Caltex optimises core business plan for longer term

Over the short term reduced fuel consumption, and in the longer term EVs and autonomous vehicles, will impact Caltex, says its chairman Greig Gailey.

Angela Macdonald-Smith reports in the Financial Review:  ‘Caltex develops electric car game plan’ that Gailey says the main challenge in the short term is an expected reduction in fuel consumption in the light vehicle market of about 5% by 2025 due to improvements in fuel efficiency – which would more than offset an expected increase in distance travelled by the average car – and in the longer term the challenges are EVs and autonomous vehicles. 

Gailey believes though that the company has many good years ahead before it will be confronted by the challenges, which Gailey deems important as it gives time to adapt, Smith reports.

For the time being though the oil company plans to build the business by expanding beyond the fuels and convenience retailing sector to take advantage of the changes being wrought on the sector by electric vehicles and self-driving cars.

“Now is the time to be developing a game plan to not only deal with the ultimate eventuality, but to seek out the opportunities that these changes present,” Gailey is quoted as saying in the article.

He says that Caltex does not expect big auto manufacturers to be producing a good mass-market electric car for a realistic price until the early 2020s, which will probably result in EV sales being about 10% of the light vehicle sector in 2020.

He adds that battery technology is improving dramatically but that the price will have to come down to make the cost of owning an electric vehicle comparable with the increasingly efficient internal combustion engine vehicles now rolling off production lines.

The advent of autonomous vehicles will probably change the whole concept of vehicle ownership, but a fully autonomous vehicle is probably still some way off as it will require artificial intelligence close to human levels, he says in the article.

Currently Caltex is rumoured to be running to buy Woolworths’ $11.6 billion petrol station network amid concerns of concentration in the market.