Just like photo shops, petrol stations will soon go extinct, and your wallet will celebrate. (File photo)

OPINION: In the early 2000s, I visited my local one-hour photo shop. I paid $30 for 24 photos and a new Kodak film, the owner then told me the new digital cameras would never replace film, as the quality could never compete.

Two years later, both he and the shop were gone because neither could adapt to the disruptive technology.

Now, with the imminent arrival of electrical vehicles and very efficient engines, petrol stations will probably go the same way. BHP's Chief Commercial Officer said in September, 2017, that it may well be the tipping point for electric vehicles.

The behaviour of oil producing countries also suggests they now realise they are sitting on depreciating assets. Saudi Arabia took on the world's oil production in 2015 when they opened their valves and sunk oil prices to a new low of $50 a barrel in an effort to knock out competitors.

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In late 2015, oil prices plummeted to below $30 per barrel, a quarter of its value from ten years earlier. As Sheikh Zaki Yamani, the former Saudi Arabian oil minister, said, "the Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil".

Three forces are driving the imminent arrival of electric vehicles in New Zealand; worldwide momentum, increasing and more affordable domestic photovoltaic power generation, and economics enhanced by New Zealand’s very high petrol prices.

Worldwide momentum

Electric vehicles are coming and probably faster than we think. Although Tesla is the poster child, all automobile manufacturers are reported to be focusing and working flat-out on electric vehicles. Volvo recently announced that they will only produce electric and hybrid cars from 2019, and many other manufacturers are announcing new electric cars.

Technology, and in particular battery and range, is improving rapidly while costs reduce. According to our Government’s Energywise service, electric cars are far more efficient than combustion engines and convert well over 90 per cent of energy from their batteries into moving the car, compared to 20 per cent to 30 per cent energy conversion in a petrol or diesel vehicle.

Given that approximately 80 per cent of New Zealand’s electricity is generated from renewable resources, the electricity produced to run electric vehicles yields about 20 per cent of the CO2 emissions of their hydrocarbon equivalent.

In November, 2018, The Australian Financial Review reported on a Bloomberg New Energy Finance analysis showing an electric vehicle using electricity from coal generates 10 per cent less CO2 than a combustion engine burning gasoline. Electricity consumed in an electric vehicle from gas fired power generation generates 50 per cent less CO2 than gasoline, and, of course electricity from renewables generates no CO2.

The United Kingdom and France have both announced they will not have combustion engines on their roads after 2040, and China also said they intend to replace their entire vehicle fleet with electric cars, although without a date. New Zealand’s last National Prime Minister also announced a third of Government vehicles will be electric by 2021, and it is difficult to see a Labour/Green Government not supporting or even enlarging this initiative.

DAVID LINKLATER/STUFF Although Tesla is the poster child, all automobile manufacturers are reported to be focusing on electric vehicles.

Domestic photovoltaic power generation

Just as electric cars become better and cheaper, photovoltaic (PV) cells, domestic batteries and smart demand management at home and work are getting better and cheaper.

Given that most cars don’t actually work more than 5 per cent of their life and 90 per cent of travel is less than 90km, there is plenty of opportunity to charge the car off the roof for a minute proportion of the cost of petrol.

Economics

New Zealand oil companies are doing their best to encourage electric cars through their world high pricing of petrol.

Similarly, the Organisation of the Petroleum Exporting Countries (OPEC) encouraged disruptive technologies in the 2000s by trying to keep oil above $100 per barrel, which brought on more fuel efficient vehicles, such as hybrids. Now, New Zealand oil companies are providing a big incentive for customers to consider electric cars.

A recent report commissioned by the New Zealand Government found that New Zealand has the most expensive fuel, excluding taxes, in the OECD. The report found that the gross profit margin on fuel at the pump had doubled to about 30 cents per litre in Wellington and the South Island over the past four years.

There is a lot of economic incentive to switch to electric cars if electricity costs the equivalent of $0.30 per litre of petrol, rather than the $1.10 per litre, without the 47 per cent tax, you are currently paying for petrol.

Just like digital cameras, electric vehicles will arrive sooner than we think, and will dramatically improve society and the environment.

I use to pay $30 for 24 photos and a Kodak film, of which I would never look at 22 of the photos again. I now take as many photos as I like for free. Imagine how most New Zealanders would feel about $50 back in their pocket every time they need to fill up.

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