What’s the future of gas sales in the U.S.?
If you’re thinking about buying new gas pumps or financing improvements to your site, you may be wondering what the outlook for gasoline consumption in the U.S. is. PEI (link to PEI.org) President Rick Long shares his perspective on the outlook for electric vehicles, ride sharing and car sharing in this editorial from PEI’s TulsaLetter.
In conversations with PEI members during the past few months, questions about electric vehicles (EVs), car-sharing and ride-sharing services continue to crop up. Part of the interest is just natural curiosity because these new transportation options are garnering so much media attention. But PEI members also are wondering what sort of impact each will have on the liquid fuel and fluid handling equipment industry.
In the near term, at least, the answer is “not much.”
Electric Vehicles. At first blush, EVs would seem to constitute the biggest threat. After all, each EV sold represents one less internal combustion-powered vehicle on the road. True enough, but the most recent projections from the Fuels Institute are that, at best, EV sales might account for 4.84 percent of all vehicle sales by 2025. And at that rate, EVs would still represent only 1.76 percent of all registered vehicles in the nation. Not exactly a “sky is falling” scenario for traditional internal combustion, fossil-fueled vehicles. It takes a very long time to transition a nation’s fleet.
Car Sharing. The developed world is moving toward a sharing economy. Want access to a vacation home, an airplane or a wedding dress for a few days or a few hours? No problem. Various services make it easy for you to enjoy any of these—as well as many other products and services—on a short-term basis. No need to buy. Pay only for the time you use the item.
Car-sharing services are a fairly recent entrant into the sharing economy. Vehicles are stationed at convenient locations throughout many metropolitan areas. Any member may submit a quick reservation, grab one of the nearby cars and pay for its use by time or by mile. All the benefits of easy mobility without the costs associated with vehicle ownership.
A 2016 study by the Boston Consulting Group predicts car sharing will grow rapidly over the next five years but have a surprisingly small impact on vehicle sales. Nevertheless, many major vehicle manufacturers are investing in or starting their own car-sharing services to offset any loss in vehicle sales with usage fees from the car-sharing drivers. This includes Daimler’s car2go, BMW’s DriveNow, General Motors’ Maven and Ford’s Smart Mobility initiative.
The reason car sharing should have little impact on the fuel handling equipment industry? People still will drive where they need to go. Fuel still will be metered and dispensed. The equipment to facilitate both fueling and payment still must be installed, serviced and maintained—no matter who owns the vehicle.
Ride Sharing. Everything about ride sharing is designed with the customer in mind. An easy-to-use app. Convenient credit card billing. Easy expense tracking. Driver rating scales. Vehicle and driver choices. As a result, Uber, Lyft and other similar services have transformed and expanded ride-for-hire transportation in the eight years since ride sharing was born.
So important has ride sharing become that a national survey completed last month by Certify, a travel and expense management software provider, found that Uber is now the vendor most often expensed by business travelers.
As with car sharing, auto manufacturers are racing to get into the ride-sharing game, with GM’s $5 million investment in Lyft being the biggest move of all so far. But, here again, ride-share cars still need to be fueled. So, any potential negative impact on our industry is hard to see.
There’s a big lesson in all of this. The fuel and fluid handling equipment industry is a good place to be. Even in a time when multiple disruptive forces are rocking the transportation world, our little corner of that world remains strong and stable.
The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Richard C. Long, Editor. Opinions expressed are the opinions of the Editor.
PEI® and the PEI mark are registered trademarks of the Petroleum Equipment Institute. Copyright © 2017 All rights reserved. Reprinted with permission.