Electric car hype doesn’t match reality

Simon Evans

Oct 2, 2019

AFR

The boss of $2 billion ASX-listed car parts group Bapcor Ltd says the hype surrounding the emergence of electric vehicles simply doesn’t match the reality in Australia.

Bapcor chief executive Darryl Abotomey said electric vehicles made up less than 0.5 per cent of the total number of cars on Australian roads in 2018 and they won’t begin making serious inroads for some years to come.

The CEO of car parts group Bapcor Ltd, Darryl Abotomey, says the hype does not match the reality when it comes to electric cars in Australia. Paul Harris

“The hype does not match the reality,” Mr Abotomey said in the group’s annual report released on Wednesday.

He said he was constantly questioned by shareholders and investors about the potential for a big shift in dynamics, but reality didn’t match the perceptions. Electric vehicles accounted for less than 1 per cent of new vehicle sales.

Mr Abotomey said on current projections it was unlikely that electric vehicles would reach about 50 per cent of the total number of vehicles on Australian roads until well into the 2040s.

There are about 18 million cars on Australian roads, with around 1 million new vehicles sold annually, although the new car market has been soft for 17 months in a row.

The car parts group supplies 30,000 mechanics’ workshops across Australia with 500,000 different automotive components and spare parts.

It also has a smaller retail arm under the Autobarn brand which sells automotive products to home enthusiasts.

Across the group, it runs 940 outlets under the brands including Burson, Autobarn, Autopro, Midas and Sprint Auto Parts. About 58 per cent of Bapcor’s profits stem from the trade operations that supply mechanics’ workshops.

Bapcor’s main rivals in retail include Repco and Super Retail Group’s Supercheap Auto chain.

Mr Abotomey said the company was well-positioned to adapt to future shifts in the market because of its electrical and electronics wholesale products businesses.

He said trading in the first few months of 2019-2020 had been in line with expectations and net profit after tax growth was expected to be in the ”mid to high single digits”.

The share price, which slipped by 4.5 per cent on Wednesday on a day when the overall sharemarket dropped sharply, has risen about 17 per cent since mid-August as the outlook brightened after rare bouts of softness in November and December of 2018 and January 2019.

Bapcor, which was known as Burson Group until a name change in 2016, had a market capitalisation of $300 million when it listed in 2014 with an issue price of $1.82.