Tesla Model X Launch In Hong Kong - Image Via South China Morning Post

Tesla Model X Launch In Hong Kong - Image Via South China Morning Post

Hong Kong was set to be a global leader for electric vehicles, but Tesla may pull out if policies don't change.

We hear continued talk about China being the biggest automotive market in the world and the "place to be" when it comes to electric car manufacturers. However, as we previously reported, there are many issues making it difficult for electric vehicle makers to succeed in the region.

Last year, Hong Kong removed full registration tax incentives for EVs, which forced prices to skyrocket as much as 80 percent. There's also a cap involved that allows for only so much support for electric car buyers. Both are impacting companies like Tesla significantly and EV sales have tanked as a result.

Tesla Hong Kong Service Center

Tesla Hong Kong Service Center

The very first month after the incentives were eliminated (April 2017), not a single new EV was registered in Hong Kong. For the rest of the year, Hong Kong saw only 99 new registrations, compared to the 2,078 from the same time period in 2016. Tesla only sold 32 vehicles during those months. Conversely, in March, just prior to the new legislation, buyers raced to get into new EVs, with a total of 2,939 deliveries.

The South China Morning Post reported:

“Scaling down Tesla’s operation in Hong Kong is a natural and logical consequence if the number of customers has dwindled prompted by a reduction of government incentives. Without government support, who is ­willing to invest in green technology?” 

Hong Kong officials claim that the EV credit was removed mostly due to its benefit being limited to upper-class consumers, as well as growing traffic congestion in the area. Last year, prior to the elimination of the incentive, there were 10,589 electric cars registered in Hong Kong, most of which were Telsa Model S and X vehicles. Essentially, the Silicon Valley automaker was becoming too popular in Hong Kong, and too many Tesla vehicles were being sold in the area. The Post continued:

“The sale of Tesla cars in one month was equal to the annual sales figure of some petrol car brands. They all complained that the rapid growth of Tesla these few years had made their lives really difficult.”

Tesla CEO Elon Musk has previously referred to Hong Kong as a "beacon city" for EV adoption, but now, it seems the opposite is true. The Post reached out to Tesla for comment. The automaker replied:

“We remain hopeful that the government will continue to encourage more electric vehicles on the road and preserve Hong Kong’s lead in clean, sustainable living.”

Source: South China Morning Post, Teslarati