Hong Kong: Tesla sales take a hit following tax incentive cut
TESLA saw sales of its electric cars come to a standstill after authorities slashed a tax incentive for green cars.
No newly-bought Tesla model car was registered in Hong Kong in April after the government cut tax breaks for electric vehicles on April 1, The Wall Street Journal reports.
The month before the deadline, 2,939 Tesla vehicles were registered in Hong Kong – almost twice as many as in the last six months of 2016.
The drop in the incentive is a blow for the company, which has seen deliveries affected due to a battery-pack production shortfall, and demonstrates how reliant on government incentives the company is to maintain sales.
— David Marcelis (@david_marcelis) July 9, 2017
The Hong Kong government will review the policy in March 2018.
Once the subsidiary was cut, the cost of a basic Tesla Model S four-door car in Hong Kong effectively rose to around US$130,000 from less than US$75,000.
The Elon Musk-owned Tesla does not break down sales country by country, but has acknowledged a slowdown in sales, WSJ reports.
“Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles; however, our business does not rely on it,” the company said.
It added sales in China, where it faces large tariffs, has risen without subsidies.
Last week, the company sold more than 22,000 cars worldwide, up 53 percent from a year earlier.
This, however, still falls short of analysts’ estimates and the 25,000 it sold in the first three months of 2017.
The company benefits from incentives elsewhere, such as Europe. Germany exempts electric vehicles from circulation taxes for 10 years, while the United Kingdom exempts them from an annual circulation tax and full electric cars are exempt from company car tax, according to the European Automobile Manufacturers’ Association.
Tesla has previously warned investors in securities filings incentives can change and “could have some impact on demand for our products and services.”