The risk and costs involved in transitioning a traditional forecourt site to electric vehicle (EV) charging may seem too great for some. But the benefits are multiple – and now there’s a less risky option on the table.
As the era of electric vehicles (EV) evolves in the UK, forecourt sites are becoming increasingly hot property, with both owners and retailers realising the huge potential they offer for future business development.
In a recent report in Forecourt Trader, real estate adviser Rapleys revealed that they were receiving up to 100 ‘buy’ calls for every one ‘sales’ call for petrol stations, as investors spot the chance to diversify their portfolios and realise value.
Meanwhile, with the government’s intention that, by 2035, 100% of the cars sold in the UK will be electric, incremental steps towards this target mean that 22% of all cars sold will be electric by this year, increasing to 80% by 2030. Indeed, the Society of Motor Manufacturers and Traders (SMMT) predicts that by 2025, fully electric vehicles will already account for just over a quarter (26%) of the car market.
For independent forecourt owners looking to develop their offer to include EV charging, the time to do so has rarely been better, and there are plenty of offers coming onto the table for consideration. Forecourts are varied in nature, with some in high population areas increasingly competing with convenience stores to become community hubs, while others – on the motorway or main artery roads – are providing stop-off locations, with dwell times increasing as EV owners wait for their vehicles to charge.
As a result, no forecourt owner can afford to rest on their laurels when it comes to looking at ways of evolving their sites to include EV charging.
That said, it’s clear the switch over to EV comes at a cost and could prove to be a substantial risk if the forecourt operator gets the balance wrong. “It’s a big commitment and a risk to change, given the costs associated with the remediation of a site,” agrees Tom Hurst, UK Country Manager for charging hub operator Fastned, who believes that this is where his company can make the difference.
Covering the costs of remediation
Fastned is looking to lease petrol forecourts for EV charging and, with its Clean Start programme, is offering up to £250,000 in remediation costs. The company runs ultra-rapid EV charging stations across Europe, with 23 operational sites and 122 chargers already in place in the UK, and two more locations to open just this month. Using its Clean Start offer as an incentive, Fastned expects to sign-up further to build on its growing coverage right across the UK.
One clear disincentive for traditional forecourt operators to move over to EV charging is the need to decommission underground fuel tanks and remediate polluted soil, and the costs involved in doing so. Fastned’s Clean Start offer aims to take away that concern and transform their petrol pumps into a Fastned charging station, presenting the forecourt operator with the potential for a tenanted rental income for the forecourt EV charging operation. This will allow them to focus on other site concerns, such as retailing.
“We are offering the chance to take away the risk,” says Hurst. “We fund the grid connection and manage the plans for reconstruction and rebuild, all while the retail at the site is still operating.
“We’re used to dealing with different locations. With some older sites, it’s a full rebuild, for other more modern filling stations, we’re operating within the existing dimensions.”
Site partners can control how large the transformation will be, with the offer ranging from a total makeover that includes Fastned’s solar-powered canopy, or simply replacing the fuel pumps with chargers and rebranding the existing canopy after remediating the soil. Modular station designs range from a drive-through station, to a parking station or a space-efficient urban station.
Of course, apart from any other incentive, forecourt operators who take up the opportunity to transition to EV charging are clearly sending a message to consumers about their willingness to contribute to the UK’s vision of seriously reducing carbon emissions and creating a cleaner, greener environment – a vision increasingly embraced by the younger generation, in particular.
Limited grid network opportunity
While Hurst is only too aware that there is a certain reluctance from some operators to move across to EV charging, given the uncertainty and risks involved, he warns that it’s important to get a foot in the door early, particularly given the increased competition for the grid network from domestic, commercial and industrial usage.
“There’s lots of non-forecourt competition out there,” he says. “While billions of pounds are being invested in the grid to upgrade it, if you don’t get in early, you might have to wait to be able to access the grid to the extent you want – it’s a first come, first served situation.”
Having presented its Clean Start opportunity at the Forecourt Trader Summit earlier this year, Hurst reveals that some forecourt operators are putting EV charging on the back burner, believing that it will be easy to ‘electrify later’. “But that’s not a safe strategy,” he says. “You have to be in it to win it.”
Fastned’s Clean Start offer has a limited time frame and interested parties will need to sign up to an agreement with the company by the end of this year. The offer also comes with stringent criteria and requires locations with strong network development potential.
So, among the multiple benefits that Fastned’s Clean Start offer brings, what does he believe are the three prime advantages?
“First, is the chance to partner with the top-rated charging network in the country,” he says. “We’re the most experienced in ultra-rapid charging, as we’ve been doing it since 2012 in the Netherlands, opening our first hub in the UK in 2019 . We can offer an established partnership which is not in conflict with other aspects of the forecourt operator’s business.
“Secondly, the investment we make means we are a partner, but also a tenant. So, the investment we put in will live beyond the lease, if the client decides not to continue to work with us once the tenancy is up. They will have an asset that enables mobility-based retail for the long-term.
“Finally, we want to focus on what we do best, allowing forecourt partners to reinvest in their own retail offering, revamping and adding value to their food and beverage offer, for example.”
Despite some negative media headlines, both consumers and industry are increasingly encouraged to fully embrace the shift to electric cars, and Hurst says electric charging for light vehicles is here to stay. While heavier goods vehicles may still end up using different forms of fuel, such as hydrogen, the growth in electric cars will continue to soar and the window of opportunity to really seize all the benefits associated with electric charging is narrowing.
To find out more about Fastned’s Clean Start offer, go to https://www.fastnedcharging.com/en-gb/go-electric/clean-start
