Decision to cut Hong Kong’s electric vehicle tax waiver is ‘backwards’ and sends wrong message, critics say

From April 1, a Tesla Model S will set buyers back about HK$1.5 million, up from HK$800,000

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The Hong Kong government has reduced its tax waivers for e-cars. Photo: Dickson Lee

Published: 4:20pm, 25 Feb 2017Updated: 3:37pm, 27 Feb 2017

The government has been accused of targeting electric vehicles and setting Hong Kong back as an environmentally conscious and high tech city, following the removal of a tax break this week.

Earlier this week, Financial Secretary Paul Chan Mo-po announced that the full waiver of First Registration Tax for e-cars – a measure that has been in place for more than 20 years – would end on March 31, with the tax discount to be capped at HK$97,500. The move was aimed at curbing car growth and improving traffic.

But Dr Jeffrey Hung, head of research, development and strategy at Friends of the Earth (HK), questioned the logic of the policy change.

“Why target electric cars? There are many ways to reduce traffic congestion,” he said. “They could improve public transportation, set up low-emission zones, increase licence fees or electronic road pricing. Before there was an incentive for electric cars, but now there is a disincentive.”

From April 1, a Tesla Model S, which costs HK$800,000 under the current full tax waiver, will now set buyers back about HK$1.5 million. A BMW i3, currently HK$430,000, will cost HK$635,000.

Tesla said the government’s decision “threatens to move Hong Kong backwards”.