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Yes, this is clearly something charged.hk is and will be involved in.
Government Policy towards EVs is set by the Chief Executive, and his team. They are advised by the Central Policy Unit.
Implementation seems largely driven by the EPD, and implemented by Transport Department. But as it is a financial matter, the Financial Secretary is the one who proposes the change in his budget. Did I miss anyone out :biggrin:
Very good analysis, markwj.
I remember when a lot of us watched the live feed from the Legco. I think there were 100 deposits paid for Tesla Model S within 5 minutes, back then in March 2014. And the "near live" comments can be found here somewhere in a thread.
Well I think they should tax EVs but to a lesser degree than ICE.... There are 95% of people out there who are buying ICE cars and paying 100% tax and they probably think why should a >$800k luxury vehicle be so privilaged to be charged 0 tax? Sure EVs don't pollute the HK air, but we still congest the streets and use the road. I believe the tax exemption should be more progressive and not 100% exempt. Or perhaps the tax should EV should go into some type of EV charging infrastructure.
A sample is Norway EV incentives. They will wind it down now that the have met their EV target.
Norways Generous Electric Car Incentives To Ramp Down by 2020 - Transport Evolved
Our tax exemption is honestly an overkill. Though I admit, if they did charge 50% registration tax, it might start becoming a break even between me buying another luxury vehicle over a Tesla. But the question i want to raise is, what is a fair level of incentives that EV drivers should get?
A sample is Norway EV incentives. They will wind it down now that the have met their EV target.
Norways Generous Electric Car Incentives To Ramp Down by 2020 - Transport Evolved
Our tax exemption is honestly an overkill. Though I admit, if they did charge 50% registration tax, it might start becoming a break even between me buying another luxury vehicle over a Tesla. But the question i want to raise is, what is a fair level of incentives that EV drivers should get?
Norway is in a different situation. They have 50,000 EVs on the road. We have < 2,000.
My answer to the guy who says "why should a >$800k luxury vehicle be so privileged to be charged 0 tax" is: So, buy an EV then. This only directly impacts you if you have a choice to make between a petrol vs EV car, but choose petrol. For anyone else, it is irrelevant. Sure, there is some tax income foregone (I would argue against 100% - for example my EV roadster was HK$1million+ and an equivalent petrol Elise was HK$350,000, so what was the incentive - tax on HK$350,000 or HK$1million+, as I certainly couldn't have afforded a HK$2million+ EV). But non-EV cars aren't being taxed for their pollution at the moment so are also being subsidised in their own way. The taxes on petrol Private cars here also subsidise commercial vehicles, but government figures themselves show than 80% of the roadside pollution is cased by 20% of the vehicles (and those 20% are not private cars).
I think you said it well:
That is the crux of the issue. The incentives are there to _incentivise_ people to buy EVs. They should remain in place until the majority of cars on the road are EVs. One part of it is that EVs are more expensive than petrol cars, another the inconvenience and cost of charging, and the other part is a general incentive package. The idea is to make the purchase of an EV more attractive than that of a petrol car (even given the charging inconveniences for most).
The purchasers now are early adopters, mostly with some facility to charge. If you are in the market for a high-end sedan, and have home parking with electrical supply, it is a simple decision to buy a Model S, and the majority of current purchasers are that market. However, the vast majority of private car owners have no such home charging facilities, and that is going to be a much harder market to crack. My best guess is that once we saturate the current market of easy sales, we're going to plateau - and that can only be passed with major improvements to public charging infrastructure. 1,000 13A sockets in public car parks doesn't come close to making an impact to that larger market.
So, my personal opinion is that at the moment, with perhaps EVs making up 5% of new car sales in the past year, and less than one half of one percent of all the private cars on the roads here today being an EV, we need the incentives. With the cars now becoming available, the incentives are clearly making a difference, and we are reaching a tipping point. But, any discussion on removing/reducing those incentives now, would be counter-productive to the movement to replace fossil fuel burning vehicles with EVs in Hong Kong.
I am thinking from the perspective of an average joe who is congested in the street behind cars rather than someone who can afford a Tesla and should buy one instead of an ICE. As a person who never owned a car in HK, I certainly agree that we should tax cars. There is no denying we need incentives for EVs, but should a $800k Tesla be taxed differently than a $400k eGolf? What if in the future there is an ultra luxury $8m EV, should that be taxed? How does that affect the public EV perception? My opinion is full tax exemption is excessive and it should be more progressive.
FYI, I have an 85d on order but i just say it like it should be. Perhaps with less incentives, I would not have ordered a car and the roads would be 1 less car congested which is even greener than owning an EV. I am just taking off my EV owner hat and trying to think from the view of the 90% of the Hong Kongese who don't own a car.
FYI, I have an 85d on order but i just say it like it should be. Perhaps with less incentives, I would not have ordered a car and the roads would be 1 less car congested which is even greener than owning an EV. I am just taking off my EV owner hat and trying to think from the view of the 90% of the Hong Kongese who don't own a car.
If a Tesla costs 1.2mil instead of 800k because of FRT tax, I firmly believe the majority of buyers will opt to buy a 800k ICE Benz, BMW or Audi. So the average Joe will continue to inhale exhaust fumes in CWB or Mongkok. If that's what the average Joe and/or government wants, let them introduce FRT on EVs.
I doubt whether there are that many people buying HK$800,000 Teslas, who would not be in the market for a BMW / Mercedes / Audi. There are not that many people saying "wow, tax free - I think I'll buy a car". Remember, the number of EVs (2,000) is miniscule, compared to the total number of private cars (500,000). Hopefully, things will change, but that is the situation today (and today, or at least 2017) is what we are talking about.
The incentives are not supposed to incentivise someone to buy an EV, who would never have thought of buying a car without them. And so long as EVs are in the HK$400,000+ range, I don't think that happens often enough to be significant.
The incentives are supposed to incentivise someone to choose an EV _rather_ than a petrol car.
The incentives are not supposed to incentivise someone to buy an EV, who would never have thought of buying a car without them. And so long as EVs are in the HK$400,000+ range, I don't think that happens often enough to be significant.
The incentives are supposed to incentivise someone to choose an EV _rather_ than a petrol car.
I understand my views are against the interests of the users of this forum. To have a sustainable technology, we need to have the public support, but I believe it is hard to justify a 100% tax exemption.There are people (myself included) who are getting their first car in HK because of the great EV incentives. In US, the EV incentive is about $10k USD, in HK it is 100% car price. I am not sure how price senstiive a person who is buying a 800k car. On the other extreme, should we tax someone who drives a $2.5m i8? How about a $1m P85D? Perhaps most P85D user are not so price sensnitive, but sure some of them will turn around and buy a Maserati instead.
Mainly agree with your points, but maybe still a bit too early.
We can aim for full exception as long as there aren't that many EV cars. Yet.
At some stage there could either be a cap on it (per vehicle), or a low tax, like 10% or 20%. Maybe a gradual introduction. But as Mark writes, to redo the FRT exemption is that hardest. To either cancel it or continue it as is - is the easiest.
Maybe 3 more years, then in 2020, see what the status is by then. Introduction of cars like the Model III from Tesla Motors will change things as well.
waidy
Member
Even if there is no incentive, you get savings in driving electric instead of gasoline and the savings in the cost on maintenance (no filter, no oil change, no fan belt, etc.etc.etc..), AND parking on a reserved place in a busy garage. It feels good when other ICE drivers were circling the parking garage for parking, and I get to park at a "Reserve for EV Parking" very close to the entrance of a mall.
But I agree, most automobile buyers are attracted to getting 0 FRT.
But I agree, most automobile buyers are attracted to getting 0 FRT.
waidy
Member
No, no, no.. The reserved EV spots were blocked by cones. So far the two that I went to has cones on the EV spots: Ocean Terminal and the garage for the "fast boat" to Macau.
Lets be clear about this. People who buy a Tesla are buying a Tesla because its a fantastic car - first and foremost. The fact that it is electric and has low running costs is the bonus.
If the Tesla ends up costing 1.2m because of FRT, most prospective Tesla buyers may turn their back and buy a Mercedes or BMW or Audi. Ultimately, in HK, if you are looking to buy a mid-size to large size saloon beyond 700k in price, these are the options most people consider.
I think though that it is inevitable that the FRT exception will go away (at least in part). This only makes it more attractive to buy a Tesla now because of the re-sale. If in 2017, they introduced it and the the sticker price shot up from 800k to 1.2m, your used tesla would go up by a similar percentage.
If the Tesla ends up costing 1.2m because of FRT, most prospective Tesla buyers may turn their back and buy a Mercedes or BMW or Audi. Ultimately, in HK, if you are looking to buy a mid-size to large size saloon beyond 700k in price, these are the options most people consider.
I think though that it is inevitable that the FRT exception will go away (at least in part). This only makes it more attractive to buy a Tesla now because of the re-sale. If in 2017, they introduced it and the the sticker price shot up from 800k to 1.2m, your used tesla would go up by a similar percentage.
The issue is how much you can save, given the limited driving distances in Hong Kong.
To put some numbers on it. Say 1,000km/month (let's use this as an average, then you can adjust the figures up/down as appropriate, by your chosen factor). I drive every day across Hong Kong to/from work, and that is what I do.
Prius: About 20km per litre. A litre being HK$17 here, that puts it at HK$1/km (including oil, etc).
Model S: About 5km per kWh. That puts it at HK$0.20/km (excluding free charging).
So, monthly Prius cost (for 1,000km/month) is around HK$1,000, vs HK$200 for Model S.
Really, just rough figures. We are talking about HK$10k/year saved on fuel. On top of that, we've got cheaper yearly license fees (HK$5,000 - HK$10,000 cheaper, depending on car), arguably cheaper services fees, and some parking benefits. If you can charge at home, that is vastly simpler than visiting petrol stations, but if you can't then you have to deal with the hassle that is public charging.
End-result is perhaps HK$10,000 - HK$20,000 a year saved. HK$50,000 - HK$100,000 over five years. But, compared to HK$700k - HK$1m, that is not really that significant.
Why Prius? Well I chose it because that is my own (perhaps extreme) example. I went from a Prius to a Roadster. I save about HK$15,000/year in fuel+license costs. I spend about HK$13,000/year more in insurance.
If you don't like it, put in whatever comparable fuel figure you like. I guess best case you would end up with HK$200,000 saved (vs a big gas guzzler) over 5 years.In the USA, the average is 21,500km/year (overall average, it depends on driver age and gender). That would double the savings.
These are averages. Of course, some will drive a lot more, and consequently save a lot more. Some will drive less, and save less.
Not me, and not about half the buyers I know. We bought it because it is electric and better for the environment than a big gas guzzler. The fantastic car was the bonus. The FRT incentive made the purchase possible.
Again, let's put some numbers on this.
Model S in Hong Kong today is between HK$619,000 and HK$1,051,900. FRT exempted.
With FRT, that would be HK$1,128,350 (+HK$509,350) and HK$2,059,085 (+HK$1,007,185).
To see how comparable that is, have a look at the BMW, Mercedes and Audi price lists here in HK:
http://www.automomo.hk/wp-content/uploads/2015/02/2015-BMW-Full-range-Jan-26.pdf
Mercedes-Benz Hong Kong - Benz - Hong Kong Auto - Price List
http://www.automomo.hk/wp-content/uploads/2013/03/Audi-MY14-Full-range-pricelist.pdf
In the 1 to 2 million range, there are some pretty amazing cars in that list.
I am not so sure about that.
In the second hand market, the comparison is not against a new Model S. The comparison is against a comparable second hand BMW, Mercedes, Audi, etc.
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