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For a long time, Tesla has been the electric car in Hong Kong. Annual sales of other brands could not compete with Tesla's in a month – until the local government withdrew a generous tax incentive.
In April 2017, more than two years after the city reduced its tax break on the purchase of electric cars, only 180 new Teslas were registered with the Hong Kong Department of Transportation (HKTD). The new policy, aimed at reducing traffic jams, capped an exemption from the heavy vehicle registration tax in Hong Kong that could reach the price of a sticker, and made a new Model S more than 1.5 times more expensive.
Tesla saw a sharp increase in the number of people rushing to buy a Tesla car in March of that year, when the total waiver meant that the price was actually less than $ 75,000 (HK $ 570,000). No less than 2,939 new cars were registered this month, followed by just 32 for the rest of the year.
Registrations are a decent substitute for direct sales because cars must be registered to drive on the road. But Tesla also sells used cars, which are not taken into account in these data. The reduction in the tax rebate may have favored their sales – a five-year-old Model S and traveling some 25,000 km on a new price. Tesla did not immediately respond to questions about the discount on sales and the data on used car sales.
Hong Kong should be a very good place for the adoption of high-end electric cars because its limited size does not mean a problem, while the city's wealth and love of luxury mean sought-after cars like Mercedes-Benz. Benz and BMW. all over. Tesla's founder, Elon Musk, once called it a "flagship city" for electric cars.
However, thanks to the city's well-connected public transport system, car ownership is not really necessary: the number of cars in a city of seven million alone was growing. at about 105 vehicles per 1,000 inhabitants (pdf, p.1) starting in 2018. China, the world's largest automobile market, but also a less affluent location, has 172 vehicles per 1,000 inhabitants.
Despite the reduction in tax relief, electric vehicle sales increased in 2017 as people rushed to make their purchases before the deadline. Until then, they have remained largely static, although the reduced tax relief for first-time EV buyers will remain in place until 2021. Thanks to its lead, Tesla accounts for nearly half of the 11,500 electric cars registered until May.
Since tax policy has changed, Hyundai in Korea and Nissan in Japan are doing better. In May, Nissan and Hyundai registered 109 and 31 electric cars respectively in Hong Kong, while Tesla registered none.
Tesla is now focusing on a more favorable political environment, building a plant in Shanghai, where several state-owned banks have offered loans to build the plant at a lower interest rate than the one-year rate issued by China's central bank. Currently, all Tesla cars sold in China are imported and subject to a 15% import duty, as well as a 10% purchase tax, which does not apply to locally manufactured electric vehicles.
The plant, the first to be fully foreign-controlled after China eased investment rules in the sector, is expected to release its first car in November in a market where customers still benefit from tax relief for the country. buying domestic electric cars, although subsidies to builders go away.
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