Case Study

Are EVs a threat to gas stations' fuel retail expansion plans?

What's a bigger threat to fuel retail expansion in North America: electric cars or rising fuel efficiency?


The challenge

The Board of Directors for a growing North American fuel retailer was tasked with expanding the company's footprint into new markets. The Board was concerned that the company's primary business, selling gasoline and diesel through retail channels, may have an emerging threat to demand: electric vehicles. Amid a  long-term strategy refresh, our client sought to discover the impact of alternative fuel vehicles on the company's core business.

Our approach

Wood Mackenzie developed a state- and province-level gasoline and diesel demand model based on our Products Market Service methodology. Our granular work measured the impact of EVs and other fuel efficiency factors on each state or province across the US and Canada through the development of two brand-new custom models.

The three-month engagement yielded an exclusive gasoline demand and EV forecast. As the client focused on expansion in the Midwest, we were able to benchmark regional demand impacts for gasoline suppliers.


Introducing Wood Mackenzie's Electric Vehicle Service

Go beyond forecasts

The result

Our analysis led us to conclude that EVs were not the primary threat to gasoline demand in the company's region of interest. This conclusion was contrary to the belief held by the company's board members, who feared EVs were imminently destroying gasoline demand equally throughout the US and Canada.

We presented to the company's Board of Directors, explaining that prior federal CAFE standards regulating fuel efficiency are driving demand destruction more than EV market saturation.

Contrary to what our client believed about gasoline demand destruction coming from EVs, the main threat is consumers replacing old cars that had lower fuel efficiency.

Our work helped to shape the company's long-term strategy. The company has since expanded its regional footprint thanks to our recommendation.

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