When there are no supply on EV, they waived for tax for N years. When supply just started, they cut the waiver......
What's the logic to promote EV ?
What's the logic to promote EV ?
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So lets say that a Model 3 costs US$45,000 (HK$351,000). Under the old rates, the tax would be HK$223,500 equating to a an average of 64% of the imported value. This latest concession will reduce the tax by $97,500 resulting in a final tax of HK$126,000. This in turn is equal 36% of the imported value, so the Model in this example will end up selling for HK$477,000.
Although they might lose a few Model 3 sales relative to a totally tax free scenario, I believe that there will still be a robust demand for Model 3 at around $477k.
Obviously this is going to raise the Model X and Model S prices by a lot more. In my opinion this is still fair, because there is a lot of luxury baked into the price of these cars which has been getting a free tax ride on the back of the EV waiver. I believe that this is a very fair arrangement which balances the needs of various elements of society, and continues to encourage EV adoption without leaving people who aren't in a position to afford Tesla Model S and X cars, feeling that wealthier folks are being unfairly advantaged.
Although they might lose a few Model 3 sales relative to a totally tax free scenario, I believe that there will still be a robust demand for Model 3 at around $477k.
Obviously this is going to raise the Model X and Model S prices by a lot more. In my opinion this is still fair, because there is a lot of luxury baked into the price of these cars which has been getting a free tax ride on the back of the EV waiver. I believe that this is a very fair arrangement which balances the needs of various elements of society, and continues to encourage EV adoption without leaving people who aren't in a position to afford Tesla Model S and X cars, feeling that wealthier folks are being unfairly advantaged.
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What they should do is actually increase the FRT for non-electric private car if they really want to reduce the traffic, instead of cutting the tax incentive for EV. Afterall they are trying to move people from using fossil fuel car into clean energy car, or are they not?
It is very difficult to understand the government's logic behind this, its just total nonsense!
The issue I have is that the direct result of this policy is that people will now choose polluting petrol vehicles rather than no-roadside-emissions electric vehicles, whereas last year they would have picked the cleaner choice. Be they Model S, X, or whatever. That is a bad thing.
If you want to decrease the fossil fleet, then increase the annual fees on existing private fossil cars or put some onerous inspection on it after the 10th year of service. Things like that will eventually reduce the resale value to the point that the fossil powered cars will be exported to another market to live out their useful life or they will be scrapped and recycled.
Even though most Tesla owners (including myself) stand to benefit financially by this decision, I think its the wrong move.
However, just for some context here. Most governments around the world have some form of EV subsidy - in North America that is around US$7,000 for instance.
While there was no subsidy in HK, the FRT foregone was a form of subsidy. If we take the most common Tesla I see in the streets 70 or 75D, the price was around HK$700k give or take, Meaning the government was foregoing around HK$600k in tax on every Tesla sold - or ~US$77k per car - that is more than 10x the subsidy you see in most places.
The new subsidy cap of 98k, is like ~US$12k which is still 70% more than you would get in most markets.
So I can see the logic. The issue now though, is that Teslas will now cease to be a popular choice in HK. Hard core environmentalists and enthusiasts will be the buyers now.
Part of the reason I bought a Tesla in the first place was because I knew this was only a matter of time.
However, just for some context here. Most governments around the world have some form of EV subsidy - in North America that is around US$7,000 for instance.
While there was no subsidy in HK, the FRT foregone was a form of subsidy. If we take the most common Tesla I see in the streets 70 or 75D, the price was around HK$700k give or take, Meaning the government was foregoing around HK$600k in tax on every Tesla sold - or ~US$77k per car - that is more than 10x the subsidy you see in most places.
The new subsidy cap of 98k, is like ~US$12k which is still 70% more than you would get in most markets.
So I can see the logic. The issue now though, is that Teslas will now cease to be a popular choice in HK. Hard core environmentalists and enthusiasts will be the buyers now.
Part of the reason I bought a Tesla in the first place was because I knew this was only a matter of time.
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i wouldn't say its total non-sense, just that the decision seems hastily made and not with the diligence it's due.
there is elasticity in demand for new cars depending on total price, the higher the total price including taxes, the less new cars will be bought, be it ICE or EV. there are certain amount of cars that WOULD be bought without much regard of total price, and cutting the FRT exemption would barely do anything to them. the aim is to encourage them to go electric by raising the FRT on ALL cars, maybe even steepening the high tier FRT rates so the more expensive/higher CC engine is your new car, the more tax intensive it gets - this focuses on the city-air quality issue, along with the traffic quantity.
even if EV should be taxed (which i think is a fair point), it's bullshit to have NO FRT difference between an air-polluting ICE car and an EV. The gov is deemed to "subsidise the rich with luxury EVs", this can be mitigated by setting tiers on your FRT rate, based on the price tag... just like how it is on ICE car FRTs!!!! You CAN push people towards considering a Chevy Bolt or BMW i3 etc, which would still provide clean pollution free transport and minimal reliance on oil.
Why is there no parity between EV and ICE tax, hanlon's razor suggests the gov policy is lazily constructed without the careful and fair diligence it is due, instead of something more sinister. Mr. Chan said in the address that the issue is the number of new cars on the road, so why not have policy that is actually consistent with your message?
i'm rather annoyed at this. no tax increase or steepening for ICE's, yet a massive hike on taxes of cars you'd rather have on the road than the other.
So in the competitive market place in HK, the Model S goes from competing with an E class to competing with an S class or Panamera type of vehicle.
The Model 3 will compete directly with a 3 series. US$45,000 equates to ~HK$475,000 (via the FRT tax calculations etc) or HK$400,000 for a 40k version. The Model 3 may still do ok under this tax regime but the Model S and X will see sales numbers plummet for sure!
The Model 3 will compete directly with a 3 series. US$45,000 equates to ~HK$475,000 (via the FRT tax calculations etc) or HK$400,000 for a 40k version. The Model 3 may still do ok under this tax regime but the Model S and X will see sales numbers plummet for sure!
Absolutely daft. Another day, another strange government initiative.
If the purpose was really to relieve road congestion, ICE should be taxed higher, parts of Central should be converted to no private cars or at the least start cracking down on boss' cars with harsher penalties. How about congestion pricing like Singapore?
Dear HK Gov,
Thanks for stifling innovation.
If the purpose was really to relieve road congestion, ICE should be taxed higher, parts of Central should be converted to no private cars or at the least start cracking down on boss' cars with harsher penalties. How about congestion pricing like Singapore?
Dear HK Gov,
Thanks for stifling innovation.
Apparently they have not defined what is not a commercial vehicle. If a Tesla can somehow be considered part of these (e.g. registered under a "car rental" company), I see a new business of helping people setting up new "car rental" companies, just like the parallel import of "preowned" cars from overseas
Can MS and MX be registered as commercial vehicle (e.g. As light goods vehicle, just like defender or ford ranger in HK)? I tried to look on TD's website and seems no information regarding the definition of LGV except it has to be below 5.5 tonne and only 5 seats is allowed. May be need to separate the trunk also?
If I was Tesla I'd bring Elon back to talk sense into the halfwits involved in this decision, and embarass them into maintaining the status quo, and threaten to dramatically cut down employment in HK.
What's the bet there is a mainland manufactured car that will benefit from this.
What's the bet there is a mainland manufactured car that will benefit from this.
That isn't a logical policy, and I'm sadly disappointed. anything we can do?
We should promote the fact about EV, with stat, to address the fault image of ppl:
EV create even more pollution using electricity
EV growth cause traffic
Buy Tesla not caring taxes
EV is just a gimmick
Battery create more pollution
We should promote the fact about EV, with stat, to address the fault image of ppl:
EV create even more pollution using electricity
EV growth cause traffic
Buy Tesla not caring taxes
EV is just a gimmick
Battery create more pollution
This is quite sad especially since Hong Kong clearly has a roadside pollution problem. The change in FRT laws is quite drastic as it effectively increases the price of a Tesla by around 70% on average. I thought they would have phased this in over time - i.e you only get 50-75% of the exception - i.e something like a 30% increase in price rather than 70%!
The reality is, at the new price points, Tesla certainly won't be able to compete when you factor in the quality of build and overall luxury the competitors offer. Performance is clearly an area where they can compete dollar for dollar but honestly, that is such a niche market. Most BMWs and Mercs you see at these price points are generally purchased by people who want to commute in luxury rather than being able to do drag races and the like (you don't see many 535is or AMG E class mercs around). I predict their annual sales at least for the Model S could plunge by 70%. I can only see real EV enthusiasts, the passionately environmentally conscious and performance junkies really going for it now.
The model 3 has a decent shot at being successful, but something tells me that by the time that is available for purchase, there could be zero FRT waiver (i.e a cap of close to zero). It would therefore be priced at or at a premium to a 3 series - they would really need to lift their build quality and interior luxury to be able to win over those customers.
I have had several build quality nightmares with mine but touch wood, I have had no issues for the last several months and I am starting to enjoy it once again. The sad reality is, when I come to sell it, it is highly unlikely I will be purchasing an EV again given the lack of options at reasonable prices.
The reality is, at the new price points, Tesla certainly won't be able to compete when you factor in the quality of build and overall luxury the competitors offer. Performance is clearly an area where they can compete dollar for dollar but honestly, that is such a niche market. Most BMWs and Mercs you see at these price points are generally purchased by people who want to commute in luxury rather than being able to do drag races and the like (you don't see many 535is or AMG E class mercs around). I predict their annual sales at least for the Model S could plunge by 70%. I can only see real EV enthusiasts, the passionately environmentally conscious and performance junkies really going for it now.
The model 3 has a decent shot at being successful, but something tells me that by the time that is available for purchase, there could be zero FRT waiver (i.e a cap of close to zero). It would therefore be priced at or at a premium to a 3 series - they would really need to lift their build quality and interior luxury to be able to win over those customers.
I have had several build quality nightmares with mine but touch wood, I have had no issues for the last several months and I am starting to enjoy it once again. The sad reality is, when I come to sell it, it is highly unlikely I will be purchasing an EV again given the lack of options at reasonable prices.
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