Refuelling industry looks to Norway for answers on how to evolve
Archie Hall in London
Electric cars in Norway. Almost one in five cars in Bergen are now electric © Alamy
Perched between Norway’s two longest fjords, Bergen might appear an unlikely place to glimpse the possible future of transport. But close to one in five cars in Norway’s second city are now fully electric — the most of any city, anywhere.
As Bergen’s residents steer their Nissan Leafs and Teslas down the city’s cobbled streets, they, alongside compatriots across Norway, are also being scrutinised by companies eager to adapt to the era of the electric car.
“Over the last year or so there have been more and more visits from other parts of the world,” said Christina Bu, secretary-general of the Norwegian Electric Vehicle Association. “Companies are coming to Norway to learn.”
Few are looking more closely than the multinationals that run petrol stations, which are grappling with a pressing question: will the electric car mean the end of the road for roadside refuellers?
After buying Norway’s largest petrol station network in 2012, Canadian refuelling giant Alimentation Couche-Tard designated Norway its “laboratory” to study that precise question.
Norway’s government wants to end sales of fossil fuel-powered cars by 2025 and has waived its heavy taxes on new car purchases for electric vehicles. Internationally, Bloomberg New Energy Finance estimates that 57 per cent of cars sold in 2040 will be electric. Norway crossed that threshold in March.
Couche-Tard has replaced fuel pumps with electric vehicle chargers in some of its Circle K gas stations in Scandinavia and launched a home and workplace charging service in Norway.
British consultancy Insight Research also offers fuel retailers what it calls Norwegian “retail safaris” where they can pay to tour petrol station sites across Oslo.
A Boston Consulting Group study published last year found that at least a quarter of petrol stations worldwide risk closure by 2035 without significant changes to their business models. Under BCG’s most aggressive scenario, 80 per cent could shut.
Ms Bu described BCG’s projections as “a bit exaggerated”. Nevertheless, she said she had seen plans for new Norwegian petrol station developments quietly killed off or scaled back as the pace of her nation’s transition to electric vehicles had accelerated.
“Maybe . . . ,” said John Eichberger, director of the US-based Fuels Institute, an industry research group, to BCG’s findings. But he added: “You’re looking at a liquid fuel demand market that’s going to extend to the 2060s and 2070s at a minimum.”
In most countries, Norway’s vision is a way off. Electric vehicles constitute 2.5 per cent of new car sales in America and 3.4 per cent in the UK. Cars are only occasionally replaced — the average American car is 11.8 years old, according to IHS Markit.
But the electric vehicle industry is bullish. Erik Fairbairn, chief executive of Britain’s Pod Point, which sells electric vehicle chargers, estimates that 95 per cent of new UK cars will be electric by 2030. He argues that rapidly falling battery prices will make electric cars substantially cheaper than internal combustion alternatives, even without Norway-style government intervention.
“[It’s] a phase of vehicles which is going to look like Blockbuster versus Netflix . . . they don’t coexist for any material amount of time,” he said, referring to the speed with which Netflix dispatched its erstwhile brick-and-mortar video rental rival.
Only petrol stations by motorways or shopping centres stood any chance, he added.
Those affiliated with the refuelling industry disagree. “We’re too early in the curve,” said Mr Eichberger. “The multiples being paid for acquiring an existing convenience store are extremely high.”
“I was with bankers last week, and they were saying that they have got confidence in the sector for at least the next 10 or 15 years,” said Brian Madderson, chairman of the UK’s Petrol Retailers’ Association.
Most petrol stations’ profit comes from selling food, drink and tobacco, not fuel. Only 38 per cent of profit dollars from American petrol stations came from fuel sales, according to the National Association of Convenience Stores, a US industry group.
Couche-Tard has already thought up future uses for its petrol stations, ranging from operating as a parcel depot to running a car wash and on-site auto repairs.
“With electrical mobility, a whole range of new business models arises,” said Hakon Stiksrud, senior director of e-mobility for Couche-Tard’s Circle K petrol station business in Europe.
But without the need to refuel, electric vehicle owners rarely need to visit forecourts, even to pick up an Amazon delivery.
In Norway, while charging outlets are increasingly available at petrol stations, the majority of electric vehicle owners use them only monthly, according to the Norwegian Electric Vehicle Association. Day-to-day, most charge at home or at work.
“The business case is difficult, you only use them when you go on longer trips,” said Ms Bu.
The Issa brothers, Mohsin and Zuber, co-founders of Blackburn-based European refuelling conglomerate Euro Garages, were more optimistic. “It’s the smaller sites who don’t have food, who don’t have the good coffee and [a] convenience programme that will end up struggling,” said Mohsin.
Zuber added: “People stop for a comfort break rather than a fuel break . . . More than 60 per cent of people stop for a comfort break. And on the motorways, it’s more like 80 per cent to 85 per cent.”
As goes Bergen, so goes the world? Even Couche-Tard’s Mr Stiksrud thinks that is a possibility. “Norway could be an example of how the development will be [across] the rest of the world,” he said.
“But it’s not easy to say when.”
Additional reporting by Andy Bounds in Blackburn
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