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News & Views

Musings about EV’s, Blue Rhinos and an elusive retail goldmine.

Updated: Mar 18

A few years ago, we helped a disenchanted Air Force veteran with a strategic blue-state

evacuation, by liquidating his Illinois truck stop. On the day of closing, he was about as

happy as the birth of his first child, knowing that he and his crew were moving to an oft

dreamed-about red-state nirvana.


His Tesla charging area, with its eight to ten idle charging stations, helped verify my

notions on EV’s long term prospects, given its current approach. I’ll not belabor all the

limitations, from charging infrastructure to motorist demand, or the incessant regulatory

pressure fueled by the illogical green movement intent on forcing this down our throats.

The result is a race to pepper the country with charging stations, in anticipation of a

wave of EV use that may never materialize. I’m sure that the early adopter retailers

know that they are making the investment more for image than any realistic profit

expectation.


Don’t get me wrong, I don’t hate the notion of EV’s, just the way we, as a country, have

been embracing them. Yet there currently exists a much better approach that could be

extremely lucrative for petroleum retailers, if we were to throw out much of what has

already been done and refocus the effort.


I really wish that what I’m about to share involved the Japanese, because I like them

better than the Chinese. But the Chinese were the ones to come up with this EV

technology, so I’m compelled to endorse something positive and unique that they have

going. Besides their commitment to dumping fentanyl and military-aged young men into

our country through Mexico, recent news reports indicate that they are also intent on

flooding the country with EV’s. Now these aren’t your run of the mill government-foisted

boondoggle EV’s with no meaningful profit potential for petroleum retailers. They have

the potential of being a very lucrative money making proposition for our retail industry.

Two Chinese EV car brands, Nio and Geely, have developed vehicles that enable their

spent batteries to be swapped out for fully charged ones in three to five minutes. Think

about the business applications for cars that can be recharged in the same amount of

time it takes to fill up a gas tank. Motorists will no longer have to kill time waiting

somewhere in the middle of nowhere while their car charges, in the hopes that they can

get to their ultimate destination while they are still young. Even better, there is no need

for government incentivized charging stations or the unprofitable investments it takes to

join the EV charging bandwagon.





If the concept of “swap-out’ batteries is universally embraced, the retail profit potential

would be enormous. Imagine the Blue Rhino propane tank exchange concept and

apply it to EV batteries, but with a much higher profit potential. With the time-to-

recharge hurtle largely overcome, EV’s would become much more desirable and

prevalent, making universal retailer adoption of a swap-out program a no-brainer.


Depending upon size and sophistication, participating retailers would have two distinct

revenue opportunities: offering drop-off/swap-out batteries like a propane exchange

program or on-site charging where the retailer manages a greater degree of the

process, swapping-out batteries as part of a battery franchise network.

The crazy thing is that this is not some futuristic pie-in -the-sky concept. The swap-out

battery technology currently exists. Despite its infinite logic, its potential may

unfortunately be unattainable, as the technology resides with the wrong country; the

current impetus of building charging stations may be unstoppable, given the high sunk

costs; and the auto manufacturers vested interest in this approach may be too far gone

to compel anyone to alter this expensive and misguided course. Quite a testament to

why government should never be involved with economic influence.


Despite all these limitations, the swap-out EV approach should be explored further

given the many positive aspects, including the potential for high retail participation and

profit benefits. Maybe a licensing agreement or JV with the Chinese car companies to

explore all the possible angles for a redirection of the current approach. A

comprehensive battery swap-out initiative is probably the only way to compel enough

motorists to embrace EV’s to maintain the relevance of the industry into the future.

 

Mark Radosevich is a 43 year petro-veteran and recognized industry advocate. He is president of PetroActive Real Estate Services, LLC, offering confidential mergers & acquisition representation and financing services exclusively to petroleum wholesalers. He can be reached by email at mark@petroactive.net and by phone at 423-442-1327.


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