In a scenario eerily similar to what is happening in Denmark, sales of Tesla vehicles in Hong Kong have plummeted after the government slashed an electric vehicle tax break on April 1.
In official data analysed by The Wall Street Journal from Hong Kong’s Transportation Department, it is reported that no new Tesla Model S or Model X vehicles were registered in April and in May, there were just five new, privately owned electric vehicles registered in the Chinese territory.
When the scrapping of the tax incentives was announced in February, locals rushed to purchase electric vehicles and in the first quarter alone, nearly 3,700 vehicles from Tesla were registered, including 2,939 in March.
The government of Hong Kong initially waived vehicle registration tax for newly purchased electric vehicles, leading to a surge in EV sales. However, in February, it was announced that the tax would only be waived on the first $12,500 of a new EV’s purchase price. This meant that on April 1, the price of a base Tesla Model S soared from below $75,000 to around $130,000.
Despite the news, Tesla said that its business does not rely on government incentives.
“Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles, however, our business does not rely on it. At the end of the day, when people love something, they buy it.”
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