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2017 FRT Renewal

Discussion in 'Hong Kong' started by DITB, Mar 18, 2013.

  1. mattse

    mattse Member

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    Good to see there are still rational LegCo councillors in HK :)
     
  2. wongsters

    wongsters Member

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    I could be wrong but I don't think the budget has to be voted down in its entirety to get our way. All it takes is to convince the FS to retract his "proposal". John Tsang did change his "sweetener" from depositing $6000 into our MPF account (or something like that) to a $6000 cash payout some years ago. Of course that was after huge public outcry. This time we have all but a few thousand EV owners plus Tesla, against the almighty ICE lobbyists.
     
  3. markwj

    markwj Moderator, Asia Pacific

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    Correct. Pretty much all we can do is hope to pursuade Government (in committee discussions) of the faults in this new policy. I don't hold out much hope, but that is what we are trying.
     
  4. Captain_Kong

    Captain_Kong Member

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    I feel pretty confidence in saying that it's very unlikely to see creditable EV competitors (other than Tesla and the current crop of EVs) being made available in HK in the next 3 budgetary years.

    Even there is a full EV ver of BMW 5 series or Mercedes E class (which there is none), between launching and them being made available in HK, we're likely to tick into 2030! BMW i3 is intended as a car with RX.

    If the govt is arguing for more EVs which can be offered as a creditable alternative to a ICE being launched by other marques, name one please!

    A totally flawed and ill advised argument.
     
  5. punter

    punter Member

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    Brands such as BMW, Volkswagon, Nissan, etc shoulder a lot of the blame here. They’ve attempted to keep most of the FRT wavier for themselves as windfall profits, while making zero investment in charging infrastructure in Hong Kong.

    The BMW i3 is priced in Hong Kong at HK$455k, a 31% markup of HK$103k on the US sticker price of $44,495.

    Volkswagon starts the eGolf in the US at US$30k, but the list price in Hong Kong is 58% higher with a markup of HK$136k.

    I can only find some casual reference to the Nissan Leaf selling at about HK$350k. But in the US it sells for US$30,680, meaning that they have an approximate 46% markup of about HK$111k.

    A Tesla Model S 60 starts at HKD596k vs a US price of US$71,300, a small 7% markup of only HK$40k, which is reasonable given shipping and elevated costs of doing business here in Hong Kong.

    Only Tesla has been embracing the spirit of the FRT waiver, by passing the savings on to customers. The other manufacturers seem to have been happy to jack up prices and earn windfall profits.

    I think there might have been some perception in government that the waiver was benefiting wealthy buyers of the high end Tesla cars, and manufacturers of the low end cars.

    It really is Tesla getting screwed here along with the environment. If you are angry, the one thing that you can do is ensure that you never buy a BMW, Volkswagon, or Nissan again. I do believe that if the lower end manufacturers had embraced the FRT waiver and passed on the savings to less spendy buyers, then the government would have had political cover to continue the exemption.

    Perhaps when we see Model 3 and greater availability of low end models, and if other manufacturers can be convinced to cap prices at reasonable premiums to overseas markets, then perhaps the government will have sufficient political cover to resume an FRT waiver program.
     
    • Like x 4
    • Informative x 1
  6. Mille Pun

    Mille Pun Member

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    I'm getting this response from the CE candidate Wu Kwok Hing. Let's try out best to raise the voice in the society!


    Mille你好。你的意見我非常認同。我當選的話,會推動延續電動車豁免首次登記稅。

    我亦在2.1更新版政綱加設了以下段落, "政府在2017-18財政預算案中,撤銷了免除電動私家車首次登記稅的措施,把免稅額設在$97,500的低水平,勢必窒礙電能車取代燃油汽車的速度。我認為應該要延續原來推動電能車發展的稅務政策" 。
     
    • Like x 2
  7. markwj

    markwj Moderator, Asia Pacific

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    Charged.HK has produced the following spreadsheet showing the state of Electric Private Cars in Hong Kong today:

    Hong Kong Electric Vehicles

    Some comments to make:
    1. The HK$97,500 tax cap equates to a vehicle costing less than HK$200,000 being 100% FRT free (40% of $150,000 + 75% of $50,000). There are no private electric cars available on the market at that price point, so this new policy effectively taxes ALL electric private cars in Hong Kong.
    2. Dr Paul Chan has indicated that the new policy is intended to support an electric car costing HK$400,000. Let's look at the BMW i3 for example. At HK$451,000 (tax free), that competes directly against vehicles such as the Prius Hybrid (Super Luxury trim level) at HK$353,500. The electric car, even tax free, is more expensive than the equivalent petrol car. Considering fuel savings and ignoring charging issues, still 51 of those BMW i3 were sold in the second half of last year. But, now that we have this new tax, and even with HK$97,500 waiver, the same BMW i3 costs HK$677,000 while the price of the Prius is unchanged. How will the BMW i3 compete in this market?
    3. Tesla Model S clearly dominates the market.
    We've discussed why Tesla has been seeing such success here, when the car is significantly more expensive than other electric vehicles. In particular, we don't see this disparity in other markets with similar incentives such as Norway (where the spread of vehicle models is much more even). The answer appears to be two-fold:

    Firstly, while Tesla offers a global 'fair pricing' model (so their cars are sold at the same price, no matter the country they are sold in, while taking into account currency, tax, and transportation costs), the other suppliers do not. When comparing against European and American prices for the same vehicles, the mark-up of the other electric cars is significantly higher. This narrows the price gap between the Tesla and the cheaper alternatives here in Hong Kong. Simply put, it is not _that_ much more expensive to buy a Tesla.

    Secondly, owning a private car in Hong Kong is expensive. In particular, the cost of parking and charging infrastructure. Wealthy people are more likely to buy private cars, and by definition those people have more available money to spend. Such owners are also more likely to be able to charge at home/work (living in houses, owning their own car parks, etc). Tesla's investment into SuperCharging and Destination Charging here (which the other electric car brands have not done) is significant in easing the burden of relying on public charging.
     
    • Like x 5
  8. Optic

    Optic Member

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    Tesla had an deserving advantage against other competitors with FRT exemptions. Now FRT exemption is $97500HKD, it is more on par with the North America that gives you a tax break. Somehow there, Tesla is able to compete via good customer service and a great product offering. Without the FRT exemption, Tesla will definitely take a huge hit and it's time for them to make good with CS and win back some customers. Hopefully Tesla can take this year and revamp their service model and be ready when the FRT is renewed again in the next financial policy address. Model 3 should will compete well with FRT discount and though unlikely, I hope the FRT discount will be increased next year.
     
    • Like x 1
  9. mattse

    mattse Member

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    @markwj, great work for the excel file

    You may also wish to add a column which divides the pre-tax price by the manufacturer's range, which clearly shows why people are favouring the "expensive car" (against the criticism that govt is "sponsoring" the rich)

    For base model, the "cheapest" iMiev is selling at $2988 / km range, i3 turns out to be the most expensive per km at $3006.7 / km while S60 comes at $1782.8 / km and X75 at $2187.5 / km
     
    • Like x 3
  10. Captain_Kong

    Captain_Kong Member

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    On a related note (assuming the proposed EV FRT applies going forward) - what would happen to the insured value and premium of the "legacy" Tesla fleet in HK?
     
    • Like x 1
  11. flyingbathtub

    flyingbathtub Member

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    Wondering about the same on the other thread. Say touchwood total-ed a pre-FRT new Tesla. Base on the wording of the New-for-Old compensation it's likely that the compensation will be capped at the pre-FRT value ( which is fair enough) hence you won't be able to get the same car again. You will get your money back though.

     
  12. markwj

    markwj Moderator, Asia Pacific

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    We think the difference here is the charging issue. In other markets, people can easily and relatively cheaply install charging at their home. Here, in general, they cannot.
     
  13. jsiu

    jsiu Member

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    I did a brief translation of the above in Chinese. In case you meet any Chinese media, please feel free to use it. At the end of the day, we need to get support from the Hong Kong people at large:

    FRT2017.docx
     
  14. hk1992

    hk1992 New Member

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    Cancelled reservation on Budget announcement day, received email today from Tesla:

    Thank you for your support for Tesla. Our records indicate that you recently requested a cancelation of your Model 3 Reservation.

    Currently, we are awaiting more information in regards to whether Model 3 Reservations will or will not qualify for the First Registration Tax exemption. Once we receive final word, we will be sending a communication out to all reservation holders as to the final status. If you would prefer not to wait, and proceed with your refund, please reply “Proceed with Cancelation” and complete the bank details below. If you would like to hold your refund case until more information arises, please reply with “Hold Reservation”.​
     
  15. Lerxt

    Lerxt Active Member

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    I can't quite see how FRT would not apply to M3s, as FRT is based on date of registration.
     
  16. markwj

    markwj Moderator, Asia Pacific

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    From: New first registration tax concessions for electric vehicles

    The question is whether a reservation is an order. I doubt it.
     
    • Informative x 1
  17. kinho

    kinho Member

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    I think it's actually the date you confirmed your order, a binding contract with terms and specs and pricing. The M3 hasn't even been built, and therefore our deposit is a non-binding (fully refundable) reservation to be able to purchase the vehicle when available.
     
  18. garethmchau

    garethmchau Member

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    Mark, do you know if there is any more lobbying against the EV FRT? Will it just be passed on 1 April for sure then?
     
  19. Lerxt

    Lerxt Active Member

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    Will be interesting to see what happens. Kill Tesla in HK, kill many jobs in the sales and service department at Tesla.
     
  20. markwj

    markwj Moderator, Asia Pacific

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    Charged.HK recently sent a summary message out to all our members on this. I'll paste it here, as it describes the options quite well.

    Regarding timeline, it is unlikely that the budget legislation will pass before 1st April 2017. Perhaps the FRT amendment bill may. Anyway, the government will just issue orders to implement the new measures, pending legislative approval (which they have the power to do).
     

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