(Or: “How incentives influence electric vehicle sales.”)
As in other occasions and latitudes, incentives can heavily distort plug-in vehicle markets across the world. This year it happened again in Hong Kong.
After years exempting electric cars from the heavy taxation that regular cars suffer in the territory, the local government decided to change incentives, heavily penalizing the Tesla models. These changes were justified by the need to keep incentives for EVs but the preference that customers purchase smaller models that would use less space in the already congested streets of Hong Kong.
Until the beginning of this year, Teslas were by far the most successful electric cars in the territory, so the changes heavily hit Tesla, creating an anticipation effect that made their registrations jump from an average of 100/200 units per month to 590 last February and 2,939(!) in March, the last month in which the old incentives scheme was available.
Now, what happened in April, with Teslas becoming tens of thousands of dollars more expensive?
That’s right, Tesla didn’t deliver any units.
Although the May results are still unknown, it is safe to say that the next few months will see next to no deliveries by Tesla Hong Kong, which proves that incentives should be handled with care, avoiding big changes, if we want to avoid freak events like the ones in the Netherlands.
But do not fret Tesla fans, despite some catastrophic forecasts around this, just like the stellar performance in the first quarter of the year was a one-time thing, with Hong Kong becoming one of the most significant markets for Tesla at that time, this sales drought will also become a thing of the past as the year advances and the 100D and P100D versions become available in the territory (to the natural delight of millionaires across Pollock’s Path on the Peak and other luxurious areas).
Besides, Tesla has other priorities to worry about, like writing history launching the Model 3, the first model in EV history to play head-to-head with some of the most popular gasoline models in the world, including on price — and without incentives taken in account.
Speaking of incentives, expect them to be slowly removed, starting in the next two to three years, and hopefully avoiding peak sales like the ones we just saw in Hong Kong and elsewhere.
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