What is the future for service stations and EV charging?
QUESTION
Hi John,
The question on my mind is what the future is for these large petrol service centres in your opinion. Will they become recharging centres when electric vehicles roll out, or do you think they will be redundant?
I own and operate 12 coffee shops in some large BP service centres on the east coast on the freeways surrounding a major metro city.
I have options for leases to run for 20 years. The question is: will they be viable in say 5 years or will it take 10? Overall, do they have a long term future? At present in the absence of COVID they are very lucrative businesses.
Do you have a view on these mega food and fuel centres when the fuels used in Cars change in the near future Your thoughts would be appreciated
Regards,
Gill
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ANSWER
Gill,
Okay, so the ‘short' answer below is that the most enthusiastic countries on earth about EVs are planning to eliminate the sale of internal combustion cars by 2030-2035.
Not the operation of internal combustion cars - the sale (of new internal combustion cars). https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehicles
10 countries are planning this currently. (Therefore, 183 countries are not. There are 193 countries on Earth.) Plus a couple of US states. Some other countries have timelines for 2040 or 2050. China is researching a timetable but hasn’t set a date. But I think only Ireland has introduced actual legislation for this. Sweden has a coalition agreement, but everyone else has plans, or targets or thought bubbles. There is very little actual legislation even in the most enthusiastic countries on this. (Don’t worry - I’m getting to your coffee shops.)
Rather than promoting EVs, Australian states are planning to tax them - so we’ve got that arse-backwards, promotionally…
But let’s just say we did ban the sale of internal combustion cars in 2030, by legislation, and we sell about one million new EVs every year after that (roughly in line with new vehicle sales today). There are currently 15 million cars on Australian roads. It would take something like nine years to a decade for the average Australian car to be electric. By then, ie 2040, there would probably be 20 million cars on the road, based upon historical growth data of the national fleet. (I’m talking passenger vehicles, not all vehicles.)
These data on the fleet come from the current ABS Motor Vehicle Census, which might be of interest to you: https://www.abs.gov.au/statistics/industry/tourism-and-transport/motor-vehicle-census-australia/latest-release#data-download
So, drawing conclusions from those numbers, in 2040 you’d still have about 10 million internal combustion cars on the road, plus 10 million EVs. And those 10 million ICE cars (internal combustion engine) will still need to be fuelled, which would represent a reduction of one-third of the liquid fuel requirements of today. However, those EVs (some of them at least) will need to be recharged ‘quickly’ (for EVs - meaning about the same time as it takes for lunch) while they are en route somewhere. And people will inevitably still need to stop somewhere for a coffee or a burger or a pee...
This is a worst-case scenario for you, right? Like, I’m doing it from the perspective of maximum possible impact for you. I frankly cannot see it happening that quickly, Down Under. It’s insane to think this could happen that fast. Like, it’s a La la Land suggestion. Take-up of EVs in Australia will be far slower.
EVs are currently 2.5 per cent of global automobile production (roughly). I think it’s 2.3 million EVs annually. It’s pretty hard to see that scaling up 20-fold in nine years, especially as EVs are currently 50% more expensive than equivalent ICE cars. Australia will be slower than the rest of the developed world to press for this - if we press for it at all. It’s just not our style, from a regulatory perspective. We have some of the lowest quality fuel and some of the worst emissions standards in the developed world.
Insofar as I am able to predict the future, I don’t see your coffee shops being especially threatened in the 20-year term. In this timeframe there will also be the deployment of hydrogen fuel cell cars, which will require servos to deploy hydrogen fuelling infrastructure, and I’d suggest this will take place at flagship servos, such as the ones to which your coffee shops are attached.
Anything can of course happen - the dinosaurs probably thought it would return to business as usual after that inconvenient incident with the meteor.
I hope this helps you out.
Sincerely,
John Cadogan
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