With Tesla’s Model S now Hong Kong’s top-selling sedan, chief Elon Musk predicts city to become world leader in electric vehicles

Paypal, SpaceX and Tesla innovator Musk has eyes on the future of electric vehicles in Hong Kong

PUBLISHED : Monday, 25 January, 2016, 6:59pm
UPDATED : Tuesday, 26 January, 2016, 11:41am

Electric car-maker Tesla expects Hong Kong to be the “leader of the world” in electric vehicle adoption, following phenomenal growth in the city last year, CEO Elon Musk said.

Tesla sold 2,221 Model S sedans in 2015, making the electric car the top-selling sedan.

“Hong Kong is a beacon city for electric vehicles, [it can] serve as an example to the rest of the world on what to do,” Musk said yesterday. “I currently do not foresee any city exceeding Hong Kong. It will be the leader of the world,” he added.

From 2014 to 2015 alone, new registrations for electric vehicles in Hong Kong grew 270 per cent, said Tesla. Its Model S vehicle accounts for over 70 per cent of all electric vehicles on the road in Hong Kong.

As of end December, there were 4,198 electric vehicles on the road, compared to 100 electric vehicles in Hong Kong at the end of 2010, according to statistics from the Environmental Protection Department in Hong Kong.

Musk also praised the Hong Kong government’s policies for promoting electric vehicles as “excellent”.

The government has been pushing for electric vehicles by introducing a first registration tax waiver for owners who purchase electric cars. Companies which buy electric vehicles are also given tax deductions on the expenditure in the first year.

Watch: Can Tesla's new 'autopilot' system work in crowded Hong Kong?

Despite Tesla’s success in the city, it is facing greater resistance in entering the China market, with media reports last year suggesting low consumer demand and an excess of inventory.

“We receive a lot more support from the Hong Kong government than from the mainland China government in electric vehicles,” said Musk, who said high import duties and a lack of local incentives make the cost of a Tesla car in China greater than anywhere else.

He confirmed that Tesla is investigating options for local production on the mainland this year and hopes reveal more details in mid-2016.

Musk also emphasised that Asia will be the “biggest area of expansion” for the company in the next year or two, with plans to “substantially” expand its charger network in the region.

READ MORE: Hong Kong drivers using new Tesla autopilot software warned they are ‘committing an offence’

Despite Hong Kong boasting the highest density of Tesla superchargers and one of the lowest electric vehicle-to-charger ratios in the world, with just over two cars sharing a public charger in the city, electric vehicle owners say that there is a lack of home charging facilities and complain of petrol vehicles taking up charging spots around Hong Kong.

At the event, Musk also admitted that demand for Tesla’s electric cars would be affected by the dip in world oil prices,.

Our strategy is to focus on product differentiation, to make Tesla cars as compelling as possible
Elon Musk

“The low oil prices will definitely have some negative effect because they change the economics of ownership,” Musk told the South China Morning Post.

“Our strategy is to focus on product differentiation, to make Tesla cars as compelling as possible, so that even when oil prices are low, [customers] will still want to buy the Model S, Model X or the Model 3 down the road,” said Musk.

Tesla’s Model 3 sedan, which is expected to be the company’s first mass-market model with an estimated price tag of US$35,000, will be launched at the end of next year, said Musk.

Musk will meet Chief Executive Leung Chun-ying today, hoping to discuss bringing Tesla’s full Autopilot package to drivers in the city, after the company disabled some of its autopilot features that are still under review by the Transport Department.

Additional reporting by Naomi Ng