4 ms·

Gas stations in the US are already built today to be low margin "loss leaders" (or nearly so) for convenience stores and supermarkets. Low margin can imply a hi

Gas stations in the US are already built today to be low margin "loss leaders" (or nearly so) for convenience stores and supermarkets. Low margin can imply a high price sensitivity (as prices rise, they don't stay in business). There are possible snow ball effect scenarios where gas pumps could start to disappear much more rapidly once some tipping point occurs. Back to the other topic, having owned a PHEV for more than a decade now, it's such an obvious compromise that doesn't make a lot of sense long term. It made great sense when I bought the car more than a decade ago, but today the weight carrying around a gas engine and gas tank would be so much better put to use on extra battery range rather than a gas engine you need a lot less often than you think you do. The only person I'd recommend a PHEV to is whoever I sell my current car to when there's a full BEV I want to buy. But I've also had years where I've gotten the "use it before stale" warnings where my only use of gas that year was because I had no other use for gas and my car suggests keeping the age of gas below a year old, and I recognize there are still a lot of anecdotal use cases of extreme daily/weekly/monthly mileage in the US that I cannot speak to.

kevin_thibedeau 1y ago
US gasoline is cheaper today than it was 20 years ago after correcting for inflation. They seem to be making do with less real profit than in the past.
bluGill 1y ago
Gas is low margin high volume and so a third of the profits anyway. The stuff inside is high margin but they don't sell as much so it balances out.
- WorldMaker 1y ago
  Right, but that's still the point: gas stations have mostly already stopped existing that don't have a nearby high margin draw. At least in my part of the US most gas stations are "clubs" designed to further encourage regular spending on high margin stuff. (Grocery rewards points, car wash memberships, things like that.) EVs will disrupt that "high volume" part of it. How long will the "clubs" keep the expensive equipment maintained and running as volume shifts? What price point is too low margin? What price point is too high that volume further drops? (How likely is that to spiral?) It's not entirely just theoretical, the 1970s showed things happen to gas stations quickly when prices change. We've already seen the death of the "non-club" gas station accelerate in the last three decades, even as the "clubs" build more than ever, further out from city cores, further out into the suburbs and the exurbs. The urban gas station is disappearing/has been disappearing for decades. Gas stations are no longer a foundational part of the urban experience, they are moving out to the edges. As demand changes from EVs, I expect things to get weird and possibly quickly, because the economics model of gas has always been weird but has been put up with because it is high volume enough. When the high volume is disrupted, what do you expect happens?

kevin_thibedeau 1y ago

US gasoline is cheaper today than it was 20 years ago after correcting for inflation. They seem to be making do with less real profit than in the past.

bluGill 1y ago

Gas is low margin high volume and so a third of the profits anyway. The stuff inside is high margin but they don't sell as much so it balances out.

WorldMaker 1y ago
Right, but that's still the point: gas stations have mostly already stopped existing that don't have a nearby high margin draw. At least in my part of the US most gas stations are "clubs" designed to further encourage regular spending on high margin stuff. (Grocery rewards points, car wash memberships, things like that.) EVs will disrupt that "high volume" part of it. How long will the "clubs" keep the expensive equipment maintained and running as volume shifts? What price point is too low margin? What price point is too high that volume further drops? (How likely is that to spiral?) It's not entirely just theoretical, the 1970s showed things happen to gas stations quickly when prices change. We've already seen the death of the "non-club" gas station accelerate in the last three decades, even as the "clubs" build more than ever, further out from city cores, further out into the suburbs and the exurbs. The urban gas station is disappearing/has been disappearing for decades. Gas stations are no longer a foundational part of the urban experience, they are moving out to the edges. As demand changes from EVs, I expect things to get weird and possibly quickly, because the economics model of gas has always been weird but has been put up with because it is high volume enough. When the high volume is disrupted, what do you expect happens?