Electric car buyers to pay more as tax waivers see big reduction in Hong Kong budget
Government ends full exemptions from first registration tax on electric cars, in a move decried by concern groups as a setback for the growth of clean energy
Electric car buyers will have to loosen their purse strings after the government drastically reduced the waiver on the first registration tax with immediate effect, a move concern groups said was a blow to the use of clean energy in the city.
Financial Secretary Paul Chan Mo-po in his budget speech on Wednesday said discounts given on the tax would be capped at HK$97,500, meaning a buyer of a Tesla Model S would end up paying about 80 per cent of the tax payable on the car.
Full first-time tax exemptions had been offered since 1994.
An electric car priced at HK$600,000 will require the buyer to pay about HK$487,500 in first registration tax after the capped waiver, taking the total cost of buying the car to almost HK$1.1 million.
The new tax took effect at 11am on Wednesday, meaning customers placing orders for electric private cars after that time will need to pay the revised rate.
“In consideration of the overall growth of the city’s private car fleet in recent years and the increasing acceptance of electric private cars by drivers, the government has decided to revise the arrangement,” Chan said.
“From April 1, 2017 to March 31, 2018, the first registration tax for electric commercial vehicles, motorcycles and motor tricycles will continue to be fully waived. However, the first registration tax waiver for electric private cars will be capped at HK$97,500,” he said.
As at the end of January there were 7,434 electric vehicles on the road among more than 810,000 registered vehicles, up from less than 100 at the end of 2010.
The government first brought in the full tax exemption for electric cars in 1994 in an effort to promote their use and reduce roadside pollution.
A spokeswoman for electric carmaker Tesla said the firm was “disappointed” the government had withdrawn its support for electric cars.
“Over the past few years, the impressive growth in all kinds of electric vehicles on Hong Kong’s roads has helped create a cleaner, more sustainable city without increasing congestion ... Today’s action threatens to move Hong Kong backwards,” she said.
Electric car concern group Electrify Hong Kong said they could not understand the rationale behind the government’s decision.
“The new measure may completely strangle the development of electric vehicles in Hong Kong,” it said.