A wide-ranging conversation on petrol/gasoline prices and electric vehicles (EVs). The conversation explores the peculiar economic phenomenon that is Australia’s petrol price cycle. What drives it and how can consumers make it work for them? Show host Gene Tunny and his guest Tim Hughes then discuss the big issues around replacing petrol-powered vehicles with EVs. What does it mean for total electricity demand and what challenges do we face in adopting EVs?
Links relevant to the conversation
Transcript: Fuel prices & electric vehicles (EVs) – EP154
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Gene Tunny 00:01
Coming up on Economics Explored,
Tim Hughes 00:04
But you can maximize your chances. And you can sort of, play the game over that four-week cycle to keep your fuel costs down.
Gene Tunny 00:13
Welcome to the Economics Explored podcast. A frank and fearless exploration of important economic issues. I’m your host, Gene Tunny. I’m a professional economist based in Brisbane, Australia, and I’m a former Australian Treasury official.
This is episode 154, on fuel prices and electric vehicles. I’m joined this episode by Tim Hughes. Tim has been doing some business development work in my business, Adept Economics. Tim’s not an economist, but he’s very interested in economic issues. And in my opinion, he asked very good questions, so I thought it’d be good to have him on the show again to chat about some big issues regarding fuel prices and electric vehicles.
On fuel prices, Tim and I have a close look at a regular cycle and fuel prices that we see in Australia. On EVs, one of the important takeaways from the discussion, is the big challenge we face in replacing petrol powered vehicles with EVs. It’s not impossible, but we’ll need to generate much more electricity and spend a lot of money getting the necessary infrastructure for EV charging in place.
Please, check out the show notes for relevant links and clarifications and for details of how you can get in touch. If you’re outside Australia, please let me know if there are any patterns and how fuel prices behave where you live. Also, please let me know your views on EVs and any useful info you may have. I’d love to hear from you.
l’ll come back to EVs in a future episode for sure. I know that I need to look more closely at all the resources needed to build EVs such as lithium, nickel, cobalt, and copper. Australia looks well positioned to supply many of these minerals. But will there be sufficient supplies worldwide to meet the growing EV demand? We’ll aim to cover that issue in a future episode.
Right oh, now for my conversation with my colleague, Tim Hughes on fuel prices and EVs. Thanks to my audio engineer, Josh Crotts for his assistance in producing this episode, I hope you enjoy it.
Tim Hughes, welcome back onto the show.
Tim Hughes 02:16
Gene Tunny, good to be back.
Gene Tunny 02:17
Excellent, Tim. Now, Tim, you actually suggested the topic of today’s conversation. So, could you just tell us please, what are these issues that are turning over in your mind at the moment? What are you interested in speaking about today?
Tim Hughes 02:33
So many things Gene, but we’ll settle with; for today, we’ll talk briefly about the price cycle. We’re in Brisbane, in Australia, we have this price cycle of roughly month fuel prices, yes. So, it was in relation to that when we got chatting. There’s a lot around this that we did discuss that we won’t go into today around, you know, the future with electric vehicles and that kind of thing. I don’t know if we’re going to talk about that too much.
Gene Tunny 03:05
I’d like to chat about that, because I’ve done some research on that.
Tim Hughes 03:09
So, it did set us off around fuel prices. And then, we did talk in broader sort of, ways about the future of what that fuel cycle might look like with the rise of electric vehicles, and then how they’re going to be paired. So, we’ll talk about that in a bit shortly, I guess. But fuel prices otherwise, yeah.
Gene Tunny 03:31
Exactly. I mean, there is a logical connection there isn’t there. Because with the higher fuel prices that’s making more people think about electric vehicles. The problem is electric vehicles are still so expensive. And the Chief Executive, I think, was Ampol. The other day, I saw it in the financial review, I’ll put a link in the show notes. He came out and said, look, basically they have to half in price, you need to get those EVs prices, which I think start in the 40,000s and if you want a Tesla, it’s above 50,000. You need to get them into the 200 to 300 range for there to be widespread take up of EVs in Australia. And I suspect I mean, there’s going to be a similar issue in the States as well and in other countries.
Although Scandinavian countries, they seem to have higher rates of take up and yeah, but here, I think the price is a barrier and also the so-called range anxiety. We can talk about that a bit later.
Tim Hughes 04:28
There are so many things that would be interesting to talk about with that. And of course, there’s a cost, an ongoing cost to me, the amount that for instance, you might pay, on petrol or diesel now, over a year compared to what your costs might be to charge an electric vehicle and the running costs of any vehicle, which seems to be at the moment far less if you have an EV.
Gene Tunny 04:56
Exactly. Well, you’re not paying for the petrol.
Tim Hughes 05:00
You’re paying for the power, I mean, at the moment, you charge these not from home, it like, there are certain stations that you charge the EVs at. Is there a cost to those? I haven’t actually checked that. I understood that Tesla didn’t charge for recharging the car. I don’t know if that’s correct or not.
Gene Tunny 05:18
That’s a good question. I’m not sure if it’s made it or not. I’ll have to look into that. I know that the Queensland Government has; it’s built this EVs super-highway across Queensland. So, it’s set up charging stations in different cities, I think there must be over 20 of them. I’ve got a link somewhere I can put it in the show notes. They’ve got them in places like Port Douglas and there’d be some places in Brisbane and Cairns Townsville.
Tim Hughes 05:45
I mean, this is an area, because I know that we were speaking broadly today. So, we’ll go into a deeper dive into that part of the infrastructure and the costs. Because I can only imagine that if it’s free at the moment, that it won’t stay that way. I mean, it doesn’t seem to be tenable to not charge people. And also, it’s not the way that it normally works. Obviously, if there’s energy being used, somebody’s got to pay for it somewhere.
Gene Tunny 06:11
Well, I think there’s a big issue with apartment blocks. So, if you, if you’re doing it at home, then you’re paying for it. The question is, what happens with apartment blocks and some of the evidence I’ve seen, and I’ve got, when I was doing the research, I found these experts talking about the challenges in some apartment blocks of getting the right infrastructure in there, and making sure that the apartment block can support the EVs that are drawing all that power, given they’ve already got lifts and things that are also drawing on power. So, that’s a big issue there. So, there’ll be cost associated with that that’ll have to be met by the body corporate.
Tim Hughes 06:50
Well, we might as well dive as deep as we can on this now, because that is such a big part of what that future of EVs will look like, I mean, obvious time for people to charge their vehicles is overnight, most people, you know, working sort of, during the day. So, to charge overnight, you’d want to be able to charge from home, if you’ve got a house, that’s going to be more likely. Clearly, you’re going to be using power. If you’re in an apartment, like you’re saying there’s going to be an infrastructure challenge there to make that available to the cost basis. And if you’ve got street parking, you know that’s going to give you another challenge, as well. But all of that energy as well, it’s got to come from somewhere. So, we’re going to have to produce more energy than we currently do for electricity to basically replace what we use fuel for, petrol and diesel to have electricity. And then the conversation around the likelihood of where that energy is going to come from, again, infrastructure would be something to consider. But clearly, at the moment, we can’t do that through clean energy. So, the drive towards clean energy is also then part of that question. I don’t know, we’ve talked about the importance of coal, in a transition phase from current coal supply or coal supply power to clean energy.
Gene Tunny 08:20
Well, at the moment, we really don’t have much of an alternative, because we’re still generating the bulk of our electricity from fossil fuels, than coal and gas. Now, the idea was that gas would be the transitional fuel that we would move out away from coal fired power much quicker than we have. But I think we’re discovering now just how hard that is and what that means for the reliability of the network. A lot of the problems we’ve had in the electricity market here in Australia this year, have been because we’ve had some coal fired generators offline, the Callide generator up in Queensland, part of that which was shut down for they had some incident there last year, if I remember correctly, and there are other coal fired power stations that have; there was a big one that closed down in Victoria. And that means that there’s not as much capacity as there once was. So, that’s a big issue.
And when you have a winter, that was unexpectedly cold, there’s a big demand. There’s not enough supply, the renewables are intermittent. We don’t have enough battery technology to store the power. We don’t have enough pumped hydro. Yeah, this is it’s a big problem.
Tim Hughes 09:35
Well, I mean, the thing is, like, it clearly seems to be moving that way. Personally I’m fully supportive of. I think the drive for clean energy, and electric vehicles is good. One of the things I wanted to talk about was, from your perspective as an economist, you know, to look at just how clean the making and running of electric vehicle is because obviously, there’s an environmental cost to anything that gets produced, and then whatever waste products come from that. But the move towards that seems to be, it’s quick. And so, in some ways, I guess it’s not a problem unless we’re just trying to move too fast. You know, like, clearly there’s a transition period that’s needed with the available infrastructure and fuel supply that we have currently. But that’s going to change significantly over the next 5-10 years.
So, as that move towards electric vehicles, as the infrastructure does catch up, and as the cost of the vehicles comes down becomes more attractive. I can only imagine then that, we can only move as fast as we can move. So, if there’s a holdup with the infrastructure, or the power supply of electricity for EVs, that’s going to just slow down the rollout of EVs and lengthen the period of time that we might have fuel powered cars.
Gene Tunny 11:03
Yeah, I think maybe we’ll save this discussion for later on in the program, because you’ll get on to the fuel prices. I think that’s a very good introduction. I agree with you regarding those challenges that we face, I think you’ve actually captured that or presented that quite well. That’s good. Very good, Tim.
So, you got me thinking about these issues myself.
Tim Hughes 11:31
Yeah. And there are big areas as well. And we will have like, a lot of this, obviously, like I said, we can dive as deep as we can. We have got some guests and friends and colleagues that we’ve been talking to about coming on here who can dive far deeper than us on these individual issues. But this is more of an overview. I guess, at the moment.
Gene Tunny 11:53
I had Lukas Bednarski from, well, he’s over in London, he’s wrote a book on lithium. He came on the show last year, and just talking about all the opportunities with electrification and making use of, of lithium batteries. So, we had that conversation. So, I’ll put a link in the show notes. So, that was good.
So, there’s a lot of potential there. It’s just a matter of, you know, how’s all this going to come together and play out? And if you’re an optimist, you think, oh, yeah, we’ll solve it all with technology. And we’ll, get the policy settings right. But then if you’re an economist who has been around a while, you might be thinking, no, it looks pretty risky. And, I’m not sure we will get those policy settings right. We will eventually, but there’ll be a lot of messiness in the meantime. And that could last decades.
Tim Hughes 12:49
It’s really interesting, because we’ve obviously headed in this direction of electric vehicles, because hydrogen powered vehicles are still in the conversation and all sorts of other options, I guess. And it’s going relatively fast in the EV direction, and where it had been talked about for decades prior to it really happening. So, this is really quite fast. And I guess technology is just driving that little bit further ahead, of course. And so, we’re just following the available technology. And as they get better, the rollout of EVs is getting quicker. So, it’s that, I guess, we have all of these industries, working like crazy to get ahead of the demand to try and make it possible. So, it’s an interesting time. It’s a fascinating time to see all of this change happening globally, extremely fast. It’s very quick.
Gene Tunny 13:45
Talk about how fast it’s going. It’s going faster in other parts of the world than it is in Australia.
Tim Hughes 13:53
Always fastest in Scandinavia. They always seem to be ahead of the curve over there.
Gene Tunny 13:58
Yes, yes. Yeah. That’s a whole different; that’s another podcast episode, possibly. What is it about Scandinavia? What is it about Sweden? I mean, from the outside, it looks like they’ve got a lot of things right. And we look at it from our Anglo-Saxon perspective and we think oh, well, we really wouldn’t do things like that but it seems to work for them and they seem to be very happy.
Tim Hughes 14:27
The Viking mentality tribes.
Gene Tunny 14:33
We’re gonna chat about that in another episode. Let’s begin with fuel prices. So, everyone’s noticed petrol prices are so high. I mean, what are we paying? Is it nearly $2 a liter or something?
Tim Hughes 14:47
Well, so we’re in August 2022 in Australia, so this is going to be not an evergreen episode for this part of it. Currently, the cycles just finished in the last week or so. So, it went up to $1.95. So, I’m going to come clean here, I’m a complete fuel nerd. Like when it comes to prices, I’ve sort of, tried to maximize everything, which is I think, where this conversation started with us. The previous peak of the cycle went to around $2.25. So, which is about as expensive as it has ever been? I think it was hitting new heights that was just a couple of months ago.
Gene Tunny 15:23
Was that before they cut the fuel excise?
Tim Hughes 15:27
That was after. So, we were still with the fuel excise in place, which I think is 22 cents a liter. Is that right?
Gene Tunny 15:33
Yeah, it’s normally 44 cents a liter. And they halved it temporarily and
Tim Hughes 15:37
So, the Morison government put that in place. We had an election over here, of course, and new government, but that is still in place, and has been extended until the end of September, I believe.
Gene Tunny 15:49
Yes. So, finishes in late September, September 29, or something like that, and it’s going to be a big deal when the cut is unwound, and there’s another 22 cents a liter added to your fuel bill.
Tim Hughes 16:04
From the consumer’s perspective, we can only imagine that when we were paying $2.25, we should have been at the top of the, you know, the most expensive part of the cycle, effectively, we would have been paying $2.47. Without that fuel excise cut, you know, an extra 22 cents. So, in the cycle, it’s just been, we’ve dropped down to as far as a dollar 53 was about as low as it went. Which was great, you know, so for the consumer, it’s really good. It’s just going up to $1.95. So, it’s about a 40-cent jump whenever it seems to jump. The cycle seems to be around a 40-cent cycle. So, we’ve gone a lot deeper than before, without any real understanding of why there’s still a war in Ukraine, which apparently has an influence on fuel prices here.
Gene Tunny 16:55
Yeah, because Russia was producing oil and also, the gas supplies have been compromised. And so, there’s some substitution between gas and oil in our generation. And so like, everything’s connected, and so when Russia gets taken out of the market, and there’s still the demand for it, because the global economy has been recovering from the COVID recession, prices really,
Tim Hughes 17:24
Which made sense. I’m saying, like, it supposedly affects us over here, because it doesn’t explain why we got so low at the bottom of our last cycle, which was down to like $1.53.
Gene Tunny 17:38
Okay, so the global oil price was coming down, it’s going back up now. So, if you look at the Brent crude oil spot price, and I’ll put a chart in the show notes, it got up to about $125 a barrel earlier in the year, it fell back down to maybe about 95, or something it’s been at, and it’s going back up now.
So, there’s a report from Reuters. So, this is a 23rd of August report, 2022. Oil prices surged by nearly 4% on Tuesday, after Saudi Arabia floated the idea of OPEC plus output cuts to support prices in the case of returning Iranian crude and with the prospect of a drop in US inventories. Okay, so prices are starting to go back up. Yeah, they reached almost $130 A barrel in the US earlier in the year. So, they’ve been down a bit since then. But they’re much higher than they were a few years ago.
Tim Hughes 18:45
Yeah. So, the thing being is like, I find it really interesting as to why there’s such volatility in these little four-to-five-week cycles that we have here. So, for instance, we’re up at 2.25 just a few weeks ago, with the 22 cents cut. So, that’s dropped 30 cents, if we’re talking the peak of the cycle. So, we’ve just gone back to the start a new cycle, and it went up to $1.95. So, that’s still 30 cents less than what it was. As a consumer, it’s great, you know, like, obviously, we love the low prices, but that volatility in the local cycle doesn’t seem to match other cycles. That’s not linked, that kind of volatility that doesn’t seem to be linked to the price of crude oil.
Gene Tunny 19:33
Okay, so what’s interesting I think about the Australian market and we’ve studied this extensively in Australia, the ACCC, the Australian Competition and Consumer Commission keeps an eye on it. I think I’ll have to look more closely at other markets but I think this really isn’t Australia phenomenon that we’ve got this price cycle. I don’t know if you noticed it when you’re in England.
Tim Hughes 19:54
They’re pretty stable over there. Like it doesn’t seem to move around very much. I mean, I have to say it’s actually a bit of a game. It is a game over here, which kind of you know, like putting fuel in the car is pretty dull. So, it’s a little bit more spice to doing that, because you can, which we’ll talk about at some point. I know, this is one of the things we talked about, which got us on to this conversation, but you can maximize your chances. And you can sort of, play the game over that four-week cycle to keep your fuel costs down.
Gene Tunny 20:24
So, we can talk about how it is a game and one way that economists have analyzed fuel prices is as a game. So, there’s a field of study called game theory. So, you’ve seen A Beautiful Mind, haven’t you, John Nash, the great mathematician who, you know, had a few issues, but was, obviously a genius. He made major contributions to game theory. So, game theory is a theory of how do people interact? What’s their best strategy, and you can apply that to businesses. And you can apply that to say, fuel retailers, I mean, what’s turned out to be the optimal strategy that they’ve all figured out works for them, and no one really deviates from it. Because it’s just going to make life worse for everyone. If they get into some fuel price war, that is figure out, let’s not do that, let’s not rock the boat, let’s just go along, and we’ll will benefit from this cycle. And they’re making this cycle work for them. So, there’s no real collusion, they’re not ringing up each other. They just sort of, all know how the games play; this has developed over the years.
Tim Hughes 21:30
They’ve got a mode of behavior that they all follow. They just have to do the same thing at the same time.
Gene Tunny 21:40
Yeah, it’s, it’s funny, isn’t it? You can explain that with Game Theory. So, there have been various different models of this proposed over the years with fuel prices. I’ll have to revisit it, I remember learning about it in the 90s. This was a topic of conversation in one of our micro economics lectures, I remember Harry Campbell is a professor at UQ. He would often talk about fuel prices.
Now, the way I think about it is how this benefits the petrol retailers is that they’re able to segment the market, they’re able to divide the market into different segments and charge different prices to both segments, and this is going to maximize their profit. Now, one of the challenges that firms have when they’re selling to the public is that they can’t distinguish between different customers in terms of their willingness to pay, how much were they actually willing to pay for this their product. And so, what they end up doing is, well, if you can’t really discriminate, every customer has to pay the same amount, then the price you charge is just enough to cover the costs of production of the last unit, the last sale that you’ll make to the last consumer that is profitable to sell to. But what that means is that you’re missing out on a lot of the upside from customers who would have paid more. And, well, what you can do is have a strategy of price discrimination, if you can separately identify different groups of customers, you can discriminate amongst them charged at different prices, depending on their willingness to pay. So, that’s why for years I mean, well, look, that could be another explanation. But one explanation for why nightclubs used to charge lower cover charges for females, relative to males is that males typically had more money, they made more money on average, higher income, higher willingness to pay to get into the nightclub.
Tim Hughes 23:41
I thought that was to encourage, because it was better to have women in the nightclub.
Gene Tunny 23:46
I think so, that’s part of it. But it could also be because men have a higher willingness to pay to get into the nightclub than women. So, yeah, it’s in the interests of the nightclub to attract the women in;
Tim Hughes 23:59
And to get the men in who want to pay more to get in.
Gene Tunny 24:03
Yes. To the attract the right ratio, or the right numbers of women, and they have to lower the price for females. And then they charge the males more. Males have a higher willingness to pay to get into the nightclub.
Tim Hughes 24:17
And then we’re known as meat markets, which sort of, explains that approach, I guess, because that was part of that scene, I guess.
Gene Tunny 24:29
Yeah. Don’t think as many places have covered charges now.
Tim Hughes 24:35
They do apparently, someone also tells me
Gene Tunny 24:38
I guess I’m not going to;
Tim Hughes 24:41
You can get in free before 10 o’clock at certain clubs. But back in the day.
Gene Tunny 24:48
I’ve just noticed that there seem to be fewer places with cover charges. I think maybe it’s more competitive now, who knows. Anyway.
Tim Hughes 24:54
We should do some research on that.
Gene Tunny 24:59
So, how I think this plays out in the fuel market with the fuel cycle that goes over several weeks is that they figure out there’s a group of customers who are really price conscious, they’ll buy when the fuel price is cheap, we’ll get them in. So, they’re a group that we can’t really get out. Or we can’t charge the high price to. They are the savvy consumers, they’re like you, Tim. They’re monitoring the, what are you doing? Are you monitoring or not?
Tim Hughes 25:45
Yeah, we’ll go into that in a bit. I’ll let you finish what you were saying. I’ll go into that.
Gene Tunny 25:49
Okay, you’re the savvy consumer. They know that there are some consumers they have to charge this lower price, too. But then there are the less savvy consumers or the consumers with deep pockets who don’t really watch the fuel tank, who aren’t thinking about when should I fill up what’s the optimal time, they just don’t care, there’s a high opportunity cost of their time. And the fuel retailers know that it’s sometimes, we can really charge them the maximum that we can get away with.
Tim Hughes 26:18
So, they are the only ones who are going to be filling up.
Gene Tunny 26:21
So, what they’ve done with this fuel price cycle, it allows them to segment the market into the high opportunity cost people who don’t care, people with deep pockets, let’s charge them as much as we can get away with. And then another market segment; that’s the savvy consumer, the cost-conscious consumer, the consumers who are paying attention to this price cycle, the fuel nerds, they might be monitoring the ACCC website, and the ACCC website is amazing. It has buying tips. I’m going to have to follow this now. Buying Tips, prices are decreasing, but they are likely to decrease further. So, this is what you were saying before, we were at the peak of the most recent cycle, is that right? And so they’re coming down now.
Tim Hughes 27:08
So, it went up to $1.95, which is a peak, is lower than it has been. It was going up to 2.25. That was the peak just a few weeks ago, maybe, one or two cycles ago; the top of it was 2.25. And that’s with the 22 cents cut in in the excise.
Gene Tunny 27:26
Yeah. Okay. And they recommend, if possible, motorists should delay by and petrol until later. I wonder if anyone’s ever complained to the ACCC about their advice. But I guess their advice is based on the cycle, and the cycle is just built in now. Because everyone’s playing the game; all the fuel retailers know that this is in their best interest, all the customers come to expect it.
Tim Hughes 27:48
There’s very little said about it, because it’s just accepted. That’s just how it is, but you can see, when the when the cycle does change. Because it happens gradually, it’ll happen over a seven to 10 day period from the first one you see, changing all of a sudden, that’s 40 cents difference, no one’s going there, it’s empty. So, very few people are going to be at that first one. And then it trickles down over the next seven to 10 days, until the last ones there. And when you get to that pointy end, those last ones normally have quite a few cars in there filling up. So, you can maximize your chances obviously, by keeping topping up or go through.
Gene Tunny 28:29
Yeah, you know, you go through it, but just tell me, did my explanation makes sense?
Tim Hughes 28:37
It did, because it was one of the questions why did they do that? But that made sense as to why they do it because they’re looking to charge as much as they can for those who don’t care as much.
Gene Tunny 28:50
That’s my as to why they’re doing it. It makes sense in terms of price discrimination, which is something you learn about in first year economics or micro economics. It’s a strategy that a firm will employ if it can distinguish different market segments and charge different prices to different market segments.
Tim Hughes 29:12
I guess it’s interesting. I’d like to say I don’t mind it, it’s a bit of a game and you play the game, or you don’t care. And it’s it doesn’t really matter. But I wouldn’t be interested; like my other experience really is in the UK, where I’ve been for longer periods and not noticed the cycles. And I would imagine with anything like this, if there’s a benefit that that will catch on and get done around the world. So, it’s kind of like side thought, but it’s it would be interesting to see if it’s unique to Australia to have this kind of volatility in a four-week cycle, or if that’s common in other parts of the world.
Gene Tunny 29:47
Yeah, I’ll have to look more into it. But it’s my understanding that it is. This is an Australian phenomenon. We’re examining that there might be elements of it in different countries, but for some reason it is baked in here. Our retailers have figured out, this is in our best interests.
Tim Hughes 30:04
Because it’s a big step, I mean, 40 cents out of it. Like, even if we average $2 at the top of the range at the moment, you know, that’s a 20% difference, which is big.
Gene Tunny 30:19
Anyway, okay. I want to hear about how you’re playing the game, Tim. Could you tell us how you’re playing the fuel price game?
Tim Hughes 30:26
It’s great, because technology really helps with this. There are several apps out there, for instance, again, this is Australia. So, for other countries, it’s going to be different. But there are; RACQ have one, there’s another one called fuel track, I think it is. And if you just look up fuel app, you’ll come up with all these different ones. And they will tell you, or you can search your local area to find out what’s the cheapest and you get a good idea as to, once you hook into the cycle, you can start to see when they’re starting to go up. There’s normally a couple of, for instance, here in Brisbane, around Kenmore, there’s a couple of servos there that are like the first to adopt; but that changes around too, you know. So, you can find that where it used to be the first place to go up isn’t always the case, I don’t know how that works. And again, that’s going to be stuff that we may never know about. But it doesn’t seem to be absolutely predictable.
But what is predictable is once you see one go up. And so, if you can search an area around you and you see the first one go up, then you know you’ve got maybe a week before that disappears out of the realms of being able to get that lowest price. And so, when you know you’re at the bottom of the cycle will you fill up, you know, you fill your car up, and you keep topping it up until the cycle is completely gone. There’s a further thing you can do, which I’ve got, which is from the 7-11 app, it’s called My 7-11. And so, 7-11 and Mobil have joined forces. So, it’s basically a Mobil servo with the 7-11 shop attached to it. And the My 7-11 app allows you to do a fuel lock, which is fantastic. So So, when you when you know you the end of that, and again, this is a real game, because when you do your fuel lock, it’s locked in for seven days. So, you can do it, but effectively, you’ve got seven days before you can then put another fuel lock in. I did a fuel lock, and it was a long time before it all disappeared. So, I filled up on my sixth day, and it reset. So, it looks like if you do your fuel lock, I might be hard to follow with this. I’ve realized but, if you do a fuel lock and then you buy some petrol. What happens is you show your app and the little barcode of when you did the fuel lock and it’ll lock in the price that you locked in. Then it starts again. So, that seven-day cycle does actually start again. So, you don’t have to wait seven days until you can do your fuel lock again.
Gene Tunny 33:05
Is there a transaction fee if you’re locked? Do you have to pay for fuel lock?
Tim Hughes 33:09
No, nothing. So, it’s really good. So, obviously, if you don’t use a full tank in those seven days, you stretch out until the seventh day, you’ve got a time on your fuel lock, which says it’s only up until this point. And then you can go to a 7-11 or Mobil station, fill it up and show them that fuel lock barcode on your app, and it’ll charge you, so for instance, instead of paying $1.95, I paid $1.55 for the tank full I got yesterday. There’s one little tip there, which I got wrong. The first time I used it is you have to specify what kind of fuel you’re going to use. So, I just had unleaded and I filled up with the 10 and they wouldn’t honor it because you can only do it for the fuel lock of the fuel that you’ve locked in anyway. Nerdy stuff but you can get you can get another week’s worth or another full tank of discount fuel once everyone else is paying top dollar.
Gene Tunny 34:12
Yeah, so tell me about that. I mean, you’re not going to get from trough to trough of the cycle with one tank of fuel, are you?
Tim Hughes 34:21
It depends what you do, what car you’ve got. And for me, I use about a tank full of fuel every week. I do a lot of running around. Like for you, you’d be okay.
Gene Tunny 34:32
I Hardly use any;
Tim Hughes 34:36
But you don’t do a lot of driving with it. So, you probably fall in the category where you don’t really care because you don’t use much anyways. You just get fuel when you need it. Yeah, but using a tank a week with a lot of running around, it makes a big difference. So, I never pay top price. And so, the rest of my strategy, I’ll just finish my thing there. So, I’ll do that, I’ve filled up at the cheapest, I’ve put my fuel lock on, or go for another week, and then fill up again at the last opportunity, either the weeks running out, or I’m running out of fuel, fill up again. And then you run that all the way down. So, you basically run that extra tank out, by which time, more than halfway through the next cycle. So, you should be heading towards a reasonable price anyway. And at that point, you just put in 20 bucks, $30 at the most to top up until it gets to the bottom of the cycle, then you fill up and go through it all again.
Gene Tunny 35:30
Yeah, I find it interesting that they don’t charge you for that privilege of having fewer lock, because if you think about it, there’s a correspondence to something in financial markets called a call option. Okay, so this is the Investopedia definition, a call option is a contract that gives the option buyer the right to buy an underlying asset at a specified price within a specific time period. So, you might have a call option on a share. Now they’re giving you something of value and you’re not paying for it because you got the right to buy that; maybe they figure out some people are going to make the wrong call. Or it’s a way of them segmenting the market even further, because they realize it’s the real savvy, the super savvy customers who are going to fuel lock, that will do enough research to figure this out. And yet we know we can’t rip these guys off.
Tim Hughes 36:35
Well, it’s an interesting point and they’ve obviously got reasons for that one of it. One of the reasons with 7-11 is that you have to go in their store, which is effectively a 7-11 shop, to pay for your fuel, and they have all these other rewards and incentives for you to buy stuff in there. So, the more often they can get you into that shop, the more often they can get you to buy things from them.
Gene Tunny 37:00
So, they’re hoping you get the connoisseur cookies and cream ice cream?
Tim Hughes 37:04
That’s just a rumor, Gene. That wasn’t real.
Gene Tunny 37:06
that was stuck. At 7-11.
Tim Hughes 37:12
They had this brilliant thing with a $2 Pies sometimes ago, which were okay. But yes, so there’s other incentives and other marketing schemes for doing that. And I think 7-11 is one of those that doesn’t take part; my understanding is they don’t take part in an ongoing rewards offering. So, for instance, part of my strategy is using Puma for that interim time. So, once I’ve used my fuel lock, when I get my fuel from that point onwards, I go to Puma, because I can use my RACQ card and I get four cents off a liter, so that drops it down again. This is another retailer, so, my understanding is I don’t think there’s one out there for Mobil. And so maybe they just sort of, like balance that out with being able to offer fuel lock, but they don’t do the four cents off. Because that’s another point worth making in my world of fuel nerdery that there are certain ones; the Woolworths one I think is one, I haven’t checked that, but you get four cents off for having rewards card. I think it’s Caltex that are linked with Woolworths, and you get a further four cents off if you spend $5 or more in store. But normally, that sort of, doesn’t pay out whenever you have to buy something in store, the elevated prices of whatever you’re getting in store normally, cancel out any kind of financial advantage of having that four cents off a liter. So, the little things like that play into it and it was funny.
One of the things we did mention so through all those cycles, occasionally you get somebody who sticks out as not playing the game. And here in Brisbane, there’s one that I know of, which I have used if I’ve run out of fuel. And if the false sense of Puma is still higher than Keith Mackay at Red Hill, who does his flat, he has a flat level price that he tries to change very infrequently. And so sometimes, he’s for instance, is $1.79 At the moment, so he’s a good 16 cents less than most. And so that’s the place to go for fuel if you feel conscious and having to fill up at this time. So, I want to give a shout out to Keith Mackay for sort of, being an independent out there.
Gene Tunny 39:36
What’s the problem? I mean, because it’s on a busy road and not everyone’s going on Waterworks road, you sort of, have to be going past Keith’s place for it to work for you to get there. Is that right for it to be economic for you or optimal? No, for anyone else?
Tim Hughes 39:52
For anyone, you have to go in person. You have to be going the right direction for that particular, I guess is the same for a lot of all analysts shorter corner. That’s pretty much the same for anybody getting fuel. If you’re on the wrong side of the road, you’re not going to go there.
Gene Tunny 40:06
But there are fewer servos here in Australia than there were 20 or 30 years ago. That’s a fact. I mean, I remember seeing a chart and in an ACCC report years ago when I was in Treasury, and I think, I don’t know the exact numbers, but at one time, there would have been 15,000, maybe, and then it’s well below 10,000 now, in terms of retail outlets in Australia.
Tim Hughes 40:29
Well, we can get onto that in a sec, because I imagine will change with part of the landscape, moving towards EVs that’s going to be impacted, massively.
Gene Tunny 40:41
Oh, yeah, well. That’s right, all of that space that’s currently devoted to petrol stations to their forecourts, we may not need that anymore but let’s see. We should move on to that. Because we’ve had a good 41 minutes or so, so far of chat. So, we’re going to get on to EVs, which was one of the key things you’re interested in. But that fuel price cycle stuff, that’s fascinating, isn’t it?
Tim Hughes 41:09
Yeah. I just want to add with Keith Mackay, his main gig is tyres, which I think, he’s not there as a fuel guy. But it’s interesting and nice to see that somebody isn’t affected by the, the cycle as much or as standing up to the cycle and just sort of, leveling out.
Gene Tunny 41:27
Yeah, so it sounds like he’s willing to; he wants to offer a service to people in local area. He’s not as motivated by profit as a lot of the other retailers, or maybe he’s trying to profit in another way.
Tim Hughes 41:44
I think it’s his main gig. So, it’s just part of what he does, but like, it’s not a main one. But we’ll have to get Keith on here one day to explain.
Gene Tunny 41:53
I’d be interested in his logic and also, what does he think of this whole fuel price cycle? How does it work? Does he have any insight? We’d like to know.
Okay, we’ll take a short break here for a word from our sponsor.
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Gene Tunny 42:38
Now back to the show.
We better move on to EVs, Tim. Okay, so you had some questions about EVs. So, do they reduce greenhouse gas emissions? I mean, it’s a key one.
Tim Hughes 42:53
I think what it was is like, looking at the whole process, from the making of the EV, to any waste products to them, the end life of an EV. So, the amount of, lithium being one, there’s a lot of resources needed; a lot of resources that go into making an electric vehicle. Yeah, they still have to be dug out of the ground, like, you know, 200 kilos of
Gene Tunny 43:19
Copper too, it’s got copper in there?
Tim Hughes 43:23
Yeah, I’ve only seen this from one source. So, this is unverified and people will know far more about it than I. But clearly, there’s an environmental cost of building an electric vehicle. There’s an environmental cost of running an electric vehicle; obviously we’ve discussed, you know, the fuel source of producing that energy, and in this transition phase, and that’s going to be coal or gas, or whatever, it may be some, you know, part of it would be solar or clean, but certainly not all of it. We’re not there yet with that capability.
I imagined that the future, ideally, would be a point in the future where we can do all of our electricity needs, and including the ability to power electric vehicles from clean energy. So, that I imagine is, you know, that’s a worthy place to head towards. And that transition phase is going to be a certain period of time where we do need fossil fuels of some sort, like coal and gas or whatever to get us to that point. And that infrastructure is going to change massively in that period of time.
Gene Tunny 44:26
Yeah, okay. So, just on EVs, I think it’s difficult to say but all of the credible studies I’ve seen suggests that they do result in lower emissions and then, they’re better for the environment than petrol driven vehicles. I think we can confidently say that.
There’s a Queensland Government website shifting to zero emissions vehicles. I’ll put a link in the show notes and it says across Australia, battery electric vehicles, so, your Tesla’s, emit on average, 29 to 41% less lifecycle emissions than a typical fossil fueled vehicle for every kilometer driven in Australia. And then the extent to which electric vehicles can lower emissions varies depending on which state and territory you live in, much depends on how much electricity is generated from renewable sources, such as solar, wind, and hydro. So, my interpretation of less lifecycle emissions means that they should have taken into account the manufacturing process, but look, that’s not guaranteed. So, I’d have to dig more into their sources. But I’d be fairly confident in saying that they’re better for the environment than petrol powered vehicles, I think that’s pretty clear. The problem is that they’re still so costly, and they’re just not economic for most consumers yet.
Tim Hughes 45:45
Yeah. And the thing is also that we would hopefully become more efficient in the manufacturing of electric vehicles, you know, in the manufacturing of batteries, and the disposal of batteries and other parts of that whole process when it comes to it.
Gene Tunny 46:03
I think all those costs are coming down. Before battery technology, I don’t think it’s improving fast enough. Maybe it is for cars. But one of the issues with batteries is that we really need them to back up the electricity grid, we really need them to be able to absorb the solar energy that comes during the day, and then allow us to power the country during the peak periods. That’s one of the big challenges we’ve got at the moment. I mean, we need more Tesla power walls, and we need big sort of, batteries across the suburbs. Really, we need big Tesla Powerwall type batteries in local areas.
Tim Hughes 46:50
And the charging time as well. Obviously, when you fill up with fuel, it’s relatively quick, five minutes and you normally done; 10 minutes tops, if you’re getting a cookies and cream connoisseur from the freezer. But I know I’m fully behind this move towards greener energy. And I think it’s really exciting to see how quickly it’s moving. But it’s that transition phase we’ve mentioned, which seems to be happening organically anyway, because it appears that people are able to charge EVs at the moment and that sort of, they’re selling more EVs. So, it seems to be the way this is happening, you know, appears to be working, but for everyone to be expected to have an EV or the majority of people. Clearly the infrastructure is a long way from being what it needs to be.
Gene Tunny 47:43
Yeah, we could talk about that in a minute. So, just on this is happening quickly. Look, the growth rate is, is high. I think they’re growing; I don’t know 200%. EV sales have grown by some really high rate over the last few years in Australia. But, so in the first half of 2021, there were 8,698 EVs sold in Australia. That compares with 6900 EVs sold in 2020. I think a stat I saw was that there’s been 40,000 electric vehicles sold in Australia since over the last 10 years or whatever the period was. But look, we have to compare that with 20 million registered motor vehicles in Australia, right? So, it’s really small relative to the total stock. It’s going to take a long time, decades for EVs to become the predominant vehicle type in Australia. And we’re actually a global Lagarde. This is according to a Grattan Institute report. The Grattan car plan Australia is a global laggard on electric vehicles. So, electric vehicle sales as a proportion of new vehicle sales in 2020. Australia was 0.78%, United States, 2.3%, global average 4.2% China 6.2%, Sweden 32.2%, Iceland 45%, Norway 74.8%.
Tim Hughes 49:15
Iceland makes sense. So, because small place, they can be far more agile with this kind of infrastructure and technology. And the energy that they have at their disposal with geothermal energy is just enormous. I mean, that just drill down and away you go.
Gene Tunny 49:31
Well, that’s better as a renewable, is it renewable, or whatever it is. I mean, it’s greenhouse friendly. It’s better for the environment than fossil fuels. But that’s a more constant source of energy, isn’t it? than say, wind or solar, the problem we’ve got is, the renewable energy sources, we’ve got are intermittent
Tim Hughes 49:52
Yeah, and the geothermal, from what my understanding is very stable and it’s 24/7.
Gene Tunny 50:00
Yeah, I need to get an engineer on here to explain it all. But this is a challenge with trying to understand what’s going on and this whole debate. There are all these engineering issues and scientific issues that it’s challenging for any economist to comment on.
Tim Hughes 50:17
And also, after so with Iceland, they do have the possibility of something cataclysmic happening as well over there. I think anywhere where you’ve got geothermal availability, you’ve got the possibility of something crazy happening.
Gene Tunny 50:30
And I think the fact that it’s a small place to means they don’t have that range anxiety, which is a big issue in Australia, where you could be driving hundreds of kilometers to your next destination, particularly if you’re in the outback. Or if you’re in regional Queensland and New South Wales, you might have to travel 200-300 kilometers to the next town. And you’d probably rather have a petrol driven vehicle with a big tank than an EV which, I mean, what’s the range? Is it 300 kilometers maybe? I’m trying to remember; I hope to look it up. But I know that’s an issue here in Australia. I know that EVs are getting better at that. But there are some people still are concerned about whether they can go the distance, so to speak. But then look, Norway is a big place and they seem perfectly comfortable. So, they’ve obviously set themselves up well, with the necessary infrastructure.
Now there are two more issues I want to chat about, because we’re sort of, approaching the time limit. You want to talk about how much more energy is required? There is just quite a bit more. There was a report in Drive Magazine that suggested that it could be equivalent to 12 million more houses. So, like one new electric vehicle is equivalent to a house. And I was struggling to find a good figure for the proportion of electricity that’s consumed by households compared with business and industry. But it’s going to be a fraction of the title. So, it’s not as if we’re going to double the amount of electricity needed. But it could be 50% or something. Yeah, I think it’s probably Yeah, maybe 30 to 40%, I think I saw an estimate. So, we’ll need 40% More energy, electricity. And yeah, the challenge is that at the moment where we’ve got all of this coal fired power stations that are retiring or projected to retire over the next two decades, and we’ve got a challenge, just replacing that capacity with renewables. And doing that in a way that we don’t screw up the liability of the energy system, where we’d end up having blackouts and all that; we need to avoid that with the firming with the battery power. If battery technology gets cheap enough that everyone can have a Tesla Powerwall, or whatever the competitor’s product is, if we can have grid level storage, big batteries dotted around the suburbs, or if we have more pumped hydro, that’s a challenge because environmental considerations, raising dam walls building new dams, I mean, that’s, that’s not going to be popular.
Tim Hughes 53:16
All comes back to energy at that every point really, isn’t it? We’re going to get our energy from and what’s the most efficient and clean way of getting that energy? And to be able to increase the capacity.
Gene Tunny 53:28
But we do need more, we’re going to need more energy for EVs. The authorities are aware of this. So, the Australian energy market commission published a paper in 2020, that dealt with this issue. And I’ll put a link in the show notes. They had a paper integrating electric vehicles into the power system. And its press release to the AMC says Australia needs a forward-thinking plan to get the energy system market ready for an electric vehicle future. Now, are we going to get that forward thinking plan? I don’t know. We’ve had a lot of problems in Australia getting an energy policy that makes sense; that sensible that everyone agrees on. I mean, we’ve had the climate wars, the big debates over climate change policy. This is going to be a big challenge. But look, people are aware of it. They know it’s an issue. There’s an issue with apartment buildings for sure. So, in that drive magazine article I mentioned, electric cars could have big impact on Australia’s energy supply. They quote this Mark Hartje, who’s CEO of charging installation company, Harman electric. His business regularly encountered developers who are unaware of the demands electric car charging good place on energy supply. One of the issues in this building we’re working on is the amount of power they have available. It sounds like a lot, but it’s running lifts, a lot in aircon, so the building doesn’t have the capacity to provide any more energy and we could burn the substation down. So, not good.
So, he claimed the risks are high developers and body corporates were dealing with don’t really realize it’s an issue until we tell them. It will be like the pink bats cladding issue, once a couple of buildings go up in flames, they’ll do something. And then what he’s saying is that as a result, our chargers have automatic load management. So, if demand gets too high, like when all the air cons on the Chargers will throttle back, how we notify owners, we’re still not entirely sure about I think what he’s saying is that, yeah, basically what’ll happen is if there’s always EVs getting charged the system, there’s some intelligent system that is, an IT there that will just throttle, that turn the power down. So, it’ll shut down some of the EVS or the charging or shut down some air cons, or they’ll have to manage that it’ll cause all sorts of problems.
Tim Hughes 55:55
And, of course, this is a problem that’s not currently there. So, it’s, like, you know, the general population, we’re not great at dealing with new problems, like we, you know, like things to get easier and better. So, it is, I mean, I can only feel that whatever these issues are, that they will get sorted out, you know, it seems to be that we’re on this path towards electric vehicles. And, you know, we’re moving fairly quickly in that way, even though those percentages that you talked about are really very small. Well, percentages of how many electric vehicles we have actually have here. It’s not a lot. So, like, we’re massively predominantly having fuel driven cars. But the changes that we’ll need to make, I mean, of course, all of this stuff doesn’t happen with everything in place, you know, like it evolves and the challenges get met along the way. So, clearly, there are some big challenges here. And I’ve got no doubt that they’ll get met, which will be really interesting to sort of, see, because there will be some challenges, as we’ve outlined, with getting these EVs powered for everybody.
Gene Tunny 57:04
Yeah, and bringing them down. So, they’re cost effective, and people can purchase them. One of the challenges, or one of the reasons that they’re so expensive, is that these companies are making the EVs are trying to recover all of the R&D that they’ve spent developing the EV.
Tim Hughes 57:22
The last two years have been felt, of course, with supply of any new vehicles. That is still getting caught up with that.
Gene Tunny 57:30
Title mess, supply chain problem;
Tim Hughes 57:33
It will be really interesting to see how this changes and just want to briefly mention on that, like, we’re talking about the infrastructure changing. And the amount of fuel stations that there are here at some point, those fuel stations just become charging stations, then that infrastructure doesn’t necessarily change too much, but they’re just going to be selling, because they’ll have to sell it at that point to recharge, you’re not going to get free electricity to charge your EV as an ongoing basis. I think that’s just a bit of a perk to get people. Right. So, Tesla are doing it’ll happen at some point. That’s not going to continue.
Gene Tunny 58:10
Well, if you’re offering that if you’ve got your recharging station, then that’s taking up land. And yeah, you’ll need to;
Tim Hughes 58:16
Somebody’s got to pay for that, no matter how its generated. But I’m sure it’ll get worked out. But it’ll be interesting to see how all of all of this unfolds.
Gene Tunny 58:25
Exactly. Okay. Just one more thing. One of the issues that economists are thinking about at the moment is, as we move away from petrol driven vehicles, we’re going to get less revenue from fuel excise here in Australia. So, that’s currently bringing in, well, before we cut the rate temporarily, I think it was running at about 10 billion per annum or something like that. I mean, it’s, it’s a big amount of money. I’ll put the exact figure in the show notes; might be 11 billion, there was a great article by John Freebairn an economist at University of Melbourne. What is petrol excise? And why does Australia have it, anyway? I’ll link to that in the show notes.
So, there’s a big debate about well, how do we make up for that revenue? Should we have an electric vehicle tax, as Victoria has implemented? There’s currently a high court case on that. I think the Commonwealth is taking them to court and say no, we don’t want you to have that. That’s not the right way to go about it. And where economists are going is that, that’s probably not a good idea. Because at the moment, we want to encourage people to take up EVs. So, you don’t want to go and tax them. But there is a legitimate debate about how we charge for the use of roads and the damage that’s done for roads and the fact that roads can be congested at times. So, there’s a big debate about road user charging. And so there’s a lot of thinking going on about that. And that’s something I’ll try and cover with Marian Terrell from Grattan Institute in a future episode. She’s written a great piece in the financial review this week on that. She’s opposed to that EV tax in Victoria as I am, I think we should take the opportunity to think, more laterally; think about what’s the appropriate way to pay for the roads. And so, what John Freebairn writes in his article is that in an ideal world, we would charge explicitly for road use pollution and congestion in the cities during peak hours. Fuel excise is an increasingly inappropriate way of charging for road use. Because more and more cars, including hybrids are using less fuel per kilometer, and some, including all electric vehicles are using none. So, look, I don’t know how we do this, we probably need some sort of, chip or tag to keep track of you.
And then the one of the ideas is that on a really congested road, you could charge people if they’re driving on that road. You know how there’s the congestion charge in London? I think we were probably talking about that before you got standby.
Consider a London and getting the thing. Yeah. So, yeah. So, there’s a lot of thinking going on about what’s the right way to charge for roads. So, I’ll cover that in a future episode. Does that makes sense because we are losing fuel excise and a lot of people will point to the fact, that’s partly paying for the roads well sort of, I mean, it goes into the big pot of money. That is a whole bunch of things. Money is fungible that. Okay, it’s a legitimate thing to be to think about that. Yeah, we’re going to be getting less revenue to pay for services, including roads, goods and services.
Tim Hughes 1:01:53
Because it gets complex, doesn’t it? Like HGVs and obviously, you know, different size vehicles and heavy vehicles, potentially do more damage to the road.
Gene Tunny 1:02:07
There’s a system for charging heavy vehicles. We’ve got that. Yeah.
Tim Hughes 1:02:11
So, it makes sense that it would be done on a per kilometer basis. I don’t know. I mean, I’m also in favor of less, certainly personal tracking, you know, over the last two years, the whole of the pandemic and throw no liberalism and freedoms. That’s another conversation as well. I think it’s really hard to give up ground on personal movement and you know with your vehicle, although that would be the fairest way. If you travel a kilometer, you pay X amount per kilometer.
Gene Tunny 1:02:43
Very good, Tim, I should have thought about myself. As someone who just went to the Friedman conference, in July in Sydney, as someone who’s had a long-term association with center for Independent Studies, which is a great proponent of liberty in Australia. I think I should have thought of that point myself. It’s a very good point. I mean, it’s tracking to be able to implement this road user charging system, you need to have some way of tracking people as they drive.
Tim Hughes, we better wrap up. Any final words before we close?
Tim Hughes 1:03:12
No. Just that it’s a fascinating subject that I know a lot of people talk about, it comes up in conversations everywhere. We’ve done just a broad overview of this, to the best of our knowledge at the time, but these are individually little areas that we’ve talked about, that will dive deeper with industry representatives, or colleagues or people.
Gene Tunny 1:03:35
And experts, yeah. I’ll try and get some EV experts on charging the energy network. Because, there’s so much complexity here, you almost have to be an engineer, an economist, a philosopher in a way as well, to try and grapple with these issues.
Tim Hughes 1:03:51
And as a consumer, you sort of, like, see this unfolding. And it is really interesting. And my driving principle, for me, personally, is about, you know, the environment and what’s best for the environment. So, I’m interested to see that discussion further, with the greenest possible solution to how we move from A to B and back to A again.
Gene Tunny 1:04:13
Okay, so long as it doesn’t cost us too much. We want it cost effective, but, we want to look after the environment, that’s right. We want to make sure it’s done in the most cost-effective way. We want to minimize the pain going forward.
Tim Hughes 1:04:28
It’s got to be practical, you got to be able to do it, you know, like the green options now, which is to walk or cycle, you know, but that’s not practical for me to by the time we get to work, I’d have to turn around and go back again.
Gene Tunny 1:04:41
All the way was set up as cities. We’re all living in these big cities, and we’re all time constrained. Yeah.
Tim Hughes 1:04:48
So, the overriding principle for me anyway, like is, what’s going to be best for the planet in our hippie at heart, and, but you got to be realistic as well. But I’m excited because that’s the way that EVs seem to be heading. And that can obviously be tweaked and fine-tuned to be better and better and more efficient and less impact on the environment as we move ahead.
Gene Tunny 1:05:13
Okay. Tim Hughes, is it’s been great chatting with you. We always enjoy our conversations. I think you’ve raised some really important issues here. And yeah, really enjoyed our conversation. And we’ll try and get some experts and other industry people on in the future and we can have a further chat with them. So, thank you.
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