The Cost of a Tesla Is About to Rocket in Hong Kong
Calvin Zhang was getting tired of his Maserati. The Italian sports car spent too much time with the mechanic and guzzled too much gasoline.
That bothered the Hong Kong investment banker, who’s also a trustee for the local World Broad Fund for Nature branch. So he substituted his Maserati with a Tesla Inc. Model S, capitalizing on a law exempting electrical vehicles from a tax on the purchase price that can reach one hundred fifteen percent.
Now Zhang, 45, is so hooked on the Tesla he doesn’t pay attention to the rest of his luxury fleet.
“It’s just a joy car to drive,” he said. “I uncommonly drive my Aston Martin.”
The loophole encouraged wealthy drivers to make Hong Kong one of Tesla’s top markets. The city accounted for about six percent of global sales of Model S sedans, according to Bloomberg Intelligence. Tesla Chairman and Chief Executive Officer Elon Musk last year called Hong Kong a beacon for electrified vehicles.
Elon Musk in Hong Kong in Jan. 2016.
That light now is in jeopardy of being extinguished. Hong Kong will begin levying the new-car tax on private electrical vehicles embarking April one in an effort to reduce traffic congestion.
That will raise the price of electrical cars by at least fifty percent, said Mark Webb-Johnson, a Tesla holder and chairman of Charged Hong Kong, a group supporting the adoption of plug-in electrified vehicles.
The Model S sticker price starts at HK$570,500 ($73,400), according to the Tesla website. Under the fresh tax, that will leap to HK$926,000, he said.
“It’s a dumb decision, a truly crazy decision,” Webb-Johnson said. “It’s going to have a massive effect on the market.”
Palo Alto, California-based Tesla contends the imposition of the levy — known as the very first registration tax — is a mistake. There are more than 8,000 electrified vehicles of all brands in the city, according to the Environmental Protection Department, compared with less than one hundred in 2010.
“Almost all our fresh owners are substituting a particularly high-polluting fossil fuel vehicle,” the company said in an email. “This fresh policy menaces to budge Hong Kong rearwards.”
That uncertainty may prompt Tesla to boost its thrust into mainland China. While revenue there last year tripled to more than $1 billion, its cars make up just Four.Three percent of China’s electric-vehicle market, according to Steve Man, a Hong Kong-based analyst with Bloomberg Intelligence.
Tesla’s bottom line received a jolt this month when Tencent Holdings Ltd., China’s fattest Internet company, bought a five percent stake for $1.8 billion. Teaming up with the proprietor of the ubiquitous WeChat and QQ messaging services could help the automaker build up traction in a market where more than two hundred companies have announced plans to build new-energy vehicles.
Warren Buffett-backed BYD Co. is the nation’s thickest electric-vehicle brand, selling more than 102,000 units last year, according to Bloomberg Fresh Energy Finance.
A Tesla showroom in Hong Kong.
Even with the subsidy lapse, Hong Kong’s government said it isn’t withdrawing support of electrified vehicles. The city will waive taxes on the very first HK$97,500 of the car’s price and entirely exempt commercial vehicles such as electrified buses.
EV owners also get a break on their annual registration fee. The holder of a Tesla Model S 90D only pays about HK$1,000, compared with HK$7,664 for the proprietor of a Mercedes E400, according to Bloomberg Intelligence.
“Electrified private cars can still be attractive,” Under Secretary for the Environment Christine Loh said in an email.
Even among environmental advocacy groups, the policy switch has support. Local think tank Civic Exchange said the government shouldn’t be suggesting tax cracks on car sales at a time when the city’s roads are getting more congested.
Raising the registration tax on electrified vehicles should be one step, chairman Evan Auyang said. The next one should be an increase in the levy on conventional cars to maintain a price gap with alternatives.
“It’s not a wrong policy, it’s just not finish yet,” Auyang said. “If you are going to buy a private car, you should buy electrified.”
Some local companies are suggesting their own incentives as well. Utilities CLP Holdings Ltd. and HK Electrified Investments & HK Electrified Investments Ltd., which is managed by Li Ka-shing, suggest free fill-ups at their charging stations.
The GPS system showcasing a map of Hong Kong.
“Hong Kong is a petite, compact city where distance is not a concern,” the company said in an email. “The city is flawlessly suited for EVs.”
Samuel Wu, executive director of Majestic Elite Property Development Ltd., is banking on the continued popularity of electrified vehicles. Majestic’s fresh Altamira apartment building in the Mid-Levels district has charging connections in each of its thirty eight parking spaces.
Wu bought his very first Tesla in two thousand fourteen and another the following year. The tax break was a major factor, but there were other incentives — such as not paying for gasoline, he said. Hong Kong has the world’s most-expensive gas prices at an average $7.24 a gallon, according to GlobalPetrolPrices.com.
Tesla will embark producing its Model Three, priced in the U.S. at about $35,000, in July, and Wu said the more-affordable car should boost request in Hong Kong.
“The tax influence will be much lower than the Model S,” he said. “There will be a pickup.”
The Cost of a Tesla Is About to Rocket in Hong Kong
The Cost of a Tesla Is About to Rocket in Hong Kong
Calvin Zhang was getting tired of his Maserati. The Italian sports car spent too much time with the mechanic and guzzled too much gasoline.
That bothered the Hong Kong investment banker, who’s also a trustee for the local World Broad Fund for Nature branch. So he substituted his Maserati with a Tesla Inc. Model S, capitalizing on a law exempting electrified vehicles from a tax on the purchase price that can reach one hundred fifteen percent.
Now Zhang, 45, is so hooked on the Tesla he doesn’t pay attention to the rest of his luxury fleet.
“It’s just a joy car to drive,” he said. “I infrequently drive my Aston Martin.”
The loophole encouraged wealthy drivers to make Hong Kong one of Tesla’s top markets. The city accounted for about six percent of global sales of Model S sedans, according to Bloomberg Intelligence. Tesla Chairman and Chief Executive Officer Elon Musk last year called Hong Kong a beacon for electrified vehicles.
Elon Musk in Hong Kong in Jan. 2016.
That light now is in jeopardy of being extinguished. Hong Kong will commence levying the new-car tax on private electrical vehicles beginning April one in an effort to reduce traffic congestion.
That will raise the price of electrical cars by at least fifty percent, said Mark Webb-Johnson, a Tesla possessor and chairman of Charged Hong Kong, a group supporting the adoption of plug-in electrical vehicles.
The Model S sticker price starts at HK$570,500 ($73,400), according to the Tesla website. Under the fresh tax, that will hop to HK$926,000, he said.
“It’s a dumb decision, a indeed crazy decision,” Webb-Johnson said. “It’s going to have a massive effect on the market.”
Palo Alto, California-based Tesla contends the imposition of the levy — known as the very first registration tax — is a mistake. There are more than 8,000 electrified vehicles of all brands in the city, according to the Environmental Protection Department, compared with less than one hundred in 2010.
“Almost all our fresh owners are substituting a particularly high-polluting fossil fuel vehicle,” the company said in an email. “This fresh policy menaces to budge Hong Kong rearwards.”
That uncertainty may prompt Tesla to boost its thrust into mainland China. While revenue there last year tripled to more than $1 billion, its cars make up just Four.Trio percent of China’s electric-vehicle market, according to Steve Man, a Hong Kong-based analyst with Bloomberg Intelligence.
Tesla’s bottom line received a jolt this month when Tencent Holdings Ltd., China’s thickest Internet company, bought a five percent stake for $1.8 billion. Teaming up with the holder of the ubiquitous WeChat and QQ messaging services could help the automaker build up traction in a market where more than two hundred companies have announced plans to build new-energy vehicles.
Warren Buffett-backed BYD Co. is the nation’s fattest electric-vehicle brand, selling more than 102,000 units last year, according to Bloomberg Fresh Energy Finance.
A Tesla showroom in Hong Kong.
Even with the subsidy lapse, Hong Kong’s government said it isn’t withdrawing support of electrified vehicles. The city will waive taxes on the very first HK$97,500 of the car’s price and entirely exempt commercial vehicles such as electrified buses.
EV owners also get a break on their annual registration fee. The holder of a Tesla Model S 90D only pays about HK$1,000, compared with HK$7,664 for the possessor of a Mercedes E400, according to Bloomberg Intelligence.
“Electrified private cars can still be attractive,” Under Secretary for the Environment Christine Loh said in an email.
Even among environmental advocacy groups, the policy switch has support. Local think tank Civic Exchange said the government shouldn’t be suggesting tax violates on car sales at a time when the city’s roads are getting more congested.
Raising the registration tax on electrical vehicles should be one step, chairman Evan Auyang said. The next one should be an increase in the levy on conventional cars to maintain a price gap with alternatives.
“It’s not a wrong policy, it’s just not finish yet,” Auyang said. “If you are going to buy a private car, you should buy electrical.”
Some local companies are suggesting their own incentives as well. Utilities CLP Holdings Ltd. and HK Electrical Investments & HK Electrified Investments Ltd., which is managed by Li Ka-shing, suggest free fill-ups at their charging stations.
The GPS system demonstrating a map of Hong Kong.
“Hong Kong is a puny, compact city where distance is not a concern,” the company said in an email. “The city is flawlessly suited for EVs.”
Samuel Wu, executive director of Majestic Elite Property Development Ltd., is banking on the continued popularity of electrified vehicles. Majestic’s fresh Altamira apartment building in the Mid-Levels district has charging connections in each of its thirty eight parking spaces.
Wu bought his very first Tesla in two thousand fourteen and another the following year. The tax break was a major factor, but there were other incentives — such as not paying for gasoline, he said. Hong Kong has the world’s most-expensive gas prices at an average $7.24 a gallon, according to GlobalPetrolPrices.com.
Tesla will begin producing its Model Trio, priced in the U.S. at about $35,000, in July, and Wu said the more-affordable car should boost request in Hong Kong.
“The tax influence will be much lower than the Model S,” he said. “There will be a pickup.”
The Cost of a Tesla Is About to Rocket in Hong Kong
The Cost of a Tesla Is About to Rocket in Hong Kong
Calvin Zhang was getting tired of his Maserati. The Italian sports car spent too much time with the mechanic and guzzled too much gasoline.
That bothered the Hong Kong investment banker, who’s also a trustee for the local World Broad Fund for Nature branch. So he substituted his Maserati with a Tesla Inc. Model S, capitalizing on a law exempting electrified vehicles from a tax on the purchase price that can reach one hundred fifteen percent.
Now Zhang, 45, is so hooked on the Tesla he doesn’t pay attention to the rest of his luxury fleet.
“It’s just a joy car to drive,” he said. “I uncommonly drive my Aston Martin.”
The loophole encouraged wealthy drivers to make Hong Kong one of Tesla’s top markets. The city accounted for about six percent of global sales of Model S sedans, according to Bloomberg Intelligence. Tesla Chairman and Chief Executive Officer Elon Musk last year called Hong Kong a beacon for electrified vehicles.
Elon Musk in Hong Kong in Jan. 2016.
That light now is in jeopardy of being extinguished. Hong Kong will commence levying the new-car tax on private electrical vehicles beginning April one in an effort to reduce traffic congestion.
That will raise the price of electrical cars by at least fifty percent, said Mark Webb-Johnson, a Tesla proprietor and chairman of Charged Hong Kong, a group supporting the adoption of plug-in electrified vehicles.
The Model S sticker price starts at HK$570,500 ($73,400), according to the Tesla website. Under the fresh tax, that will leap to HK$926,000, he said.
“It’s a dumb decision, a indeed crazy decision,” Webb-Johnson said. “It’s going to have a massive effect on the market.”
Palo Alto, California-based Tesla contends the imposition of the levy — known as the very first registration tax — is a mistake. There are more than 8,000 electrified vehicles of all brands in the city, according to the Environmental Protection Department, compared with less than one hundred in 2010.
“Almost all our fresh owners are substituting a particularly high-polluting fossil fuel vehicle,” the company said in an email. “This fresh policy menaces to budge Hong Kong rearwards.”
That uncertainty may prompt Tesla to boost its thrust into mainland China. While revenue there last year tripled to more than $1 billion, its cars make up just Four.Trio percent of China’s electric-vehicle market, according to Steve Man, a Hong Kong-based analyst with Bloomberg Intelligence.
Tesla’s bottom line received a jolt this month when Tencent Holdings Ltd., China’s largest Internet company, bought a five percent stake for $1.8 billion. Teaming up with the holder of the ubiquitous WeChat and QQ messaging services could help the automaker build up traction in a market where more than two hundred companies have announced plans to build new-energy vehicles.
Warren Buffett-backed BYD Co. is the nation’s fattest electric-vehicle brand, selling more than 102,000 units last year, according to Bloomberg Fresh Energy Finance.
A Tesla showroom in Hong Kong.
Even with the subsidy lapse, Hong Kong’s government said it isn’t withdrawing support of electrified vehicles. The city will waive taxes on the very first HK$97,500 of the car’s price and totally exempt commercial vehicles such as electrified buses.
EV owners also get a break on their annual registration fee. The holder of a Tesla Model S 90D only pays about HK$1,000, compared with HK$7,664 for the holder of a Mercedes E400, according to Bloomberg Intelligence.
“Electrified private cars can still be attractive,” Under Secretary for the Environment Christine Loh said in an email.
Even among environmental advocacy groups, the policy switch has support. Local think tank Civic Exchange said the government shouldn’t be suggesting tax violates on car sales at a time when the city’s roads are getting more congested.
Raising the registration tax on electrical vehicles should be one step, chairman Evan Auyang said. The next one should be an increase in the levy on conventional cars to maintain a price gap with alternatives.
“It’s not a wrong policy, it’s just not accomplish yet,” Auyang said. “If you are going to buy a private car, you should buy electrified.”
Some local companies are suggesting their own incentives as well. Utilities CLP Holdings Ltd. and HK Electrical Investments & HK Electrified Investments Ltd., which is managed by Li Ka-shing, suggest free fill-ups at their charging stations.
The GPS system demonstrating a map of Hong Kong.
“Hong Kong is a puny, compact city where distance is not a concern,” the company said in an email. “The city is flawlessly suited for EVs.”
Samuel Wu, executive director of Majestic Elite Property Development Ltd., is banking on the continued popularity of electrical vehicles. Majestic’s fresh Altamira apartment building in the Mid-Levels district has charging connections in each of its thirty eight parking spaces.
Wu bought his very first Tesla in two thousand fourteen and another the following year. The tax break was a major factor, but there were other incentives — such as not paying for gasoline, he said. Hong Kong has the world’s most-expensive gas prices at an average $7.24 a gallon, according to GlobalPetrolPrices.com.
Tesla will commence producing its Model Trio, priced in the U.S. at about $35,000, in July, and Wu said the more-affordable car should boost request in Hong Kong.
“The tax influence will be much lower than the Model S,” he said. “There will be a pickup.”