Tesla cars registered in Hong Kong plummeted from nearly 3,000 in the month of March to zero in April after the government cut a tax break for electric cars April 1, The Wall Street Journal reports.
Registration numbers are the best datasets available to approximate actual cars sold in the country, since a new car in Hong Kong must be registered to be sold. Neither Hong Kong nor Tesla publish real numbers of Tesla cars sold in the country.
After Hong Kong authorities trashed the tax break, the price of a basic Tesla Model S four-door car in the country to rose nearly 60 percent from around $75,000 to $130,000, according to TheWSJ.
Overall, the price of Tesla cars in Hong Kong rose almost 100 percent, a Tesla representative told Business Insider.
“Hong Kong remains a significant market for Tesla, and we continue to sell cars there each quarter,” the representative said. “When the Hong Kong government reduced the tax exemption for electric vehicles and increased the cost of our cars by nearly 100%, it’s to be expected that demand will be impacted in the period immediately following the change, particularly because of the large number who bought just prior to the change being implemented.”
The drastic change in price and sales of electric cars shows how dependent the industry is on government aid, Business Insider reports.
Hong Kong cut the tax break because of private vehicles overcrowding the small country’s roads, according to TheWSJ.
The tax break is discontinued through March 2018. Hong Kong authorities will review whether the policy will be brought back before the deadline.
Tesla is planning to move into China, the next large car market. Tesla’s recent performance in Hong Kong may be a bad sign for how the company will perform in its newest arena, according to Fox Business.
“Hong Kong is the fashionable China,” AutoPacific Inc. analyst Dave Sullivan told Fox Business. “It’s not exactly painting a glowing picture for the future of Tesla in China.”
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