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Will the crony HK Gov reverse idiotic FRT decision?

markwj

Moderator, Asia Pacific
Apr 10, 2011
4,609
1,235
Hong Kong
The FRT in my opinion should be formulated on emissions rather purely value (they use engine displacement for the licence fee).

The current license fee scales are biased, and not purely based on the effect on the road / pollution.

Biggest private car (engine >4,500cc): HK$11,329/year.
Biggest multi-ton goods vehicle (exceeding 5.5 tonnes): HK$4,694/year.
Double-decker bus (80 passengers): HK$4,025/year.

So long as Government remains deluded in thinking that FRT has significant effect on vehicle ownership, and muddles purchase disincentives in amongst pollution / road damage scales, it'll never make sense.

Using FRT to try to control vehicle growth rates simply doesn't work. Back in 2011, FRT was increased 15% and the affect on growth rate was near zero. In April this year the FRT waiver on EVs was capped, and the result is a 9% increase in new petrol vehicles put on the roads (comparing 2017Q2 vs 2016Q2).

If we want to incentivise clean vehicles, and correctly apportion road use, then obviously pollution/passenger combined with gross vehicle weight/kmdriven is the fairest approach.

If we want to control vehicle growth, then improving the alternatives (mass public transport, modern alternatives such as Uber, etc) and/or limiting the purchases (quota system), is the sensible approach.

If we want to control congestion, then the above coupled with ERP in congested areas, and park-n-ride to offer an alternative, is the obvious solution.

All the above can be revenue neutral. Just too many vested interests and opportunities for politically scoring points, to be possible.
 
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Captain_Kong

Member
Jul 4, 2014
170
23
HK
The current license fee scales are biased, and not purely based on the effect on the road / pollution.

Biggest private car (engine >4,500cc): HK$11,329/year.
Biggest multi-ton goods vehicle (exceeding 5.5 tonnes): HK$4,694/year.
Double-decker bus (80 passengers): HK$4,025/year.

So long as Government remains deluded in thinking that FRT has significant effect on vehicle ownership, and muddles purchase disincentives in amongst pollution / road damage scales, it'll never make sense.

Using FRT to try to control vehicle growth rates simply doesn't work. Back in 2011, FRT was increased 15% and the affect on growth rate was near zero. In April this year the FRT waiver on EVs was capped, and the result is a 9% increase in new petrol vehicles put on the roads (comparing 2017Q2 vs 2016Q2).

If we want to incentivise clean vehicles, and correctly apportion road use, then obviously pollution/passenger combined with gross vehicle weight/kmdriven is the fairest approach.

If we want to control vehicle growth, then improving the alternatives (mass public transport, modern alternatives such as Uber, etc) and/or limiting the purchases (quota system), is the sensible approach.

If we want to control congestion, then the above coupled with ERP in congested areas, and park-n-ride to offer an alternative, is the obvious solution.

All the above can be revenue neutral. Just too many vested interests and opportunities for politically scoring points, to be possible.

What an eye opener with the statistics and figures!
 

Optic

Member
Nov 10, 2014
198
14
Hong Kong
Using FRT to try to control vehicle growth rates simply doesn't work. Back in 2011, FRT was increased 15% and the affect on growth rate was near zero. In April this year the FRT waiver on EVs was capped, and the result is a 9% increase in new petrol vehicles put on the roads (comparing 2017Q2 vs 2016Q2).
By your logic that FRT waiver doesn't affect vehicle growth, then removing the exemption shouldn't affect Tesla/EV adoption. This isn't the case, so FRT does in fact work. I think they should just raise FRT altogether or tag on a pollution tax. General public (outside of our own echo chamber) don't care less about FRT exemption for Tesla. Honestly, having already owned 2 Teslas, I don't mind the FRT, too bad for the late comers. We took more risk for early adoption and got more of a reward in a cheaper car. Just raise FRT for everyone, make it like Singapore!
 

markwj

Moderator, Asia Pacific
Apr 10, 2011
4,609
1,235
Hong Kong
By your logic that FRT waiver doesn't affect vehicle growth, then removing the exemption shouldn't affect Tesla/EV adoption. This isn't the case, so FRT does in fact work. I think they should just raise FRT altogether or tag on a pollution tax. General public (outside of our own echo chamber) don't care less about FRT exemption for Tesla. Honestly, having already owned 2 Teslas, I don't mind the FRT, too bad for the late comers. We took more risk for early adoption and got more of a reward in a cheaper car. Just raise FRT for everyone, make it like Singapore!

Capping the FRT exemption on EVs didn't affect vehicle growth. The number of private cars continues to grow. The difference is that EV growth went to 0, and petrol cars went up 9% (2017Q2 vs 2016Q2).

April's change was close to a doubling of the price of most EVs. Of course, that had an effect. Similarly, if they doubled the FRT rate for petrol cars, I am sure it would have an effect. If they increased the FRT rate to 10,000%, so a Prius cost HK$25million, I am sure that would have an effect on new sales.

The FRT rate for private cars currently caps out at 115%. Are you seriously suggesting the government raise that to 230%? Government has been using FRT to try to control vehicle growth, for the past few decades; my point is that simply does not work.

Singapore doesn't limit growth with an FRT system. They use a quota system. That will work to limit growth, because by definition the quota sets a hard limit.
 

Optic

Member
Nov 10, 2014
198
14
Hong Kong
Singapore doesn't limit growth with an FRT system. They use a quota system. That will work to limit growth, because by definition the quota sets a hard limit.
You are right, Singapore uses a quota system in which you have to bid and it was about $35k USD in the last round for 10 years. My point is that we need a system to limit the cars and reach an equilibrium, setting a hard FRT deters owership but doesn't set a hard car ownership limit. Having FRT exemption definitely increases car ownership. In short term, government should just increase FRT while giving breaks to EVs. I have no issue if they even decide to go with a quota system although this will wreck havoc for current owners. Just do more to reduce car ownership in HK!
 

markwj

Moderator, Asia Pacific
Apr 10, 2011
4,609
1,235
Hong Kong
Having FRT exemption definitely increases car ownership.

Have a look at the data from 2009 onwards. Average vehicle growth rate has been pretty much flat line constant since then. Constant through the 15% FRT increase back in 2011. Constant after April's capping of the EV FRT exemption.

Here's what EPD had to say a month ago: "As at end of September 2017, there are 11,026 EVs for road use". The EPD figure in August was 11,033. So, congratulations, Mr Paul Chan, you've managed to not just stall the growth of EVs, but actually reduce the numbers. Meanwhile, the number of petrol and diesel vehicles continue to grow.

Almost 1,600 new diesel private cars Apr-Jul 2017. Four times the equivalent figure for Apr-Jul 2016.

The figures are very clear; they show that the only thing the FRT exemption did was to succeed in persuading people to buy an EV instead of a petrol/diesel car. Now, with the exemption capped, EV sales have fallen to near zero and petrol/diesel sales increased to fill the gap. People simply switched back. No surprise, really.
 

Optic

Member
Nov 10, 2014
198
14
Hong Kong
We all know that 'reducing car ownership' is an excuse for the government, they want to reduce car ownership but don't want the middle class back lash.

So, what do you want them to do? Reinstate FRT exemption, which will certainly increase car ownership even higher but at least we have less ICE. Or increase FRT together or go with some type of quota? Do a mix of some sort? Or you just want them to say that they are removing FRT exemption because they were lobbied by traditional car companies?
 

markwj

Moderator, Asia Pacific
Apr 10, 2011
4,609
1,235
Hong Kong
We all know that 'reducing car ownership' is an excuse for the government, they want to reduce car ownership but don't want the middle class back lash.

Yes, exactly. If they truly wanted to reduce car ownership, going after the 93% ICE portion (as it was back in late 2016, early 2017) would make more sense than the 7% EV.

Reinstate FRT exemption, which will certainly increase car ownership even higher but at least we have less ICE.

Again, no; you keep saying this, but the facts show the opposite to be true. Full FRT exemption had no noticeable impact on total car ownership. Historical numbers back that up (both when the numbers were on the way up, as well as going down). The total growth in vehicle ownership was there before mass market EVs arrived here, as well as after the exemption was capped.

Vehicle ownership numbers over the past 10 years clearly show that the only effect the FRT exemption had was to result in a larger share of EVs and less ICE. Total growth was unchanged.

The reasons for this seems to be that even with full FRT exemption, EVs are still extremely expensive to buy and maintain on the roads here; especially vs comparable ICE. Charging is, in general, a major PITA and disincentive to purchase an EV. Our relatively low mileages minimise the long-term fuel savings costs.

So, what do you want them to do? (snip) Or increase FRT together or go with some type of quota? Do a mix of some sort? Or you just want them to say that they are removing FRT exemption because they were lobbied by traditional car companies?

A sensible approach would be to tackle the pollution problem by incentivising EVs and dis-incentivising ICE. Adjust the tax rate so that the two choices are comparable, and then push the decision towards EVs by addressing the charging problem, and providing other incentives. This can be done in a revenue neutral and total car ownership neutral manner (by increasing FRT for ICE, and decreasing for EV, until such time as EVs obtain and maintain a reasonable market share). Countries like Norway can be a good example for how this is done. Access permits to country parks on week days, support for EV charger installation, perhaps parking or tunnel fare concessions, etc, are examples. I would also set a hard date by which time no new ICE vehicle registrations will be permitted.

Then, we have the separate issue of addressing the total vehicle growth rate. A sensible approach would be to address that by improving public transport (particularly in and out of remote areas), encouraging new forms of shared economy style public transport (such as Uber, Lyft, car sharing, autonomous vehicles, premium taxis, etc). I am not, in general, in favour of a quota system as that unfairly penalises the portion of Hong Kong's population not served by public transport. Unlike Singapore, Hong Kong has the city centres, but also a large portion of remote areas. Vehicle ownership for people in those areas is not a luxury, but a necessity.

Regarding congestion, I would look to other world cities such as London, Paris, etc. ERP, congestion area charges, park-n-ride, balancing tunnel toll fees, etc. All have been proven to work in other places. What makes HK so different?
 

Optic

Member
Nov 10, 2014
198
14
Hong Kong
I am all for your suggestions. I am just against reinstating full FRT exemption at all costs for EVs. I would not have owned a car without FRT exemption, now i have both a MS and a MX. The increase of car ownership with FRT exemption is statistically insignificant, but it is there.
 

markwj

Moderator, Asia Pacific
Apr 10, 2011
4,609
1,235
Hong Kong
I am all for your suggestions. I am just against reinstating full FRT exemption at all costs for EVs. I would not have owned a car without FRT exemption, now i have both a MS and a MX. The increase of car ownership with FRT exemption is statistically insignificant, but it is there.

Why did you decide to buy a Tesla, when you previously didn't own a car? And then another? Was it a desire to own an EV, or some other reason? Even without FRT, these cars are HK$600k - HK$1+m.
 

Ben_HK

Member
Oct 26, 2017
5
3
Hong Kong
I am all for your suggestions. I am just against reinstating full FRT exemption at all costs for EVs. I would not have owned a car without FRT exemption, now i have both a MS and a MX. The increase of car ownership with FRT exemption is statistically insignificant, but it is there.

But the net amount of vehicles you have put on the road is still one (you can't drive 2 cars at once...) and the net result was you put an EV on the road instead of an ICE. For that FRT exempt price you could have bought an ICE C or base E class (or an S class if you only purchased one ICE instead of buying 2 EVs; which STILL only puts 1 vehicle on the road)
 

Optic

Member
Nov 10, 2014
198
14
Hong Kong
Why did you decide to buy a Tesla, when you previously didn't own a car? And then another? Was it a desire to own an EV, or some other reason? Even without FRT, these cars are HK$600k - HK$1+m.
All other cars suck! I am a tech guy but not a car guy. And the lure of FRT exemption make it seem like a good deal. It's the same reason that why Chinese people buy Maseratis in Canada, in relative value, it seems cheap. I certainly ain't the only Tesla fan boy here with more than 1 Teslas or owned more than one. (even if you flipped one, it means, there was another Tesla in HK) I believe you have 3 Tesla. As a share holder, I thank you!
 

Optic

Member
Nov 10, 2014
198
14
Hong Kong
But the net amount of vehicles you have put on the road is still one (you can't drive 2 cars at once...) and the net result was you put an EV on the road instead of an ICE. For that FRT exempt price you could have bought an ICE C or base E class (or an S class if you only purchased one ICE instead of buying 2 EVs; which STILL only puts 1 vehicle on the road)
I don't like ICE cars, no excitement there. There are lot of people here that flipped for a newer S or X because it's become affordable to do so since there is no FRT. The second hand car will be picked up in the second hand market, and it certainly ain't a 1:1 ICE displacement.
 

markwj

Moderator, Asia Pacific
Apr 10, 2011
4,609
1,235
Hong Kong
I believe you have 3 Tesla

Just two. I have one, and my wife has one. We live about 9km from the nearest MTR, and about 1km from the nearest public transport of any sort. Getting a taxi to come takes about 20 minutes on the phone (off-peak only - peak times it is impossible).

Happy to be without a private car, once the government sorts out public transportation outside the urban areas.
 

OddBod

New Member
Sep 20, 2018
4
2
Hong Kong
Yes.... of course HKG Gov will reduce the FRT for EVs...

This will happen later, after the other car brands have their own EVs to sell.
They will petition the Gov with reasons 'why it is a good time to promote EVs in highly pulled Hong Kong'.
 

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