- December 1, 2019: Vol. 6, Number 11

5 Questions: Electric vehicles and the end of gasoline stations

by Mark Dunec

There has been much speculation about the way electric and autonomous vehicles will change urban planning and reshape city real estate markets. Mark Dunec, a managing director in the real estate solutions practice at FTI Consulting, argues that electric vehicles will inevitably bring about the end of gasoline stations and change the financials of those pieces of real estate as property holders seek to repurpose them.


Electric and autonomous vehicles are expected to reshape transportation infrastructure. One of the property types you argue will be affected are gasoline stations. Explain.

As the auto industry moves toward electric vehicles and as the technology for batteries accelerates and makes the product smaller, better and cheaper for the masses — like cell phones — gas stations will become obsolete. There will be a domino effect as the underlying real property values plummet. Property owners will be faced with environmental cleanups and challenges to reposition their properties, while municipalities will be faced with property tax appeals and state governments will need alternative sources of revenue to fund transportation infrastructure, such as roads and bridges, as the gas tax diminishes.

Would gas stations simply not be converted to EV charging stations?

How long would a driver wait to re-charge their car at a reconfigured gas station? An electric vehicle can take an hour to more than 12 hours to charge the car. It all depends on the size of the battery and the speed of the charging point. A typical electric car (60kWh battery) takes almost eight hours to charge from empty-to-full with a 7kW charging point. Furthermore, office and shopping mall landlords, as well as hotels are already offering charging stations as free amenities to their tenants and their customer base. One can even find charging stations in parking garages.  Given this growing access to charging stations everywhere, there is little need for consumers to make a special stop to charge their car batteries at a former gas station.

If not as EV charging stations, what are some of the ways gas station real estate will likely be repurposed?

That is the problem property owners will face; they will have to figure out what is the most probable use of a property that is physically possible, appropriately justified, legally permissible, financially feasible, and results in the highest value of the property. Property owners will need to assess the cost of environmental cleanup, have discussions with municipal planning and zoning boards, and be prepared to engage activist neighbors. Convenience stores? Of the approximately 168,000 gas stations in the United States less than 40 percent, or 66,000 gas stations, also have convenience store businesses. Fuel sales account for more than 60 percent of total sales, which means that consumers are primarily purchasing gas for their cars and not convenience goods such as coffee, cigarettes and food. Real estate is all about location. Repurposing depends on so many factors, such as urban versus suburban; primary/secondary streets versus highway locations. What are the current uses of the adjacent properties? Most importantly, the success of the repositioning will depend on the creativity of the developer. For example, in Millburn, N.J., an obsolete gas station was recently repositioned into a mixed-use property with ground-floor retail and market, and affordable housing units on top.

Who owns the land under gas stations now, and how might that ownership change in the future?

Big oil companies only own about 3 percent of all gas stations and convenience stores in the United States. The rest are owned by independent, licensed retailers who make their livelihood from selling fuel and convenience goods. As demand for electric vehicles increases, demand for fuel will decrease, which will lead to an uptick in land acquisitions by local developers. A vast majority of current owner/users do not have the entitlement and construction expertise to reposition the real estate.

Mass use of EVs still appears a long way off. What is the impact timeline in your estimation?

Not that far off as you may think. By 2025, it is estimated that there will be over 40 million electric vehicles sold by automakers, and by 2030 there will be about 30 million electric vehicles on U.S. roads. Amazon recently ordered 100,000 electric delivery vans, and today, about 17 percent of the world’s buses are electric. California has even mandated that by 2029 all buses purchased by its mass transit agencies be zero-emission. Gas stations have been declining for decades — in the mid-90s there were more than 220,000 gas stations and by 2019 over 50,000 had closed, a 23 percent decline. This decline is attributed to other factors that have nothing to do with the economic vitality of operating a gas station. However, as demand for fuel continues to decline as electric vehicles are sold to the masses, I am anticipating more than 50 percent of gas stations to close by 2030, and by 2040 the gas station concept will only be found in textbooks next to the payphone.

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