The current price of gasoline is creating intense sticker shock for many Americans who experienced all-time low fuel prices during the COVID pandemic. Between the growing demand for fuel and heated political relations in the European fuel market, the national average for a gallon of gas rose to $4.67 as of June 1, 2022. These issues lead many people to wonder if increasing gas prices will lead to greater electronic vehicle (EV) sales?
At least in the near future, the answer to this question is probably not. While the world is headed toward using more alternative fuels such as electricity and hydrogen gas, neither of these solutions is forecasted to make a significant leap in 2022.
Three reasons increasing gas prices likely won’t equate to more EV cars in 2022:
- Affordability. The average sticker price of a new electric vehicle in 2021 was about $10,000 more than the industry average. A Chevy Bolt runs about $15,000 more than an equivalent gas-powered vehicle. True, federal and state incentives will bring the cost down, but as Americans are dealing with rapid inflation in all aspects of life, few have the means to afford to purchase an EV right now.
- Availability. We’re continuing to deal with product scarcity for many items, and technology is one of them. It’s difficult for car manufacturers to source all the parts they need, including computer chips and rare minerals for the batteries. An EV requires about twice as many computer chips as a conventional gas-powered vehicle. As a result, Ford and Volkswagen already reported they have sold out of their most popular EV models for 2022.
- Infrastructure. One concern potential buyers have about EVs is where they will be able to recharge them. Yes, owners can easily recharge EVs using their home’s electricity, but it’s a bit more complicated when they travel out of town. Federal programs such as the “West Coast Electric Highway” provides funding to add charging stations along the popular Interstate 5 from Canada to Mexico. Businesses are adding charging stations to entice people into their stores and restaurants while they wait. Still, many people are uncertain where to find a charging station outside their home area.
What does this mean for gas station and convenience store owners?
While the immediate fear of a shift from gasoline to electric or hydrogen-powered vehicles isn’t extreme, it is one that business owners should begin preparing for. We are likely to see more consumers moving to these alternative fuels, and those stations that are ready with new product offerings will capture their business out the gate.
At GP Energy, we work with businesses in the fueling industry to help them forecast and prepare for consumer shifts just like this. Our team members will work closely with you to develop business plans to sustain your company in the future. Contact our experts at GP Energy to help analyze your business and introduce you to strategies to increase your revenues and profitability.
We can help you search for the right location, select between branded or unbranded fuel, build your business brand, diversify your product line, select ancillary services to boost your bottom line, and so much more. By partnering with GP Energy, we can help your business unlock its potential with new opportunities and achieve unimaginable success. Contact us today to get started.