Thanks Black Peter I actually enjoy the engagement and discussion on the company and strategy. I can’t believe more CEOs don’t involve themselves. It is a good way of getting to know what people are thinking about your company and put your own perspectives across.
My thoughts are similar to a number of people who have commented subsequently…
- The change out to a full EV fleet will take decades. There are 4m cars in NZ give or take and in a normal year around 150k new cars sold. Even if every new car sold into NZ from this year was an EV it would take 25+ years to change the fleet out. This will happen over a long period of time. Also given NZ is a wafer of world market share and we are a RHD (right hand drive) country in a world dominated by LHD…we typically are bottom priority of any production allocation decisions.
- The technology is rapidly evolving. EV battery tech is changing quickly (read about solid state batteries), the jury is still out on Hydrogen as well. I recently met with a large new car manufacturer MD who has a good line up of EV product coming in and his view was Hydrogen will win in the long term. But all this is just another barrier to people buying EVs because they are worried whatever they buy will rapidly become outdated.
- The capital cost of the EVs are still too high. From our research, 60% of kiwis will spend less than $10k on a car and 80% will spend less than $20k. Low cost used EVs carry significant perceived risk around the battery quality and life.
- The cost of EVs will drop…most likely driven by the Chinese brands. If they drop significantly, it may have an impact on prices of ICE used cars in the used space. Although the Government’s current Clean Car Standard is going to push used car prices up…another story. (Watch the Sunday program on TV1 this week) for more on this. Pricing has little impact on Turners given we buy and sell in the same market. We carry around 3 months stock at any one time and therefore have zero exposure to long term shifts in pricing. Our business is based on churn as a few have pointed out. We are completely agnostic about what type of car we sell , EV, ICE, hydrogen, big, small etc.
In my view the change out to EV will happen over a long period. Check out the actual EV numbers in the fleet here…
https://www.transport.govt.nz/statis...ev-statistics/ in my view no real growth in the number being registered per month for 3 years.
Turners will continue to thrive no matter the mix of the fleet.
Thanks
Todd