TRA - Turners Automotive Group [previously TNR - Turners Limited]

[Beagle]

I think its clear Turners are going to be selling whatever second hand cars are available on the market be they petrol, diesel or electric and that whatever propels them is only a fairly small part of the overall cost of the vehicle so the suggested possible radical halving of vehicle prices is extremely unlikely and even if ever achieved will be at some point far into the future. For example in a presentation to analysts today Ford are hoping to get the cost of battery power down from $160 a kw/hr to $90 kw/hr within the next decade....but I suspect the issue will be that consumers will demand longer range as EV's develop so the manufactured cost is still likely to go up due to almost every other one of the thousands of components that go into a vehicle going up and battery sizes increasing to meet increasing consumer expectations. Anyway...good thread here for discussing all things EV's I started years ago https://www.sharetrader.co.nz/showth...-turning-point

GNE running their Rankine units flat out on coal all winter, (estimated to burn 2,000,000 tons of coal this winter.).. to keep the lights on and Aucklanders EV's charged up. Hmmm

Can we please get back to discussing Turners ?

[Ggcc]

For increasing numbers of us, EVs are the present. I've had mine for nearly 4 years now, done over 100,000 kms. Cheap to run, no maintenance...

No road user charges either, but you have done more kms than me in four years. Im lucky to do 10,000 per year

On average, New Zealand men drive just over 12,000 km per driver per year, while women on average drive just over 8,000 km per driver per year. Approximately 61 percent of the total distance driven by New Zealanders in cars, vans, utes and SUVs, is by men.

[Ggcc]

Those sort of quotes have been widely discredited, as they include theoretical carbon costs of building and powering EVs (using hypothetical mix of energy sources), but don’t include all the carbon costs of building and powering ICE cars. The far most common error is neglecting the carbon costs of petrol. The error is they base it on the carbon emitted from burning petrol in the engine, and neglect to include all the carbon costs involved with the extraction, refining and transporting that petrol from all over the world to your cars petrol tank.

And there is no question mark about “disposal of batteries” - as every single EV battery cell that is judged to be no longer efficient enough to be used in an EV is eagerly repurposed by those after stationary power storage at a bargain price.

Most hypothesis use theoretical possibilities. Nothing is 100% correct with hypothesis.

What has been explained to me by multiple car enthusiasts. If you don't drive the KMs then your electric vehicle becomes more detrimental to the environment and more costly to the user.

[winner69]

If people only drove tractors I'm sure Turners would sell heaps of tractors.....and finance them and insure them

[Biscuit]

No road user charges either, but you have done more kms than me in four years. Im lucky to do 10,000 per year

Yes, KM count. Cost about 10 cents per km in depreciation so far, no road user charges and I charge up for free at work or supermarket. The present is the golden time for EVs eh! but they will own the future as well and Turners will do just as well out of EVs as ICEs, and probably better from both than from tractors.

[Beagle]

If people only drove tractors I'm sure Turners would sell heaps of tractors.....and finance them and insure them

I bought a few more this morning because your post sums it up nicely, its in a beautiful looking uptrend and the financial metrics and outlook look very attractive.

[Biscuit]

I bought a few more this morning because your post sums it up nicely, its in a beautiful looking uptrend and the financial metrics and outlook look very attractive.

Turners or EVs?

[toddhunter]

Hi Todd,

First let me thank you for another great post and clarification. I think your way to communicate with investors (and some traders ) like us is quite innovative (and as far as I know) quite unique. Efficient and addressing real concerns and issues. Great stuff!

Maybe one question re the cyclicality of the business ... it took markets in the 1920'íes less than a decade from 80% horse carts on the roads to 80% cars with combustion engines on the road - and in some markets the swap went even faster. I recon that this was a tough time for the sellers of horses and preloved carts ... and I recon that there was a high percentage of new vehicles on the road, given that due to the demand there would have been not many used vehicle with combustion engine available.

Now - this was 100 years ago, and nobody cares anymore - however I would expect a similar dynamics when EV's ultimately take over (and I don't think we will need to wait another decade to see that happening).

I do understand as well, that Turners can sell EV's as easy as cars with combustion engine. However - isn't it likely that there will be in the beginning of the EV tsunami just not enough used EV vehicles available but many more new cars (in percentage) on the roads? What happens if you can get a new and much more economical EV car for say $15,000 instead of the combustion engine version for 30,000? Would this cut into Turners business?

Anyway - just my thoughts ... and obviously - congratulations to Turners and its team for the recent results. Long may they continue!

Thanks Black Peter I actually enjoy the engagement and discussion on the company and strategy. I can’t believe more CEOs don’t involve themselves. It is a good way of getting to know what people are thinking about your company and put your own perspectives across.

My thoughts are similar to a number of people who have commented subsequently…

1. The change out to a full EV fleet will take decades. There are 4m cars in NZ give or take and in a normal year around 150k new cars sold. Even if every new car sold into NZ from this year was an EV it would take 25+ years to change the fleet out. This will happen over a long period of time. Also given NZ is a wafer of world market share and we are a RHD (right hand drive) country in a world dominated by LHD…we typically are bottom priority of any production allocation decisions.

1. The technology is rapidly evolving. EV battery tech is changing quickly (read about solid state batteries), the jury is still out on Hydrogen as well. I recently met with a large new car manufacturer MD who has a good line up of EV product coming in and his view was Hydrogen will win in the long term. But all this is just another barrier to people buying EVs because they are worried whatever they buy will rapidly become outdated.

1. The capital cost of the EVs are still too high. From our research, 60% of kiwis will spend less than $10k on a car and 80% will spend less than $20k. Low cost used EVs carry significant perceived risk around the battery quality and life.

1. The cost of EVs will drop…most likely driven by the Chinese brands. If they drop significantly, it may have an impact on prices of ICE used cars in the used space. Although the Government’s current Clean Car Standard is going to push used car prices up…another story. (Watch the Sunday program on TV1 this week) for more on this. Pricing has little impact on Turners given we buy and sell in the same market. We carry around 3 months stock at any one time and therefore have zero exposure to long term shifts in pricing. Our business is based on churn as a few have pointed out. We are completely agnostic about what type of car we sell , EV, ICE, hydrogen, big, small etc.

In my view the change out to EV will happen over a long period. Check out the actual EV numbers in the fleet here… https://www.transport.govt.nz/statis...ev-statistics/ in my view no real growth in the number being registered per month for 3 years.

Turners will continue to thrive no matter the mix of the fleet.

Thanks
Todd

[Beagle]

Turners or EVs?

LOL - Turners shares, (worth at least $4 right now in my carefully considered opinion) but I have registered my interest and will have a look at the new Kia EV6 GT due later this year. https://kia.co.nz/ev6-pre-registration/ No official pricing yet but the top spec GT is $58,000 pounds in the U.K. which suggests about $115K here. 0-100 k.p.h. in 3.5 seconds could be fun

As Todd has suggested above my main concern is no matter when you pull the trigger on a new EV with a year or two it will be significantly outdated which has serious repercussions in regard to expected depreciation rates. Its almost certain the Govt will have to apply RUC to EV's in the near future too so the apparent operational cost savings at present are somewhat illusionary in the medium term in my opinion.

[Habits]

LOL - Turners shares, (worth at least $4 right now in my carefully considered opinion) but I have registered my interest and will have a look at the new Kia EV6 GT due later this year. https://kia.co.nz/ev6-pre-registration/ No official pricing yet but the top spec GT is $58,000 pounds in the U.K. which suggests about $115K here. 0-100 k.p.h. in 3.5 seconds could be fun

As Todd has suggested above my main concern is no matter when you pull the trigger on a new EV with a year or two it will be significantly outdated which has serious repercussions in regard to expected depreciation rates. Its almost certain the Govt will have to apply RUC to EV's in the near future too so the apparent operational cost savings at present are somewhat illusionary in the medium term in my opinion.

Petrol/EV Hybrid Kia Niro is a very good option. Save gas and no RUC