The Hong Kong government’s decision to scrap a tax break for
electric vehicles has reportedly had a dramatic effect on sales
of Tesla cars in the city.
Data analysis from The Wall Street Journal has
shown that zero new Tesla Model S sedans and Model X SUVs were
registered with the transport department in April, after the
vehicle registration tax waiver for electrics was discontinued at
the start of that month.
Following that, just five privately owned electric cars were
registered in May.
The WSJ reported a sales surge just
before the April 1 rule change, with 2,939 Tesla vehicles
registered in March and nearly 3,700 entering the department’s
books for the first quarter of 2017. The end of the tax break was
announced in February.
A Tesla spokesperson told Business Insider that although it
welcomes government policies that “make it easier for more people
to buy electric vehicles” the company is not dependent on tax
concessions for its livelihood.
“In China, for example, we’ve tripled our revenue from 2015 to
2016 despite a massive tariff and no incentives. At the end of
the day, when people love something, they buy it,” said the
“Hong Kong remains a significant market for Tesla and we continue
to sell cars there each quarter. When the Hong Kong Government
reduced the tax exemption for electric vehicles and increased the
cost of our cars by nearly 100%, it’s to be expected that demand
will be impacted in the period immediately following the change,
particularly because of the large number who bought just prior to
the change being implemented.”
Tesla’s global sales have somewhat mirrored the fluctuation in
fortunes in Hong Kong. The first
quarter of the year saw the electric car
maker have its best period ever, shipping out 25,000 units and
sending its share price rocketing
upwards to surpass Ford and close in on General
Motors in market capitalisation. Then for
the second quarter, global sales reduced to 22,000.
Tesla just last week announced the first
batch of its cheaper Model 3 carswould be released at the end
this month. The $US35,000 vehicle may be dampening appetite for
the far more expensive existing models.
The Hong Kong experience also shows how sensitive electric
vehicle sales are to government incentives for cleaner transport
technology. The region only has 7.3 million people but Fox
Business reports it is a significant
market for luxury cars.
The Tesla spokesperson said that the company doesn’t hold
long-term concerns over sales in Hong Kong.
“Tesla absolutely believes that the Hong Kong market will
continue to be very strong over the long-term because it’s clear
that the people in Hong Kong love our cars.”
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