Hong Kong removes tax breaks for electric cars

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According to Wall Street Journal, Tesla sales in Hong Kong dramatically went down due to city’s decision to remove tax break for electric vehicles. Also The Journal’s data analysis show that number of new Tesla Model S sedans and Model X SUVs were registered  in April is zero, after the vehicle-registration tax break for electrics was eliminated. And in May there are records of just five electric cars registered.

 

The Journal also reported that before tax break was removed, until April the 1st, 2,939 Tesla vehicles were registered in March and almost 3,700 got in the department’s books for the first quarter of 2017. Tax break removal was announced in February.

 

Tesla representative said to Business Insider that company was grateful for government policies because “it was easier for more people to buy electric vehicles” and adds that company did not depend on tax break.

 

“In China, for example, we’ve tripled our revenue from 2015 to 2016 despite a massive tariff and no incentives,” said the representative “At the end of the day, when people love something, they buy it.”

 

“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.”

 

Global sales of the company have mirrored the alteration in fortunes in Hong Kong. So far this was the best period for Tesla ever, just in first quarter of 2017 they shipped out 25,000 units. In share price they surpassed Ford and are somewhere near General Motors considering the capitalization of market. In second quarter they had a fall in global sales down to 22,000.

 

Company revealed the first series of their Model 3 cars, which are cheaper versions, will be released around the end of this month. Car costs 35,000$, but it could open a way for customers towards some expensive models.

 

Situation in Hong Kong reminds that electric vehicle sales could depend on government encouragement for cleaner transport technology. Fox Business says it is a major market for luxury cars although the region has only 7.3 million people. Company representative said they are not very concerned 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.”