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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.
Everyone who wanted one in the short term snapped them up right before the tax went into effect.
Most Hong Kong residents would not buy a car unless it can go completely across the entire country at least five times in one full charge or full tank of gas. No way Tesla could do it. Tesla might sell in a small place like USA but on a large country like Hong Kong, no way it would sell.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
It costs so much because of the unreasonable import fee of 50% being placed on these items. It is forcing Tesla to build a plant in mainland China if they want to sell cars there.
If only our own government could institute a similar policy on chinese products to protect american industries...
The base price for a Model S in the US is $69,500 before any local or federal incentives. At nearly twice that price now I can see why people in Hong Kong might be less interested than before. Would be be cheaper to buy one in the US and ship it to Hong Kong, or would the import duties kill any savings?
Did the WSJ really publish a story based on just a single month of data showing a fall in sales?? That is ridiculous.
From the article
"There were 2,939 first-time Tesla registrations in March just before the new tax rules kicked in, around five times that of the number in February."
everybody remotely considering buying one, just bought them before the price went up. Check back in six months to a year to see what the real effect is.
...protect american industries...
From what? Its own greed, and avarice? Americans created the problem. Americans shipped American industry jobs overseas. Lets see what Americans do now.
Americans shipped American industry jobs overseas in part because there was low or no tariffs on imports, and the labor overseas is super cheap.
If GM saves themselves $5,000 per car in labor and whatnot by building it in Mexico, and there's no import fees.. then why wouldn't they move to Mexico? If on the other hand the US Govt charged a $8,000 import fee for Mexican-based cars well.. now GM isn't going to be so happy to move. Even if the US Govt only charged a $4000 import fee (still saving GM $1000 per car,) they have to then compare the expected long-term savings against the immediate cost of having to build the factories and re-hire, re-train or re-locate employees.
Now to that first approximation, Trump's "omg lets stop all imports!" logic actually makes a good amount of sense. Unfortunately there's other issues at stake here. Yes, Detroit gets screwed when GM closes a plant and relocates it to Mexico in order to save $5000 per car. But at the same time, everyone who doesn't live in Detroit is probably going to see at least a $4000 drop in price when they go to buy their next car, since a good portion of GM's savings will indeed get passed on to the consumer in order to undercut Ford or whoever (or compete with them, if Ford had moved first.)
Think of how many people in the US today would be screwed if we imposed massive tariffs on Chinese imports and those people couldn't buy cheap shit from Walmart anymore. Its easy to say that you should be buying quality American items in the first place.. when you're living comfortably in the middle class or higher.
But when you have a monthly budget of say $300 for food, clothes and other living expenses.. it becomes a hell of a lot easier to justify buying a $15 pair of crap jeans made by 12 year olds in Bangladesh rather than the $60 equivalent made in the USA, even if you're fully aware that they're crap and won't last as long and whatnot.
Basically, if Trump chooses the import tariffs as the one thing he'll actually manage to succeed at.. be prepared for a significantly increased cost of living and an equally increased poverty rate. These things are somewhat self-correcting in the long term but that's a lot of suffering in the meantime (factories don't get built and restarted overnight!) and even after the self-corrections the US would be comparably further behind other countries.
International trade because its a net benefit to all parties (ignoring things like arms trading in dictatorships which doesn't really follow economic principles so much as asshole principles.) And like the "return to coal" crap Trump's always spouting, his lack of deeper understanding may indeed benefit a few thousand local workers but it will be at the expense of everybody else in the country.
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.