Plug-in Hybrid Vehicles: Impacts on the retail fuel sector
Abstract
Currently, several automakers are planning the introduction of plug-in hybrid vehicles
(PHEVs) to the U.S. market with estimated arrival around 2010. PHEVs operate using
a combination of gasoline and batteries and allow drivers the ability to re-charge
their vehicles at a home. This change in fueling behavior would decrease the amount
of petroleum fuel needed for transportation with any impact first being felt at the
point where the fuel is actually dispensed: the gasoline station.
This Masters Project aimed to determine effects on gasoline stations from a decrease
in petroleum demand due to PHEVs. An economic snapshot of the retail fuel sector
was created to determine the state of the industry and determine any trends in the
sector. In addition, a financial snapshot of gasoline stations was derived using
past data to determine revenue streams, both fuel and non-fuel, and the associated
profit margins with those revenues. Four future market penetration scenarios for PHEVs
(No, Low, Medium, High) were created and analyzed for future fuel demand using the
VISION model. The resulting fuel consumption was applied to gasoline stations to
determine any revenue impacts.
The results indicated that gasoline stations derive the majority of their revenue
from fuel sales, and have been increasing over time. In contrast, non-fuel revenue
has actually decreased slightly over time. In terms of profits, gasoline stations
derive the majority of their earnings from non-fuel revenue compared to fuel revenue
due to much higher average gross margins. The VISION model predicted large impacts
to gasoline stations, with PHEVs lowering fuel demand and the associated fuel revenue
generated. Due to their historical relationship, non-fuel revenue at gasoline stations
was actually predicted to increase as the fuel consumed decreased. For a sector that
is already undergoing a significant amount of change and struggling to make profits,
PHEVs offer a potential destabilizing threat unless retailers find ways to increase
margins and adapt to new vehicle technologies.
Type
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https://hdl.handle.net/10161/499Citation
Eyler, Zach (2008). Plug-in Hybrid Vehicles: Impacts on the retail fuel sector. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/499.Collections
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