00:00Fuel stops are slowly evolving into multi-energy hubs, and Pilot is at the center of the shift.
00:07The company is working with General Motors and EVgo to roll out more than 275 EV chargers across 40 states.
00:14Pilot plans to expand to as many as 500 locations nationwide as interest picks up amid higher energy prices.
00:21For more, the CEO of Pilot, Adam Wright, joins us.
00:24Adam, I've got to say, this hasn't happened as quickly as I would have expected,
00:29and especially because at a place like Pilot specifically, if I'm there for 10 or 20 or 30 minutes,
00:38I'm going to go in and buy like a pocket knife or a CB radio or any of the things
00:44that, you know, I love to shop for at Pilot.
00:47Isn't it a better part of your retail strategy to have EV chargers everywhere?
00:54Well, first, I just want to say thank you for having us on, giving us a chance to highlight our
00:58business.
00:58Obviously, we play a critical role in North America's economy, serving 1.2 million guests a day and a critical
01:04part of the transportation sector with trucking.
01:07And so thank you.
01:08I would just say it's going about like I would have expected it to go.
01:12When we look at alternative fuels or anything really innovative, we always look first at preference, then pace, then performance.
01:20And we look at what are consumers preferring.
01:23And the adoption curve for EV hasn't been as a hockey stick as people would have expected.
01:29To disrupt the transportation sector, it takes a lot because of how embedded the fuel ecosystem is in the economy.
01:36And so it's going about like I would have expected it.
01:39And consumers continue to prefer alternative fuels.
01:43We're seeing growth in the percentage of EV cells every year, slowing a titch, but still growing.
01:50And so there's preference there.
01:52We also can see the pace of technology and the way we're able to charge sort of in people's journeys
01:59in their route.
02:00Getting that down to 30 minutes is pretty acceptable for a traveler.
02:04So the technology and the pace of that has evolved sufficiently to start that climb up the hill and then
02:10performance.
02:11We see utilization increasing every year on our charging network, especially on the weekends and the holidays.
02:17So those three things are there for us.
02:18But it's going about like I thought it would.
02:20About half of the customers who come and charge with us do go in and make a trip inside the
02:25store.
02:26And so we're seeing some lift in the retail side of things.
02:29But I wouldn't have expected EVs, either light duty or heavy duty, like our partnership with Tesla, to disrupt a
02:37mature and stable part of our economy as quickly as some projected years ago.
02:41Yeah, I just mean, you know, I grew up near a pilot.
02:44Used to always go to the one on I-70 heading out to Buckeye Lake.
02:48And I always stop at the Harrisburg pilot when I'm driving back in to New York.
02:52And it's more than just gas for me, right?
02:54I'm going to go in there.
02:55There's a Dairy Queen or, you know, there's accessories I need to buy for the car, charging kit or what
03:03have you.
03:04And whenever I see EV charging stations, they're always full or there's a line.
03:10So there's more impetus for me to go in and spend money beyond just whatever fuel needs I have.
03:16And I just wonder if you see that in terms of transactions.
03:19Yeah, we do.
03:20We focus on fuel, food and refreshment.
03:23And our strategy around EVs is to cause exactly what you're talking about, Matt.
03:27So in front of our stores, we have our charging stalls with overhead canopies very well lit.
03:33That encourages people who drive EVs to want to stop at a pilot so they can take advantage of all
03:38the other amenities that we do have.
03:39We have over 500 quick serve restaurants.
03:42We have our own proprietary deli.
03:44We have the best food on the interstate.
03:47We're very proud of the offerings we have.
03:49And we are seeing some conversion from EV drivers into our stores.
03:53But it is a focus area of ours.
03:55We're combining EV charging with our loyalty app, getting smarter about how to incent folks to get out of their
04:01car and come inside the store.
04:03And we do the same for our professional drivers and our gas drivers as well.
04:06So it is an important part of our business.
04:09We have fuel, but we also have food.
04:11And then we have the refreshment that drivers need, showers, lounges, et cetera.
04:16So when you look, Adam, at a national average gasoline price right now of $4.51, do you think about
04:25your EV build out and say, hmm, maybe it's time to even accelerate this even faster?
04:31No, we're on a pretty good pace right now, as you highlighted at the opening.
04:34We have over 250 locations.
04:38We have about one out of every 60 stalls in the country is on our property.
04:42So we're going at a fairly smart pace.
04:46We think about things for the long term.
04:48I know prices today are $4.50.
04:50That gets the conversation going about conversion to alternative fuels like EVs.
04:55But fuel is a commodity.
04:57So you're going to have our cycles, and we think we're at the right pace for the return on our
05:02investment.
05:03We want to be very smart and good stewards of the capital, good partnership with GM, EVgo, obviously, as the
05:08operator of the stalls.
05:10So being smart, we feel like we're feathering in at the right pace.
05:13We don't get too excited about spikes in fuel because those things tend to be cyclical in nature.
05:18This one might be a little longer than some people might have hoped for.
05:22But we think we're on the right pace to keep up with consumer preference again and the performance of our
05:26business.
05:27I want to ask about, you know, the rising price of gasoline, the rising price of diesel right now, the
05:33national average, $5.66.
05:36Has that created demand destruction?
05:38Are you seeing your customers try and use less gas than they would previously have used?
05:46We are seeing some strain, particularly on the trucking side of things.
05:53The smaller truckers in particular, these type of shocks are hard for them to absorb.
05:57If you're a small fleet, which the majority of the trucking companies in the U.S. are, about 90 percent
06:03of them have less than 10 trucks in their portfolio,
06:06about 30 percent of your expenses are related to fuel.
06:11So these types of spikes can take you from making a fairly good return on a load to cutting that
06:18in half or breaking even or even losing money.
06:20So we are seeing some demand destruction.
06:22It hasn't been as steep as some might expect, but it is local and regional.
06:27It depends on what state you're in, what taxes, incentives, what the local supply and demand is.
06:33I have a marker in my head of around $6 a gallon of gas and $7 a gallon for diesel
06:38to start seeing real destruction.
06:40And I can tell that because of California and Arizona, where you have those prices in that range.
06:45We've seen double-digit reduction year over year, like for like, at our stores in those two states.
06:52So I think we're a little ways away yet before you see why a scale of destruction on demand.
06:57But it is slowing, particularly for small fleets who have to park trucks or shut their doors.
07:02Adam, I've got to ask you about football.
07:05One of the best set of interviews I ever did was Ray Lewis and Jim Brown came down to the
07:11New York Stock Exchange during the draft maybe 10 years ago.
07:14And they were trying to educate, you know, these young players who were about to get more money than they'd
07:20ever seen in their lives in terms of, you know, financial education.
07:25How do you make the switch from football to business as well as you have?
07:31And how do you kind of pay that forward?
07:34Because so many of these kids are confronted with amazing wealth, but then don't find a way to continue to
07:42succeed after football.
07:46Well, first off, I want to thank you.
07:49And I hope this is recorded because my name was mentioned in the same breath as Ray Lewis and Jim
07:53Brown.
07:54So that is very humbling.
07:56Nowhere near the type of athletes those gentlemen were, the impact they had on the NFL.
08:01But for me, and this is just the way I framed it from a very young age, is that football
08:06was always a plan B for me.
08:08Plan A was always my education.
08:10It was always to have a job of some sort and contribute to society that way.
08:15Football was really, truly a means to an end.
08:17You look at the statistics and all the mentors and coaches who would pull me aside and talk to me
08:23about what the future probably really looks like.
08:25And most of my life would be lived without football or having cleats on.
08:29So for me, it was always plan B.
08:30And so I had a lot of great mentors in my life.
08:33I had an internship in college my freshman year all the way through college at the energy company that is
08:39Berkshire Hathaway Energy today.
08:40And so always working really on my plan A, which was life outside of football and to leverage football for
08:47the life lessons, for the team building, for the discipline, and then for the education and maybe the platform in
08:54the future to do something with it.
08:55So always a plan B for me made it very easy to transition.
08:58And then going forward, I have a compass, faith, family, fitness, my vocation and my finances, those five things.
09:05I always try to keep in balance and finances are a key part to be able to support your family
09:10and build your career and your future.
09:13And so I've always prioritized saving and been disciplined in that respect.
Comments