We have produced the following spreadsheet showing the state of Electric Private Cars in Hong Kong today:
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.