For several years now, Norway has been leading the world in electric vehicle (EV) development and charging. In the August 2023 issue of NACS Magazine, I talked about the drivers behind why Norway is leading the charge and how European retailers are tackling the rapid consumer adoption of electric vehicles (see “EV Observations From Norway”). That’s great for Norway, but you may be asking: How relevant is this for my business in the United States?

The Current Situation

As of June 2024, here’s how the situation in Norway stands:

• 85% of all new passenger cars sold are pure electric.
• On a national basis, nearly 30% of the passenger cars on the road are pure electric, and almost 40% around the biggest cities.
• Many of the advantages for EV owners that the government originally introduced to boost the adoption of EVs have been taken away. The bus and taxi lanes that EVs could use have gradually been closed, and road tolls are no longer free, though are still cheaper than for other cars.
• Almost 80% of all charging still takes place at home, with 10% at work and the last 10% is shared between utility owned charging companies, parking garages, gas stations and other retail and fast-food chains.

Norway is a Unique Case

The development in Norway has been and will be unique and is likely not representative for the development in most other countries. That’s partly because of the common political goal that all new cars in 2025 be pure electric, partly because of the unique incentives that the government put in place and partly because of the many initiatives to build charging networks. However, it should also be mentioned that this development started before the bigger and more exciting car models came on the market around five years ago and made the EV a family car, not just a car that was used to commute. In markets where EV development started later, these improved models have been one of the key reasons to own an EV.

The development in Norway has been and will be unique and is likely not representative for the development in most other countries.

The Hard Lessons

Even though Norway is a distinct example, some basic learnings will, to a degree, be relevant for most markets:

• For the gas station industry as a whole, income from charging will not compensate for the loss of income from gas sales. Initially margins for charging may be high, but as competition increases these margins will also come under pressure.
• Home charging will be a substantial threat to the gas station business, but not to the same degree as in Norway, where 80% of charging takes place at home. Other players such as parking garages, Tesla Supercharger parks, grocery stores and fast-food chains will be a strong competitor of gas stations in the future.
• Flash chargers and fast chargers are now the norm. Even though charging has become faster, cars have also become bigger and have a higher battery capacity, so charging still takes time.
• Tomorrow’s winners in the charging game will be those who can provide the customer with a meaningful way to spend the time it takes to charge, usually 20 to 40 minutes.
• To be a winner you also need to have enough chargers and chargers that are fast enough. The key problem for EV owners is finding chargers during peak periods, especially public holidays. The customer needs to be confident that there are chargers available and that they work. Simple payment solutions, visible prices, canopies, etc. are also important.
• EV customers plan in a different way than fuel customers. They charge when they can and try to avoid postponing the charging until they have to. They tend to top up when possible, rather than charging up to 100% battery capacity.
• Charging or topping up the car may not be the reason customers visit your site. It may instead be something that the EV owners do while they get their lunch, do their shopping or stop the car to go through their emails. A food offer may be the key reason to choose your site, but without providing an opportunity to charge, customers will find another place to eat. The conversion rate of shopping to charging may be higher than the traditional conversion rate from pump to store.
• The role of the convenience store will become even more important, as will the attractiveness of the whole site. The more reasons the customer has to visit the site, the more attractive it will be.
• There seem to be some clear characteristics of successful charging locations that stores can implement:
• Locations along highways that provide a good convenience offer and provide the EV traveler the opportunity to top up to get to where they are going.

The more reasons the customer has to visit the site, the more attractive it will be.

• For people who work from their cars (salespeople, tradesmen, etc.), sites where they can charge while they eat, shop or perform other tasks will be an essential service in the future.
• Neighborhoods where the possibility to charge at home are scarce will also be good locations, albeit locations that are not so dependent on the food offer.
• Unfortunately, this also means that many locations that are good as gas locations today in Norway will lose their relevance in the future. Even with the high EV penetration in Norway, few gas stations have been closed so far. Although some of the players aim to be “the last man standing,” there is little doubt that many sites will be closed in the years to come. This may be unfortunate for smaller communities that rely on having one or two gas stations.
• Which stations will close will also depend on the alternative values of each site. The current players, when reviewing their portfolio of locations, may be quite surprised by the alternative value of some of their locations.

Tomorrow’s EV Hub

Some years ago, I visited the EG Group in England. At the time, they had had great success rebuilding older gas station sites. When asked what their key strategy was, the CEO said: “We just add stickiness to the places.” In other words, it increased the number of reasons to visit by adding new services such as pharmacies, grocery stores, more exciting fast-food outlets and more. The concept of adding stickiness is also definitely relevant for the energy stations of the future.

In Norway, gas station chains are trying out new formats, especially along highways where people have to rest and top off to get to their destination.

Recently, Insight Research and Vontier launched a competition for “the Best EV Hub in the World 2024.” The winner was Able, a hub outside Mandal in southern Norway. The main operator of the site is DCC through its subsidiary Certas Norway AS, which is also the owner and operator of all Esso forecourts in Norway.

“We need to have an offer at the locations that is so attractive that it will work even without gas or charging.”

The site opened in March 2023 along a new stretch of highway in an area where many Norwegians spend their summer holidays. The size of the location is approximately 110,000 square feet. The EV chargers are placed in the center of the site, and are covered by a canopy with the gas and diesel pumps a little further away from the other services. The commercial and passenger vehicle flows have also been separated. Among the services, there is a big Deli de Luca convenience store, a McDonald’s restaurant with a McCafé, a fully automated carwash, outdoor seating, free Wi-Fi, good restroom facilities, a playground for kids and a dog walking area.

Practical Upgrades

The newer and bigger sites are, of course, interesting and exciting. However, the way retailers have updated their current locations may offer even more relevant examples for others to emulate. The key upgrades have been:

• To provide more eating inside and outside to make spending time in the store more attractive. 
• To sharpen the food offer.
• To actively use the chains’ loyalty system to drive customer traffic.
• To provide new and reliable charging ports on the premises, in addition to replacing old pumps with chargers whenever feasible.
• Retailers building their own charging network instead of having utility owned charging companies as the provider of charging services at the station.

When discussing the survival of gas stations in an EV environment at a recent NACS event, an attendee made the following comment: “We need to have an offer at the locations that is so attractive that it will work even without gas or charging.” Quite an ambition, but a solid goal for the future development of the sites that form the key assets of most retailers.