Starbucks could give a much-needed jolt to the EV market

• Mercedes-Benz is installing fast EV charging stations at 100 Starbucks locations across the nation.
• The partnership will help reduce range anxiety and could also drive more Starbucks sales.
• The 400kW stations are part of Mercedes-Benz's $1 billion plan to create High-Power charging hubs.

Mercedes-Benz is bringing its fast electric vehicle charging stations to 100 Starbucks locations. The move is a win for both EV owners and Starbucks, which is likely hoping to convince drivers to stop in for a coffee or bite to eat while they charge up.

The new 400kW stations — with fast-charging capabilities that can fill up compatible EVs to around 80% in around 30 minutes — will be installed in stores around the nation, including across Interstate 5, a critical West Coast travel route from Canada to Mexico. The charging stations will be accessible to all EV owners.

The new charging stations will help reduce "range anxiety" among EV owners, giving them an easily accessible and well-known place to stop when their batteries run low.

Range anxiety is the worry that an EV will run out of charge on a trip. Gas-powered vehicle owners don't have to worry about this issue because there tends to always be a nearby gas station. But for EV owners, it's a major roadblock hindering widespread adoption. A June McKinsey survey indicated that 46% of US EV owners surveyed were likely to switch back to a gas-powered vehicle, citing range anxiety as a major issue.

It's worth noting EV companies have come a long way — fully battery-powered cars used to only be able to drive about 100 miles on a full charge in ideal weather conditions. Today, that number has just about tripled.

However, inconsistent charging hubs still present a significant hurdle in wide-scale EV adoption, especially for drivers who embark on road trips or travel through remote areas. Both lawmakers and automakers have tried to bridge the gap with EV tax breaks and partnerships with companies to install public chargers.

Given the industry-wide effort to increase charging accessibility, it isn't uncommon for EV makers to partner with other companies to create charging hubs.

Mercedes-Benz previously partnered with Buc-ee's and Simon Properties to install its High-Power Charging at locations across the US. A spokesperson for the company told Business Insider it focuses on regions where EV drivers are already prevalent to accelerate adoption. It also aims to cover gaps in charging coverage, like on popular travel routes, the spokesperson said.

The spokesperson said it plans to expand in other locations, with a goal to eliminate the guesswork for the driver and create a seamless charging experience.

While EV chargers won't impact Starbucks' ambitions to reduce its carbon emissions by 50% by 2030, the partnership still enhances Starbucks' sustainability efforts and could help it combat a recent decline in comparable North American sales, which dropped 3% in the second quarter.

A company spokesperson told Business Insider that by 2030, it hopes to lead the retail industry in decarbonization solutions. The spokesperson said that expanding EV networks is "good for business and good for our planet."

"Partnering with Mercedes is the next step in expanding our EV charging network so our customers can refuel sustainably while they enjoy Starbucks," Michael Kobori, Starbucks' chief sustainability officer, said in the joint statement.

Starbucks also partnered with Volvo in 2022 to place charging stations across 15 Starbucks stores in a 1,350 span from Denver to Seattle. The company said in its announcement it has 1,000 company-operated and licensed stores with nearby access to EV charging.

A Starbucks spokesperson told BI that the company is not paying for the installation costs, but it will provide the space for stalls and other equipment. The number of chargers available at each Starbucks store will vary, but there should be a minimum of four at each location, the spokesperson said.

The Starbucks spokesperson said the coffee giant is continuing to learn how its customers interact with EV stations and exploring partnerships and areas that would benefit from similar routes.

Mercedes-Benz opened its first High-Power Charging site in November 2023 as part of an initial $1 billion investment to construct "the most desirable charging network." Since then, it's opened a dozen locations with 400 kW chargers across the country and plans to expand to half the US in the next 18 months.