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Tesla CEO Elon Musk at a 2015 event to launch the Tesla Model X Crossover SUV in Fremont, California. Justin Sullivan/Getty Images

The Hong Kong government's decision to scrap a tax break for electric vehicles has had a dramatic effect on sales of Tesla cars in the city, according to The Wall Street Journal.

Data analysis from The Journal has shown that zero new Tesla Model S sedans and Model X SUVs were registered with the transport department in April, after the vehicle-registration tax waiver for electrics was discontinued at the start of that month.

Following that, just five privately owned electric cars were registered in May.

The Journal reported a sales surge just before the April 1 rule change, with 2,939 Tesla vehicles registered in March and nearly 3,700 entering the department's books for the first quarter of 2017. The end of the tax break was announced in February.

A Tesla representative told Business Insider that although the company welcomed government policies making "it easier for more people to buy electric vehicles," the company was not dependent on tax concessions for its livelihood.

"In China, for example, we've tripled our revenue from 2015 to 2016 despite a massive tariff and no incentives," the representative said. "At the end of the day, when people love something, they buy it.

"Hong Kong remains a significant market for Tesla, and we continue to sell cars there each quarter. 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."

Tesla's global sales have somewhat mirrored the fluctuation in fortunes in Hong Kong. The first quarter of the year saw the electric-car maker have its best period ever, shipping out 25,000 units and sending its share price rocketing upward to surpass Ford and close in on General Motors in market capitalization. Then for the second quarter, global sales fell to 22,000.

Tesla just last week announced the first batch of its cheaper Model 3 cars would be released at the end this month. The $35,000 vehicle may be dampening appetite for the far more expensive existing models.

The Hong Kong experience also shows how sensitive electric-vehicle sales are to government incentives for cleaner transport technology. The region has only 7.3 million people, but Fox Business reports it is a significant market for luxury cars.

The Tesla representative said the company didn't hold long-term concerns over sales in Hong Kong.

"Tesla absolutely believes that the Hong Kong market will continue to be very strong over the long term because it's clear that the people in Hong Kong love our cars."

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