With its tiny residential spaces, dense population and narrow streets, Hong Kong was not built for car ownership. However, the Tesla Model S is doing well in Hong Kong. The high-end electric car is now a frequent sight, whether cruising down to the beach at Shek O, snaking up the hills to Victoria Peak, or idling at traffic lights in the congested Central District.
It turns out Tesla has been getting help from the government.
In an attempt to reduce pollution, newly registered vehicles are heavily taxed in Hong Kong – in several cases by more than 100% of the vehicle’s sticker price. These taxes have been totally abolished for electric vehicles for the past 18 years. Previous electric vehicles that were brought to Hong Kong suffered slow sales for identical reasons they suffered elsewhere: generally low battery life and not enough charging infrastructure.
But Tesla Model S sales have steeply increased in the past two years in one of the most luxurious car markets in the world. Yes, Tesla owners here like the company and founder Elon Musk.
The tax waiver in Hong Kong on electric vehicles are even more friendly than in Norway, where sweet incentives also helped boost a booming business for Tesla.
Consumer registrations of electric vehicles have increased accordingly in Hong Kong over the past two years.
Tesla refused to reveal any sales numbers for Hong Kong, citing company policy.
Electric vehicle sales may be helped by Hong Kong’s compact size. The Tesla Model S can travel over 400 kilometres on a single charge. In larger countries, that limitation might worry some drivers, but Hong Kong only has 2,100 kilometres in total of road.
Mark Weber-Johnson of charged.hk states that Hong Kong’s Tesla owners generally use their cars to commute. Most of the electric car owners are doing more driving on the weekdays.
Tesla and other electric vehicle makers have been given an additional boost by the government – swift installation of public charging facilities.
Still, the Hong Kong boom of Tesla might be short-lived. With just over 7 million people in Hong Kong, there is only so much demand for cars. In addition, the tax incentives that helped boost electric vehicle sales are set to expire in 2017.