service stations in the run up to and after 2040?
    • How are companies adapting to the growing Electric Vehicle market?
    • What other opportunities can fuel companies exploit to profit?
    • How will service stations appeal to EV motorists?


    Overview
    Catalyst
    Summary
    Refueling process is different from EV charging process
    EV charging is more time-consuming and demands different services while customers wait for their car to be charged
    Service stations are centered on the need to fuel at a precise geographic location
    Problems of the current service station model
    Fuel is the primary demand of motorists
    Non-fuel products may lack appeal to consumers not buying fuel
    Drop in total fuel sales value and convenience stores as an alternative source of revenue
    New service station that appeals to a wide range of customers and not only motorists
    Service stations need to keep customers entertained and comfortable while they wait
    Fuel Companies Invest in EV Chargers and Convenience Stores as road to zero approaches
    The Road to Zero is approaching
    EV parc is growing and will grow to represent a larger portion in the future
    Convenience sales are growing as a way to diversify from fuel revenue and as a way to attract customers
    Conclusions
    Location of service stations is critical
    Ubiquity of EV chargers gives them an advantage over fuel
    Growing participation of stores at service stations
    Service station of the future will have even greater focus on stores
    Appendix
    Sources
    Further Reading
    Ask the analyst
    About MarketLine
    Disclaimer
    List of Tabels
    Table 1: EV charging time and range by charger and power 7
    Table 2: UK ban deadlines by vehicle type 14
    List of Figures
    Figure 1: EV charging points 6
    Figure 2: EV vs fuel charging 7
    Figure 3: Total fuel sales value in the UK (£m) 10
    Figure 4: Distribution of service stations sales in UK 11
    Figure 5: Proportion of number total sites to sites with shops 12
    Figure 6: Artist’s impression of the service station of the future 13
    Figure 7: Electric vehicle parc in the UK 15
    Figure 8: Total convenience stores at service stations sales value (£m) 16
    Figure 9: Total convenience stores at service stations sales value projection (£m) 16

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