Survey Says Hong Kong Public Supports Policy To Stay Plugged In
At the end of this month Hong Kong SAR Government will make a decision on whether to continue or change the controversial policy by capping the tax wavier for private electric vehicles purchase at approx USD12,500. This policy came into effect on April 1st 2017 after financial secretary Paul Chan announced his decision to not extend the full tax wavier of private EV from first registration tax that has been enjoyed by the city since 1994. The government reasoning behind their decision was to slow down the increase of vehicles on the road as it has increased 50% over the last decade. It would be a legitimate decision if it only also had increased the tax on gasoline models as well. In fact the total number of vehicle has continue to increase with majority gasoline models.
The original goal of the full tax wavier was to encourage the use of more environmental friendly vehicles to reduce roadside pollution but the growth has been quite slow over the first two decades. It was not until more attractive looking EVs with longer range came to the local market that gave a substantial boost in numbers. EV model included vehicles from players like BMW, Nissan, Renault, Tesla and Volkswagon. In 2014, Tesla took the spot light when it launched their right hand drive Model S in the city. The car attracted many new buyers to the electric vehicle market and took substantial market share from its gasoline competitors with its simiplistic design, quick acceleration, free supercharging and its disruptive direct online sales approach.
Before the tax wavier capped a based Model S would cost similar to a BMW 5 series or Mercedes E class. Without the full tax wavier a Model S would be closer to BMW 7 series or Mercedes S class. This resulted only 32 Tesla were sold between April to December 2017 in the city. Figures from other manufacturers with EV models also took a hit but without confirmed numbers. We have heard from front line sales people that customers have chosen gasoline models over EV models due to the tax capped and limited charging facilities at private apartment building or estates. The unnamed car salesmen said that the customer is very supportive to clean environment but the price tag on capped tax wavier has forced them to stick with gasoline models.
Sources from the local car industry has told South China Morning Post (a local newspaper in Hong Kong own by Alibaba group) that well established manufacturers had lobbied Paul Chan to remove the full tax waiver for electric vehicles because they felt threaten by the insane growth of EVs. Tesla which dominated 90 percent of the market leaving the remaining percent to traditional gasoline manufacturers with limited or less attractive EV offerings. Tesla monthly sales figure between April 2016 (Facelift Model S arrived in HK) to February 2017 (Peak delivery month of Model X) were on average of 200+ vehicles per month where at certain months equals to the amount of annual sales volume of some gasoline brands.
Quotes from SCMP sources:“The sales 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 difficult.”
Moving forward, with new announcement expected from the government about the EV tax wavier later this month Charged Hong Kong (an association promoting the use of electric vehicles in the city) has recently commissioned the Public Opinion Programme (POP) of the University of Hong Kong to conduct an opinion survey on EV development policy.
Quotes from ChargedHK Press Release:“The results show that 81.1% of respondents support the popularization of private EV in Hong Kong, whilst 74.5% of respondents are dissatisfied with the current Government’s initiatives on EV promotion. The opinion survey was conducted in mid-January, with a sample of 804 respondents who are Hong Kong residents aged 18 or above. Over 80% of respondents support the popularization of EV, in which 42.3% says “Very Support” and 38.7% “Fairly Support”.Since April 2017, the Government capped the First Registration Tax (FRT) wavier for private EV at HK$97,500. 62.3% of the respondents found this move has reduced potential buyers’ incentive to purchase an EV. Nearly 75% of the respondents agree with increasing the amount of FRT waiver, with 33.1% showing “Very agree” whilst 41.4% “Fairly Agree”. Moreover, over 80% of the respondents express their support for the “Switcher Programme”, where owners of Internal Combustion Engine vehicles could enjoy full FRT waiver if switching to EV. Only less than 10% of the respondents oppose it.Regarding the charging facilities, the respondents in general have the perception that charging facilities in Hong Kong are inadequate. The survey finds that 85.3% of the respondents think there is a lack of charging facilities in Hong Kong, while only 3.1% of the respondents found the amount of chargers adequate.”Edwin Lee, vice chairman of Charged Hong Kong, comments, “the results suggest that citizens are in generalof the popularization of EV. However, the Government’s promotion of EV adoption is not effective. We urge the Government to consider re-introducing tax incentives as well as building more charging facilities.”Chairman of Charged Hong Kong, Mr Mark Webb-Johnson said the number of EV in Hong Kong has been gradually increasing since 2014. To date, there are over 10,000 registered private EVs. However, after the Government cut the tax waiver last year, the price of EV has increased by at least 50% in general. Thus, it has resulted in a drastic drop in EV sales by 95% year on year as many potential buyers switched to Internal Combustion Engine (ICE) vehicles. With more EV brands and models available in the market, drivers wish to enjoy a greater variety of choices. Mark Webb-Johnson hopesthe Government would provide supporting policies, such as increasing the FRT waiver for private EV, offering the “Switch Programme” and building more public charging facilities.
Charged Hong Kong has raised three suggestions to the government and hopes they would consider them seriously to be included in the upcoming budget.
1. Increase the FRT waiver for private EV
2. Offer the “Switch Programme” to encourage car owners to switch to EV
3. Build and upgrade more public charging facilities.
We hope the government will correct its policy to continue its path to support and encourage use of EV as the poll shows that a majority of the citizens want to plug-in and stay charged. The continuation of EV development will benefit the whole community by eliminating the harmful roadside pollution. The result may mean less tax income for the government by offering tax wavier but the improved health of the population should reduce a large percent of healthcare expenditures in the financial budget.