Electric Vehicle Charging: A Slippery Road Ahead for Gas Station Operators

The exponential sales growth of full electric or plug-in hybrid vehicles, though from a relatively small base, is necessitating rapid growth in fast and reliable Electric Vehicle (EV) charging infrastructure and is consequently compelling gas station operators globally to adapt and future-proof their retail business.

Key Highlights
-- The substantial growth in annual EV sales is forcing a major transition among gas station operators
-- Development of EV charging infrastructure will require material capital investments
-- Alternative EV charging options represent a significant new competitive threat, especially in urban areas
-- The stock of internal combustion engines (ICEs) will remain significant for years, and therefore gas station operators will have some time to implement business model and infrastructure changes
-- Despite significant changes expected, we do not expect material deterioration in credit risk profiles, as a result of this transitioning, at least over the more near-to-medium term.

“We believe that gas station operators would need to gradually evolve and address challenges around intensifying competition, infrastructure concerns as well as other changes to business model, in order to remain competitive,” said Vikas Munjal, Vice President, Diversified Industries, DBRS Morningstar.