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Tesla Sales in Hong Kong Dry Up After Gov't Drops Tax Break (axios.com)
Tesla couldn't sell a single car in Hong Kong in April after the government dropped a tax break for electric cars on April 1, the Wall St Journal reports citing government data. From the report: "as a result of the new policy, the cost of a basic Tesla Model S four-door car in Hong Konghas effectively risen to around $130,000 from less than $75,000." There were 2,939 Tesla's registered in Hong Kong as of April. Further reading: Nobody in Hong Kong wants a Tesla anymore.
When most US readers read "Tax Break" they think that someone bought a car that was priced "X" and instead, paid "X-Y" where Y is some subsidy the Government offers...or alternatively they imagine that ALL cars cost "X+Y" where Y is a uniform tax. That's not the case in Hong Kong. In Hong Kong, a car that is imported from overseas is subject to a First Registration tax, that tax STARTS at 40% of the car's value and goes up from there "X+0.4X". This is a tax only on imported vehicles and previously all EV were exempt from it which put Tesla (and other imported EV) on level playing field with domestic Hong Kong vehicles. But that exemption has been removed for EV over a certain threshold, of which Tesla lands above. So now Tesla costs "X+Y" where Y is a tax that no domestic vehicles have to pay. So yes, Tesla is on an even playing field with other imports, but not with all other cars.
So the folks saying "Ha! See, Tesla can't compete with other cars without a special exemption!" are ignoring that Tesla is now working at a handicap, not a level playing field.
As others have pointed out, it's also likely that anyone who had the spare cash laying around who was planning on buying a Tesla, just did so prior to this phase out. People with lots of money aren't COMPLETELY oblivious to price fluctuations...especially when announced in advance.
FYI I currently live in HK.
Taxes are very high on new cars, at least 40%. The government previously wanted to boost electrical vehicles and thus gave the tax break for EVs.
In fact EVs are ideal for HK. Never a range problem, and people in general are very positive about there being no emissions.
Personally I think it is a pity that they stopped this tax break, it gave a great signal to the community. They could have reduced the tax to 20%, still a difference. Eventually Tesla and otther EV sales will pickup again of course but HK could have been at the spearhead of the move to zero emission cars countries.