Despite the long term threat electric vehicles pose to fuel stations, the fact remains that the majority of Australians will be dependent on fuel reliant transport for the short to medium term.
Globally, Australia is one of the highest users of motor vehicles. However, our use of electric vehicles lags in comparison to the rest of the world.
According to a study by Knight Frank, Australia has around 6,500 active service stations, and 79 motor vehicles per 100 people, which is the sixth highest globally. This is surpassed only by San Marino, Monaco, Iceland, New Zealand and the United States.
In 2021 there were over 20 million motor vehicle registrations in Australia compared to just 23 thousand electric vehicle registrations. With 871 motor vehicles for every electric vehicle registered, this illustrates why fuel stations will continue to be heavily relied on for quite some time.
Electric vehicles only make up 1% of new car purchases in Australia, compared to the global average of around 5%. It therefore follows that while the introduction of electric vehicles presents as a major long-term threat towards the demand for fuel worldwide, the slow uptake of these products in Australia, largely due to the absence of government subsidies and their higher price point, means the threat is yet to hit our home shores.
When looking for reasons behind Australia’s slow electric vehicle uptake, it’s difficult to ignore the lack of incentives provided by the Morrison Government. This has to play a substantial role in the continued lack of motivation from buyers to purchase electric vehicles. In comparison, the market leader, China, has set a target for electric vehicles to account for 40% of all new purchases by 2030. Other countries such as Denmark and Ireland are banning the production of new petrol and diesel cars by 2030.
In preparation for the inevitable, albeit delayed, changes to demand, fuel stations have started offering more services with many operators investing in upgrades and additions including grocery stores, cafes, post offices and more.
Given the time lag, Australian operators would be wise to look to their European, Asian and American counterparts to gauge the effectiveness of business diversification. Such diversification reduces the dependency on a particular product but has the added complexity of moving focus away from what is important to the business. Smart businesses will learn from overseas failures and successes, and perhaps implement a hybrid strategy that works for Australian consumers in the mid to long term.
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