With 867 electric vehicles (EVs) registered in South Africa, and with this figure likely to increase in the near future, fuel retailers can no longer ignore the imminent need to invest in battery electric vehicle charging infrastructure, says First National Bank (FNB) fuel brand specialist Ronél Fester.

While South Africa still lags behind in the adoption of EVs compared to its global counterparts, progress is being made with major motor manufacturing brands continuing to introduce EV models into the country. 
 
According to the Bloomberg NEF Electric Vehicle Outlook 2019 report, more than 2-million electric vehicles were sold in 2018 globally.

Expectations are that annual passenger EV sales will rise to 10-million units in 2025, 28-million in 2030 and 56-million units by 2040.

Essentially, the report states that by 2040, 57% of all vehicle sales and more than 30% of the global passenger vehicle fleet will be electric.
 
“It doesn’t take a rocket scientist to conclude that a fraction of these products … may find their way to South Africa,” says Fester.

“The question is – how can the fuel service station sector take advantage of this development?”
 
Currently, there are relatively few EV charging stations across the country. They can be found at strategic public locations, select motor dealers, shopping centres, office blocks, urban areas and next to major highways.
 
In stark contrast to this, there is only one major fuel service station brand in South Africa currently rolling out its first EV charging stations.
 
For a long time, service stations have been among the few business sectors in South Africa that have been able to withstand the current tough economic conditions, says Fester.

However, as the world moves towards a low carbon future and the automotive industry evolves, South African fuel service stations should consider amending their business models to avoid being left behind, she notes.

“The growth of the EV market should not be seen as a threat, but an opportunity for fuel service stations to sustain their businesses while diversifying revenue streams.
 
“One of the biggest challenges fuel service stations will face is increased competition with consumers no longer exclusively relying on them to keep their cars on the road. Therefore, investing in EV charging infrastructure becomes imperative for these businesses,” says Fester.

“The immediate benefit is that EV points take up to 30 minutes to completely charge a vehicle, meaning that customers will spend more time at service stations, with a potential to spend more money.”
 
The rise of EVs is likely to disrupt an essential part of the current fuel retailer model, which capitalises on providing quick service and convenient products and services while consumers refuel their cars.

Strategies will gradually have to focus on improving the service station ecosystem to include more partners and brands to satisfy various consumer needs and experiences – from socialising, shopping to meetings and so forth, says Fester.
 
“Coupled with EV infrastructure development, the buildings and designs of fuel service stations may need to be upgraded to include more facilities like bigger rest rooms, Wi-Fi and larger parking [areas].
 
“As fuel prices continue to increase, coupled with shrinking consumer disposable income, EVs will gradually become more relevant in South Africa as they typically consume less energy per kilometre and are more affordable in the long-term,” she adds.

“In my view,  this provides a compelling business case for South African fuel service stations to start investing in EV charging infrastructure.”