Tesla not the answer to Hong Kong’s need for green urban transport

With its lithium batteries and carbon footprint, Tesla is looking at the past, not the future, and shouldn’t be subsidised by the Hong Kong government

PUBLISHED : Wednesday, 22 June, 2016, 3:58pm
UPDATED : Tuesday, 23 August, 2016, 9:10am

Industry experts call for more support for Tesla growth

Business headline, June 21

And I call for eliminating the already massive subsidy that we give this particular brand of electric car. Tesla is not the answer to our need for green urban transport.

For starters, it was only two months ago that we reported the findings of an American investment research firm, Bernstein, that the Tesla 3 has a bigger carbon footprint than the equivalent BMW car in places that rely predominantly on fossil fuel for electricity generation.

That would be Hong Kong and if anyone wishes to point out that we also have nuclear in our electricity generation mix, let’s remember that the lethal plutonium 239 has a half life of 24,000 years and no-one has yet come up with a safe way of storing it for even a few hundred years. What a wonderful environmental savings on fossil fuel.

I have waited for Tesla’s rebuttal of these findings but I have seen nothing and I am prepared to accept that they are true. I have long suspected so anyway.

If they are true, why do we excuse Tesla from the first registration tax that must be paid on all other cars imported here? A bottom of the line Tesla S now sells for HK$597,000 and the tax on this would normally be near HK$500,000.

It is next to impossible anyway these days to break into the car market as major producer from a standing start unless you have massive government funding

As a result of waiving this tax we have a whole generation of status seekers driving Teslas not because they are green but because they are cool and, most of all, cheap relative to anything like them.

But there is more to the story than just fuel consumption. Go on a cruise down the Irrawaddy River some day and be appalled at the environmental destruction you see around you with backyard mining operations digging for lithium and other rare earth minerals along its banks. I’m told it is even worse in the mainland although I have not seen it there.

If the electric car is to be car of the future it cannot be with lithium ion batteries as its power source. They are fine for small electronic devices but to rely heavily on them for cars would constitute an environmental crime. Teslas are powered by lithium ion batteries alone.

The search is on for something that would better serve the purpose. At one time it concentrated on fuel cells, the power source of space craft, and it may do so again, but a wider range of possibilities is now being explored. Battery technology is definitely a key technology of the future.

It is partly because other car manufacturers are still exploring these options for their electric car offerings that Tesla was able to steal on a march on them with what is really yesterday’s technology. You are looking at the past, not the future, in a Tesla.

But the company does not have good prospects of survival anyway. It reported a record loss in the last quarter of US$282 million and so far has collected over US$2.4 billion in US federal government subsidies. It continues to take a big loss on every car it delivers.

Tesla is in short an Obama administration experiment in politically correct ways to burn money and then ask for more. Hopes of profitability rely on optimistic sales projections that can only be achieved with further subsidies and then only in a booming car market that now actually shows signs of slackness.

But of course it is next to impossible anyway these days to break into the car market as major producer from a standing start unless you have massive government funding. You simply cannot devise original technology to beat the existing standard in thousands of components from door lock slides to headrest frames. It means paying through the nose for licence rights.

In my view our government ought immediately to put the local car market back onto a level playing field by revoking the first registration tax waiver that it granted Tesla.

By all means let us have concessions for an environmentally friendly electric car. But then let it be one of truly leading and sustainable technology that does more than sell on sex appeal and a huge local subsidy that it doesn’t merit.