Tesla Issues Statement On 0 Model S, X Sales In Hong Kong In April

2 months ago by Eric Loveday 41

Tesla

First pop up store to display a LHD Model X in Hong Kong – Oct 2016

In March 2017, electric car sales in Hong Kong stood at 2,964 units. Come April, sales dropped to zero units. This was exactly as we had predicted when news first surfaced of the incentives being slashed.

Hong Kong’s Transportation Department confirmed the figure, stating:

“There was no first registration of an electric private car in April 2017.”

Tesla Hong Kong

This was seen by most as a massive blow to Tesla, as the automaker was far in the lead in terms of electric vehicle sales in Hong Kong. As Business Insider states:

“…a sales surge just before the April 1 rule change, with 2,939 Tesla vehicles registered in March and nearly 3,700 entering the department’s books for the first quarter of 2017. The end of the tax break was announced in February.”

You’d think Tesla would be concerned over this drop off, but apparently the automaker isn’t too shook up. A Tesla representative released this statement on the situation in Hong Kong:

“In China, for example, we’ve tripled our revenue from 2015 to 2016 despite a massive tariff and no incentives.”

“At the end of the day, when people love something, they buy it.”

“Hong Kong remains a significant market for Tesla, and we continue to sell cars there each quarter. When the Hong Kong government reduced the tax exemption for electric vehicles and increased the cost of our cars by nearly 100%, it’s to be expected that demand will be impacted in the period immediately following the change, particularly because of the large number who bought just prior to the change being implemented.”

“Tesla absolutely believes that the Hong Kong market will continue to be very strong over the long term because it’s clear that the people in Hong Kong love our cars.”

Tesla concluded by saying it had no concern over the long-term outlook for electric vehicle sales in Hong Kong. From thousands to zero should be cause for concern, you’d think.

Source: Business Insider

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41 responses to "Tesla Issues Statement On 0 Model S, X Sales In Hong Kong In April"

  1. Paul K says:

    Government incentives should be capped at a certain price point. If you can afford a Tesla you don’t need a rebate. It just gives government and electric cars a black eye.

    1. Why? When anyone is driving a Tesla, that same person is not driving a Jeep, MB500, Cadillac, or a Lincoln! Or worse yet, a H1 Hummer!

      However, if they had to Scrap such other car, to get the credits or rebates, then it would be more useful, as the other car could not be driven by someone else, while they drive their Tesla!

    2. Tech01x says:

      This makes no sense. Altering the decision to buy, say a Jaguar XF to a Tesla versus a Honda Civic to a Leaf actually pulls twice the pollution and consumption off the road. Besides, the Leaf is incentivized at nearly 25% of purchase price, while a S or X is at 10% or less.

    3. Tech01x says:

      BTW, why aren’t these “values” assigned to mortgage interest tax deduction? The richer buying more expensive houses write off a far larger dollar amount in mortgage interest. Why is that not characterized as the poor funding rich people’s mansions?

      1. Ziv says:

        Tech, they are. The mortgage interest deduction only applies to the portion of a mortgage that is under $1,000,000. Where I live the median price for homes is now over $1.2Mn, so half the homes have mortgage payments in which the interest is only partially tax deductible.
        The really rich people buy homes with mortgages of $2Mn to $5Mn and up, and the majority of their mortgage interest is not tax deductible. Which is fair.

    4. Tosho says:

      And you would be interning only the pointless compliance cars that are made to suck on purpose. You would be giving money only to the companies that don’t really want to make EVs and you would be promoting only the cars that created the “unusable hippie-mobile” image for EVs.

      1. Vexar says:

        And this is why government incentives are quickly turned into “helping the poor” and not about their intended purpose: to stimulate the market.

        There’s nothing wrong with being a lower-income worker. However, their populist attitude of entitlement is vulgar. They deserve it because they make less than someone else. Really? Nobody truly deserves the money, though. The $7500 didn’t make it any easier for me to save up for my Tesla and buy it, because it came in the form of a tax credit.

        1. zzzzzzzzzz says:

          There is nothing good with stimulating luxury goods market. I also want my 10 carat diamond, can you please pay more taxes to stimulate the market to drop prices so that I would be able to afford it due to economies of scale?

          When you stretch it to oversized and overweight 100 kWh $100k cars, it gets distorted from environmental benefit for society to simple crony capitalism. There is little green about it, just outsourcing emissions from point of use to cobalt/nickel/lithium mining and processing, and they are as far away from mass non-luxury market where it would make at least tiny difference as Earth from Moon.

          1. Peter says:

            To change a market you need to take some action. In both solar panels , battery packs and transportation. These are linked together and now proven to work. The important thing is to get this to the mass market. And that is what these insensitives are all about.

            We are heading toward this in an good pace now.

            Producing solar and wind energy storing it in batteries and your EV will save a lot of money for the consumer as EV are cheaper to build and need almost no service. Clean energy is cheaper to produce then oil and coal.

            Everybody will gain from this change from this change to renewables. ( our money will not end up at people that don’t give a s*** about human rights and terrorists ).

    5. Pushmi-Pullyu says:

      “Government incentives should be capped at a certain price point. If you can afford a Tesla you don’t need a rebate.”

      I completely disagree.

      The purpose of tax rebates or government incentives for buying EVs is not to help poor or struggling people buy EVs. The purpose is to encourage auto makers to make EVs that people want to buy. Since Tesla has clearly been the most successful at doing that, then adopting rules to favor other auto makers over Tesla is, to be polite, counter-productive. To be less polite, it’s downright stupid.

      The reason that Tesla started out by making a very expensive EV, and has only gradually reduced the average prices of its cars as it issues new models, is because that’s the only way Tesla can be profitable*.

      Using EV tax rebates and government incentives to encourage auto makers to make only lower-priced EVs is simply going to produce frustration, so long as auto makers can’t make a profit on lower-priced EVs. That’s the reality now, and likely will be for at least a few more years.

      *And please, let’s not have another pointless argument over whether re-investing all profits in future growth equals “not profitable”. This business model worked for Amazon.com, and hopefully it will work for Tesla Inc.

      1. Paul K says:

        There are good points on both side of the argument here. Being somewhat of a political animal I notice that perception seems to count more than reality these days. You may have noticed that there are an abundance of naysayers and denouncers out there both in social settings and in print and they love to pounce on this. I even get some flack about my Leaf although I’m quick to point out that electric car subsidies are chump change compared to fossil fuels subsidies.

        The current provincial gov’t here in Ontario may well lose the next election next year and I’m sure that Conservative parties and their support base will be all over this.

        It’s a shame electric cars are getting dragged into today’s polarized politics.

        1. Paul K says:

          oops big mea culpa here. Should have said opposition parties and their base and not conservatives. That party is likely to take power if the current one loses. We have more than one opposition party here. No intention to take a crack at conservatives here.

      2. Ambulator says:

        “And please, let’s not have another pointless argument over whether re-investing all profits in future growth equals “not profitable”.”

        You are the one who keeps bringing it up. If you make wrong comments you have to expect a response.

        Tesla makes no profit, so there is nothing to re-invest. I don’t really care, as they are not losing a lot and there is hope of them turning it around in the future.

      3. unlucky says:

        Numerically identical incentives work less well on people with more money. Giving $7.5k to a person buying a $130K car doesn’t make as much sense as giving $3.75K to two people buying $30K cars. The latter gets you more bang for the buck. It encourages the car makers to make affordable EVs and sell them. And it (in theory) converts two ICE drivers into EV drivers.

        It makes all the sense in the world to restrict rebates by income.

        I don’t agree that automakers can’t make money on lower priced EVs. Tesla is on track to release one soon themselves. Are they just looking to lose money?

        Let’s not have an argument about whether not being profitable is not being profitable. It isn’t being profitable. If you want to say it’s okay (or even smart) to not make a profit because you are reinvesting your money then fine. If you want to redefine not profitable to profitable then no, it isn’t going to fly.

    6. Birger says:

      That is plainly nonsense. The incentives here in Norway has made Tesla an option for way more people than it would be without it. People stretch their budgets to get one, including myself.
      It has put thousands of long range EVs on the road her.

    7. mxs says:

      Totally agree.

    8. JIMJFOX says:

      Bulldust! Let Honkers air quality drop to the levels of Beijing & see how quickly they bring back an incentive… the fools that made this decision deserve severe respiratory illness!

    9. billythetruth says:

      Seems like Elon Musks visit in 2016 didn’t had that much of an impact…

  2. James says:

    Yeah and in May 5 electric cars were registered and none from Tesla. People in Hong Kong love your cars or loved the incentives?

    1. Will says:

      because it’s impossible for people to love their cars but be unable to afford one, amirite? You people honestly don’t ever think before typing, do you?

  3. Tech01x says:

    How hard is this? If something you want is going to go up in price by double, wouldn’t it make sense to buy it before the price goes up? The result was a tremendous pull forward of demand. At some point, the things will reach equilibrium again.

    That’s why Tesla points to China, where their vehicles don’t recieve much incentives at all, mostly just some license plate allocation incentives in particular cities.

    The new incentives formula will work well for the Model 3.

    1. Will says:

      “JUST some license plate incentives”

      Because being able to drive every day of the week instead of just every other day isn’t THAT big an incentive…

  4. Tosho says:

    It is normal to see a sharp drop directly after the incentives cut. And not only because there are no incentives anymore but also because people that had plans to buy an EV probably rushed to do it before the incentives ended. There is also the psychological issue that buying an EV right after the incentives ended would make you feel like a loser. Just give it a couple of months …

  5. Tesla4theWin says:

    People are idiotic to believe the end of ‘incentives’ are what hurt Tesla in Hong Kong. As mentioned the import/registration tax or whatever it is they normally apply to a car results in the cost being DOUBLE. Twice the price of a model s/x is clearly not in the range most people can afford, and I’m sure other luxury german brands close to the same price range have minimal sales there as well.

    Once the Model 3 is available that will be less affected by Hong Kong’s dumb 100% price increase.

    1. a says:

      Guess how many Bolts were sold in Hong Kong.

      1. Big Solar says:

        + 1

        1. Kdawg says:

          One person in Hong Kong bought a Bolt? That’s more than Tesla! 😀

      2. Someone out there says:

        Hong Kong is a former British colony so they drive on the left side of the road, i.e. they want right hand drive cars. The Bolt EV is not available as RHD.

      3. Martin Winlow says:

        None (in Aril 2017, at least), no Bolts, no Teslas, no LEAFs or anything else…
        “There was no first registration of an electric private car in April 2017.”

  6. Pushmi-Pullyu says:

    “This was seen by most as a massive blow to Tesla…”

    Hmmm, no, certainly not “most”. It’s easy to tell, just by the comments posted here, that it’s only Tesla bashers and short-sellers who are trying to get everyone to set their hair on fire over something which was both expected and sensible.

    Hong Kong residents who were planning to buy a Tesla car sensibly chose to do so when it would cost them less, not more.

    Duh.

    1. ffbj says:

      Yeah, just drop the word “massive.”
      It certainly did not hurt their stock, leave that to Musk who said that the stock was too high, and it went down.
      This just happened, not the one from a couple years ago, when he said the same thing.

      Gift to the shorts, a chance to cover.

  7. TheDBA says:

    Anyone with a brain would know that if the price is going to double overnight that sales right after would be close to zero. Anyone thinking about buying the car in the next year would have done it before the incentives were removed. Just plain common sense.

  8. DJ says:

    And yet many people here claim that incentives don’t really help EV sales. Heck, per them most people don’t even know they exist!

  9. zzzzzzzzzz says:

    Tough life of compliance company. No taxapayer subsidies for rich greenwashers, no sales.

  10. Mark C says:

    Given that Hong Kong is an island, it seems to me more important to do incentives for zero emission (at the vehicle) vehicles than would be important in Luxembourg, which has no ocean front property. Odd that they would get rid of all of the incentives.

    IDK if Luxembourg has incentives and I certainly mean them no malice.

    1. DJ says:

      Except that in HK you don’t really need cars to get around. Their public transit system is great. It’s also prohibitively expensive to own a car so really the incentives in HK were just for the “rich”. I don’t necessarily have a problem with that but it is what it is.

  11. Huhu says:

    If anything, I think EV incentives should be a combination of an absolute credit and a percentage credit, a Federal credit of $5000 plus 4% of the price would work. The replacements of bigger ICE cars tend to be even better for the environment.

    1. Huhu says:

      On second thought, federal incentives of $4000 plus 3% of the purchase price up to $100,000, may be better.

  12. unlucky says:

    Go to the Tesla factory where they show the most busy supercharger locations in the world. See that HK has the #2 location.

    Realize that Tesla is not in big trouble in HK.

  13. Martin Winlow says:

    Hmmm… lots of surmising and conjecture here, but from the text of the article it sounds like what has happened in HK is that the import duty on (foreign) Teslas has been re-instated and it’s near 100%. No doubt this applies to any other imported vehicle, too. Perhaps I’m wrong and a HK Tesla owner can set the record straight?

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