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Businesses The Almighty Buck Transportation

Tesla Sales in Hong Kong Dry Up After Gov't Drops Tax Break (axios.com) 103

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.
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Tesla Sales in Hong Kong Dry Up After Gov't Drops Tax Break

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  • Or (Score:5, Insightful)

    by Anonymous Coward on Monday July 10, 2017 @04:43PM (#54781011)

    Everyone who wanted one in the short term snapped them up right before the tax went into effect.

    • Re:Or (Score:5, Insightful)

      by Albanach ( 527650 ) on Monday July 10, 2017 @05:03PM (#54781163) Homepage

      Exactly what the article says - there were five times as many registrations in March (the month before the rule went into effect) as in February. Hardly surprising that, when they did a half year worth of business in a month, they now see a decline.

      For some other manufacturers, a decline to zero might be more concerning. I expect in the current Tesla market with only luxury vehicles, the vast majority of customers don't need to wait one more paycheck to afford the purchase.

    • Another interesting factoid from the article. Hong Kong had 3,000 new electric car registrations in 2016. Tesla sold circa 3,500 cars in the first three months of 2017.

      The headline that nobody in Hong Kong wants a Tesla anymore might be hard to justify when we look at the data.

    • It still shows that demand is pretty weak for them. The problem with Hong Kong, and any of these super densely populated area is nobody has their own garage and home charging. It's up to the complex to provide them. Presumably most owners who would have a car have a designated space so putting them in is likely problematic without rethinking the parking layout, not to mention expensive.
    • by Desler ( 1608317 )

      Nice attempt at spin, but it still shows that signiificantly less people will buy one without subsidies.

    • Everyone who wanted one in the short term snapped them up right before the tax went into effect.

      There's definitely that going on, but not only was there a big fat goose egg for registrations in April, there were only 5 in May: http://www.investopedia.com/ne... [investopedia.com] Anyway you look at it, that's a huge drop off in demand because a government subsidy was taken away.

    • What Tesla did to soften the blow, was to register around 500 cars as owned by Tesla HK.

      So you can still buy a "used" Tesla with less than 20 miles on the clock, the 'one previous owner' being Tesla itself.

      Obviously this took quite a bit of investment, and won't last long, but it's managed to keep down the price of used Teslas for now.

  • by 140Mandak262Jamuna ( 970587 ) on Monday July 10, 2017 @04:48PM (#54781043) Journal
    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.
    • Hong Kong seems to be roughly 25 x 40 miles. The contiguous USA is roughly 2800 x 1600 miles.

      WTF are you talking about. Is this a weird way to attempt to explain that Hong Kong is now part of China instead of still separate?

    • by k6mfw ( 1182893 )
      oh man, I almost got taken in by this one and if so I'd be assigned the Whoosh Co. I'm thinking why would anyone buy a car of any sort in a congested place like HK. Even the airport is squeezed, there's many videos that landing a typical airliner is action and adventure (means need plenty of barf bags).
      • by slew ( 2918 )

        oh man, I almost got taken in by this one and if so I'd be assigned the Whoosh Co. I'm thinking why would anyone buy a car of any sort in a congested place like HK.

        Reminds me of one time when I visited my grandparents in HK as a kid (in the mid 1970's). He
        had use car from his job and wanted to drive us to go to dinner. Took about 20-mins and he dropped us off in front of the restaurant. With no place to park, he drove back to the house and walked back to the restaurant and joined us about 20-minutes later.

        Even the airport is squeezed, there's many videos that landing a typical airliner is action and adventure (means need plenty of barf bags).

        That was the old Kai Tak airport's infamous "checkerboard" approach [unforbiddingcity.com]. The new HKG international airport's over-water approach [hkatc.gov.hk] is pretty bog standard and relatively

      • There are places that getting to and from is a little more complicated than hopping on MTR. If you live on Conduit Road or the Peak, getting over to your yacht in Aberdeen can take far too long, especially when your maid is carrying all the groceries and won't ewalk any faster! Seriously though... having a car in Hong Kong means never being hot, wet, or having to stand. What is a month's salary on a car, anyway...
  • Fully electric cars with tolerable range (my made up bs threshold: 200+ mi) don't seem to be cheap enough to compete on their own merits yet... will probably be a few more years, but it's coming.
    • Fully electric cars with tolerable range (my made up bs threshold: 200+ mi) don't seem to be cheap enough to compete on their own merits yet... will probably be a few more years, but it's coming.

      Actually, China makes these already. And they're around $6000.

      In actual practice, people in Hong Kong going on a long trip would tend to use the very very fast High Speed Rail systems China and nearby countries have in place.

      Wake up, it's 2017, not 1997.

  • by tbq ( 874261 )
    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?
    • Well, cars in the US are dirt cheap. Even petrol cars. A Mustang 5.0 V8 Fastback is about 38.5k $ in the US, new. It is about 115k $ equivalent in euro in Holland. That, and 8.5 $ equivalent per gallon of gas. Americans have just really been spoiled when it comes to tax on cars, so it is hard to make a comparison. 'Twice as expensive as in the US' can still be a pretty sweet deal.
  • To me this is related tightly to why Elon Musk has publicly broken up with Trump over "climate" [slashdot.org]. If, as Trump thinks, climate is not really a big concern and the government will stop paying scientists to say, that it is, Tesla becomes just another car — and an expensive one at that...

  • by shilly ( 142940 ) on Monday July 10, 2017 @04:58PM (#54781125)

    Did the WSJ really publish a story based on just a single month of data showing a fall in sales?? That is ridiculous.

    • by drhamad ( 868567 )
      Meh, going to zero is a pretty interesting data point, even if it is only a month. I'm sure they'll publish more as more data comes out.
      • by shilly ( 142940 )

        Agree it's an interesting data point, but there's an awful lot of stew being cooked from that single oyster. It's really rather early to say that Tesla sales in HK have dried up with the removal of the tax break. And the last data point reported was April. There's been May and June since then -- surely the reporter could have gone and asked around to see if the story remained consistent, even if official figures are laggy.

  • by Anonymous Coward on Monday July 10, 2017 @05:00PM (#54781143)

    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.

  • When the hell did people start writing things in the "To Y from X"?
    It makes more sense to write "From X to Y".

    • It's a pun on the gameplan for Tesla models. The model S was first, we now have model 3 and X, and the final model is supposed to be the model Y.

      S3XY

  • by tempo36 ( 2382592 ) on Monday July 10, 2017 @10:54PM (#54783157)

    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.

    • 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.

      Also worth mentioning, most people in Hong Kong don't need cars anyway. The public transport is world class and being so small you can train/bus/walk or even taxi pretty much everywhere quicker and cheaper than driving.

  • Who cares? They are just a hair metal band who are well past their prime.

  • A pity (Score:4, Informative)

    by Camembert ( 2891457 ) on Tuesday July 11, 2017 @03:46AM (#54784145)
    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.

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