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Pilot Company CEO Shameek Konar joins Yahoo Finance Live to discuss its plans to roll out an EV charging network in partnership with GM and EVgo, and the outlook for the gas station and rest stop chain.
AKIKO FUJITA: Well, General Motors and Pilot Company are partnering to make your EV commute smoother with the addition of roughly 2,000 charging stalls at Pilot travel centers across the US. EVgo, the fast-charging network company operating and installing these stalls saw its shares jump over 15% on the announcement, though shares have pared some of those gains.
Joining us with more on the launch is Pilot's CEO, Shameek Konar. It's good to talk to you today. Certainly a lot of excitement when that announcement first came down. Talk to me about how this partnership came about.
SHAMEEK KONAR: You know, we've been-- at Pilot, we have this incredible network, where we can actually help solve range anxiety. And as you know, range anxiety is probably one of the biggest challenges we have on EV adoption. And we've been looking to try and find companies to partner with, and we've been working on this for almost a year and a half at this point, with GM and EVgo, to put together what would be a sensible way to basically provide safe, reliable charging, and a solution to range anxiety.
And you know, we finally got it done. We are super excited about this. It brings a new kind of class of customer to our locations. And I think it helps us with EV adoption going forward.
BRIAN CHEUNG: Shameek, it's Brian Cheung here. I mean, how much does that cost a company to do that, right? I mean, this is not your-- this is not you putting 10 or 15 charging stalls. This is a pretty big project here.
Why do you want to take on these costs? How is that distributed among the partners here? And then, what do you hope to gain out of it, in terms of things that could boost your bottom line? I imagine a lot of EV drivers might want to stop by your locations.
SHAMEEK KONAR: No, all great questions, Brian. So the first part, in terms of how much it's going to cost-- we've kind of stuck to the goal of reducing range anxiety. And we are going to size the number of chargers we put in these locations based on demand.
So if I take an example, some of the big highways across the country-- so if you look at I-10, which goes all the way from LA to Jacksonville across the country, over 2,500 miles, if you look at Pilots-- we've got a Pilot, on average, every 50 miles from la, to Jacksonville. Right?
Now, the question really becomes, do we treat a Pilot in the middle of Texas the same as a Pilot in the LA market? And the answer would be no, absolutely not. Because there will be much more demand in the LA market than there will be in Texas.
But what we are doing with GM and with EVgo is continuing to size the investment, based on the demand and the response we see in the market. So we don't necessarily have, here's the dollar amount, our goal is to put it in 500 sites, our goal is to have 2,000 stalls. But we are going to size it based on demand, and as EV adoption kind of increases, we fully anticipate putting in incremental chargers in these locations.
To your second question, you know, I think in the beginning, it's going to be difficult for us to make money on this. Because there aren't enough EVs out in the market at this point in time. But over time, we fully feel like this will be a great new set of customers who are going to come to our locations.
And you know what's great putting them in Pilots? When you go on a road trip or across the country, you don't change your behavior. You stop to fill gas. You're going to stop to charge your car at the same location.
And you'll have food. You'll have a number of other amenities, from showers to clean restrooms to merchandise. So our hope is not to change customer behavior.
AKIKO FUJITA: Yeah, Pilot's certainly a very familiar sight for those who are out on road trips. In your announcement, you mentioned government grants, incentives, included in the cost, the overall cost. How much of that's actually been secured already?
And I ask, because obviously, there was some money set aside in the infrastructure bill. But a lot of what was expected coming from Build Back Better is no longer, at least right now.
SHAMEEK KONAR: No, that's a great question. We do not have any of the money secured at this point. We have spoken to both the DOT and the White House, and we are working with the various states to put in grant applications.
But our transaction is not contingent on government funding. But we would require, or we would benefit from government funding, because like I said, the economics will be difficult in the beginning. And public-private partnerships like this would be the way for us to move forward.
But at this point, we have not secured government funding. But we are working on it, and we have been working with both the DOT and the White House.
BRIAN CHEUNG: Shameek, why EVgo? I mean, there's a lot of other partners I'm sure you could have gone with out there. Why specifically that company?
SHAMEEK KONAR: You know, EVgo's got a great leadership team that has been focused on trying to innovate in the charging space. So for example, EVgo's got a great lab, where they test out a number of different chargers, and try to improve the product. So they're a forward-thinking company that is trying to solve this problem.
We talk to all of them in the space, as you can imagine, right? There's about-- there are four of them, which are kind of the larger ChargePoint providers. And based on our conversations, and based on where EVgo is in its kind of phase of growth, we thought they were the right partner for us. Besides, GM also has another partnership with EVgo, where EVgo and GM work together, so there is familiarity with EVgo.
AKIKO FUJITA: Shameek, let's talk about the bulk of your current business. And that is, of course, gas stations, we have seen gas prices come down, but we're still looking at very elevated levels across the country. I'm curious how that has affected your business. And what are you seeing in terms of customer flows?
SHAMEEK KONAR: Great questions. We have seen gas demand definitely retreat from 2021 levels. And definitely, we're still way below 2019 levels, both at Pilots and across the country.
What we've been seeing specifically in the last couple of months after the elevation in prices and the war is, an average gas customer is consuming or filling, basically, 6% to 7% fewer gallons than they were before. So I think people are being way more cautious about the amount of money they're spending, and it is impacting our sales.
We anticipate this is not going to relax any time soon, because we do have a refining problem, globally, and we do not have enough product, and inventory levels have been very low after the COVID kind of reduction in supply, and the disruptions that have been caused by the Ukraine-Russia conflict.
BRIAN CHEUNG: Shameek Konar, CEO of the Pilot Company, thanks so much for stopping by this morning. Really appreciate it. Have a great weekend.