Does Hong Kong want to be a clean, green city? Cutting the electric vehicle tax waiver is not a smart move
Tara Joseph says ending the full registration tax waiver on EVs is at odds with Hong Kong’s reputation for transparency and innovation, as well as its goals for cleaner air and ‘smart city’ status
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Such policy changes don’t just have a dampening effect on consumer behaviour. The ramifications spread to the investment decisions of big corporations too. The rising trend in sales gave companies the confidence to make long-term financial commitments to support development and deployment of cleaner technology vehicles with battery, service and charging technologies.
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In the six months before the tax waiver change was announced, 1,391 new Tesla cars were registered in Hong Kong. But in the two months following its scrapping, not a single one was sold in the city.
The government seems to have assumed that many EVs being purchased in Hong Kong were discretionary “second cars” that would not be replaced with cheaper conventional vehicles if the tax waiver were reduced. Statistics show, though, that this isn’t the case. Private car registrations are on track to increase this year by a higher percentage than in 2016 – even factoring out a big spike in EV registrations in March, just before the tax waiver cap took effect. It’s just that a much higher percentage of the new cars hitting the road this year are fossil-fuel burners, rather than electric vehicles.
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The policy reversal also has ramifications that go beyond blurring Hong Kong’s commitment to a cleaner future. It also mars Hong Kong’s long-standing reputation as a leading economy based on principles of transparency and openness.
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Lam has spoken about the need to enable the government to become a facilitator and market creator, rather than a regulator. The sudden about-turn on tax incentives for EVs was a move in the opposite direction. The decision was made behind closed doors and without addressing consumers or companies who invested a great deal to bring Hong Kong up the value chain.
We believe that the new administration can find balanced solutions that reduce congestion without sacrificing Hong Kong’s adoption of green technology and promotion of sustainable living. In order to remain competitive and secure a bright future, Hong Kong must adopt a fresh approach to green initiatives and new technologies.
Tara Joseph is president of the American Chamber of Commerce in Hong Kong