Penny for Your Thoughts, EV Trends, Bitcoin ATM Ban

February 13, 2025

The End of the Penny?

During the Superbowl this past Sunday, President Trump tweeted out that he was ordering the US Mint to cease the creation of new pennies. This isn’t a new idea, in fact it’s been kicking around for about 20 years, and it’s all due to the fact that it costs more to mint a penny than the coin is worth–about 3.7¢ to create 1¢, a loss of over $85 million last year to create 3.2 billion new pennies. 

While many people and industries would take little note beyond curiosity about this change, the gas station and c-store industries are perhaps most impacted. As we tell legislators, gasoline is really the only ‘pennies business’ left, in which a few cents difference in pricing can add up to big amounts of money. It’s also the industry in which pricing truly matters down to the penny; many motorists will go out of their way to save a nickel a gallon. 

Canada actually stopped minting new pennies just over ten years ago, and as part of that change required that retailers round all cash transactions to the nearest nickel. That requirement was only for cash payments, credit/debit card transactions are still charged at the level of the individual cent.

The early analysis is that Trump does have the power to stop minting pennies, but permanently getting rid of them requires action by Congress. If they don’t act, then in 4 years the new President could conceivably bring them back. During the early months of covid we saw a problematic coin shortage, and that could happen in the future for pennies, though it’s not clear how long it will take. There are estimated to be 250 billion pennies in circulation, so it may take awhile for them to fade out. If they start to run out without Congressional action, it may fall to each individual store to have a policy for what to do with cash transactions if they can’t provide change that includes pennies, and stores may need to install signs alerting consumers of their rounding policy. 

Some retailers might wonder if there is a way to consistently price goods to force a round up (to the retailer’s benefit), though realistically that likely only works if someone is buying an exact number of gallons and paying in cash. The question is, would a station be able to advertise a non-rounded price, such as $2.99 a gallon, or would they be forced to choose either $2.95 or $3.00 a gallon. Since motorists are so price conscious, retailers may be incentivized to cut their margin to get to the lower of those two options. Losing 4¢ a gallon adds up for a station. 

It’s worth noting that gas tax rates are not and will not be rounded up to nearest nickel. On the other hand, they are taxed at the tenth of a cent and there never has been a coin for that either. 

C-stores may also see a problem because of the low prices for goods, and the sales tax being applied on most items means the customer is going to end up with a total that involves pennies. As much as society is shifting to card-based transactions, cash becomes more common the lower the total price is. 

To make matters more complicated for the policy change, forcing a rounding to the nearest nickel will increase the demand for new nickels, and those cost almost 14¢ each to make. So for a true money-saving move, the government may need to move straight to rounding to the nearest dime…

What are your thoughts about the potential elimination of the penny? Good or bad for the industry? Email Eric@njgca.org and let us know!

EV Trends

This week we also attended an informative webinar about trends in the aftermarket, especially as it relates to EVs. Last year about 8% of new cars were full battery electric, on average they were 13% in the states that have opted into the planned EV mandate, and 21% in California specifically. However, after growing for several years, this demand has plateaued in the last two years, not just in the US but globally as well. 

The key marker to watch for in terms of when EVs might take off more dramatically is when the total cost of ownership (not just upfront but including fuel and maintenance) is the same or lower than internal combustion engines (ICE) without any government incentives. Right now EVs are about 30% more expensive on average without incentives factored in. 

45% of the demand for new vehicles in the US is for a car under $45,000, but only 14% of EV models are in that price range. Conversely, 32% of EV models are over $80,000, which is only 2% of demand. 

While advocates for EV mandates have always worked on the expectation that once a motorist switches they will be a full convert, 41% of EV owners said they will consider switching back to an ICE for their next vehicle. They cite the length of time it takes to charge and the high upfront cost as the top reasons. There also aren’t nearly enough fast chargers, to even come close to their goals the US needs another 100,000 DC fast chargers installed in the next 5 years, just as the new Trump Administration is moving to pull back what funding had been approved. One third of all new charger installations are occurring in just 1% of US counties. 

MEMA’s projection was still that EV sales would rise to 30% of new car sales in 2030 and 60% in 2035, though on the low end they see that being 22% in 2030 and 35% in 2035.

About 10% of EVs now are 6+ years old, which is expected to rise to 15% in 2030. One problem for EVs that hasn’t been talked about enough is that collision damages are showing up as 30%-40% higher than similar ICE vehicles, and therefore insurance rates are already becoming 20%-25% higher (so far) for EVs, making them even less affordable. More EVs on the road will likely mean everyone is forced to pay higher rates to effectively subsidize these vehicles’ insurance policies. 

Nationally, the aftermarket industry for out of warranty work is $414 billion, projected to increase to $516 billion in 2030 and $528 in 2035. $182 billion of that is for service work specifically, $107 billion for parts replacements. 

Below are some more details about some of the costs and services that repair shops can offer EVs:

Crypto Kiosk Ban Proposed

On Monday NJGCA testified to the Senate Commerce Committee in opposition to a bill that would completely ban the availability of crypto kiosks, also known as Bitcoin ATMs. These devices have been popping up the last few years, particularly in c-stores. They look like an ATM, but they allow consumers to purchase Bitcoin and other crypto-currencies directly, from a trustworthy source. They are also the only way to purchase bitcoin using cash. 

Typically, these companies pay the store a flat monthly rate (around $200-$300) for the space they occupy, and otherwise require no work on behalf of the store owner. In addition to providing a steady income, they draw some new customers into the store to hopefully make other purchases. 

Unfortunately, some scammers have been targeting senior citizens and convincing them to transfer money using these machines, since once the transaction goes through there is no way to get the money back. We advocated that rather than a total ban on these machines, the State should look toward reasonable regulations on the provider companies. Hopefully, if this bill sees progress again, it will only move with those changes. However, the sponsor was clear that he believes these devices should be completely banned and that there is no legitimate use case for them. 

You can read our full testimony HERE. 

If this is an issue that affects you, please email Eric@njgca.org.  If this bill starts moving, it will only be stopped if legislators hear from local small businesses. If you do host one of the machines, we also advise you and your staff to pay attention to who is using them. If they are talking on the phone while using it, especially if they are a senior citizen, we encourage you to intervene as they are likely being scammed, and helping them out is not just the right thing to do, it can probably earn you a loyal customer too.

Tariffs on Aluminum and Steel Enacted

While the 25% tariffs on goods imported from Canada and Mexico (10% only for energy imports) have been put on hold until at least March 1st, this week President Trump enacted a new 25% tariff on all imports of steel and aluminum. These will of course increase the costs associated with the manufacture of these materials. This includes auto parts made in the US, but also many of the canned items sold in c-stores, such as sodas and energy drinks. Manufacturers are expected to pass all of those costs on, unless they can figure out ways to avoid them. For example, Coca-Cola stated this week that one way they will seek to avoid the cost is to manufacture more products in plastic bottles. Also, the tariff only applies to the raw materials, so for example, an energy drink manufactured in Europe or Mexico would not have this tariff applied. We also spoke with a fuel distributor who mentioned that he was shopping for new fuel tankers and was told the price would be about $45,000 more per tanker because of these tariffs specifically, and of course that’s a price you can expect to be passed on in the wholesale cost of fuel to retailers in the future. 

Rack Averages

News Worth Knowing:

Member Benefit Partner (MBP) Spotlight: Dana insurance & Risk Management 

Our clients are the smartest people in the gasoline business. Owning and operating USTs requires skill and attention to detail. We value being the tank insurance advisor to NJGCA membership. 

                                  www.dana-ins.com  (800) 821-1990 eric@dana-ins.com

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