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European trade body calls for Hong Kong tax breaks for hybrid cars

At the moment, only electric vehicles get tax concessions; group says extending this to hybrids would prompt more people to drive them and thereby cut air pollution

PUBLISHED : Sunday, 05 February, 2017, 9:01pm
UPDATED : Sunday, 05 February, 2017, 11:00pm

A European motoring trade group has called on the government to start subsidising hybrid cars, claiming such a move could prompt more people to drive such vehicles and thereby help to reduce roadside air pollution.

In a submission to the government ahead of the budget later this month, the European Automotive Council, which is part of the European Chamber of Commerce in Hong Kong, called for the introduction of tax subsidies for plug-in hybrids.

Tesla urges Hong Kong government to keep e-vehicle tax breaks

While hybrids at the moment do not receive any subsidies , electric cars are not taxed, which has prompted a surge in their sales. Tesla Model S was the best selling car of any type in Hong Kong last year. Many Tesla buyers were former drivers of European cars.

“For hybrids, the car can be driven either fully electric or with the combustion engine. The current approach heavily subsidises luxury battery electric vehicles, adding more cars to Hong Kong roads,” said Andreas Binder, who chairs the European Automotive Council.

“We would rather like to see a balanced, holistic and reliable long-term plan with a more effective allocation of resources,” said Binder, who is also the president of Mercedes Benz in Hong Kong.

The trade association calculates that since 2010, the tax-subsidising scheme for electric cars has benefitted 5,000 car owners at a total cost of HK$2.7 billion.

The Environmental Protection Department told the Post that the government did not offer first registration tax concessions to hybrids because they “still have tail-pipe emissions”.

“While some well-designed hybrid cars might emit fewer air pollutants than conventional cars, their emissions will still aggravate roadside air pollution. We therefore see no grounds for incentivising their use,” a spokesman said.

Motoring choices, plug-in hybrid vehicles help to accelerate clean mobility

An expert from the Hong Kong Productivity Council said hybrids helped to bring about substantially cleaner air.

“When road conditions are suitable, a hybrid vehicle can be driven exclusively with the electric motor, so its gas exhaust is certainly less than for petrol cars,” said Dr Lawrence Cheung Chi-chong, the council’s director of technology development.

“In terms of fuel consumption, hybrids save at least 50 per cent, hence the waste gas emission is halved.”

However, Dr Hung Wing-tat, an associate professor of transport studies at Polytechnic University, said he was against giving subsidies to hybrids from a transport policy point of view.

“If hybrids get tax subsidies, more people will go and buy these cars and there will be more cars on the road. This is against the government’s objective of reducing the number of private cars and encouraging the use of public transport,” Hung said.

But Rene Koneberg, head of passenger vehicles at the Automotive Council, argued the net number of cars on the street would be the same if hybrids received tax subsidies, as people would simply choose to buy hybrids when they replace existing vehicles.

“You are just phasing out the old cars with the older technology with newer technology,” said Koneberg, who is the managing director of Audi Hong Kong.

The European Automotive Council also called on the government to push for the use of the more environmentally friendly Euro 6 standard in commercial vehicles and public light buses.