The internal combustion engine faces its most serious threat in a century. The Shanghai Motor Show recently showcased 32 new models of electric car from Chinese and international manufacturers. The worlds second largest carmaker, Volkswagen, already sells six electric models in China and, within the next few years, plans to increase its fleet to 20.
Toyota has gone a step further, releasing details of the first commercial hydrogen car, the Mirai (pictured), which will go on sale in December for around $70,000.
Petrol engines wont die soon or easily but, with every major manufacturer in the world boasting an electric car program and prices tumbling, a turning point is near.
For Caltex, the largest service station owner in Australia, electric engines are one threat to volumes; the relentless efficiency gains of traditional engines are another.
Caltex reports that sales of unleaded fuel have been falling for years. Profits have risen thanks to higher margins from premium fuels and diesel volumes but those margins cant go up forever and diesel margins already appear unsustainably high.
A threat to one business is an opportunity for another. Fuel stations might one day face decline but, if electric vehicles take off, energy retailers like Origin and AGL will benefit enormously.
Households all over the country will park their car in their garage and plug it into the grid to recharge over night, allowing generators, currently dormant at night, to be utilized profitably. Electric cars, the scourge of petrol stations might just be the saviour of the troubled electricity sector.