(Hong Kong) – BYD Auto Co. has seen its electric-powered models gain acceptance by the public transportation system in its hometown of Shenzhen, largely due to the support of city authorities, but the carmaker has encountered bumps in the road across the border in Hong Kong.

BYD e-taxis hit the roads of Shenzhen in 2010, when the city's first electric taxi firm, Pengcheng Electric Taxi Co., was formed. In 2013, Pengcheng, a joint venture between state-owned Shenzhen Bus Group and privately held BYD, reported a profit of 12 million yuan. As of 2014, 850 BYD electric taxis were operating in Shenzhen.

As China's largest maker of electric cars in term of sales and the main taxi supplier for Shenzhen, BYD's prospect in the southern city seem set for more success because the city government is ambitious to expand use of electric cars.

In early 2015, Shenzhen's transportation department said that by the end of the year the city would have more than 4,500 electric taxis. To encourage cab drivers to replace their traditional vehicles with electric models, the city's government announced it would offer subsidies of up to 130,000 yuan to drivers who bought electric cars.

Cai Yu, deputy director of Shenzhen's economic planning body, said in January that drivers of electric taxis and their companies will be exempt from license plate fees for five years and also benefit from other preferential policies. Cai said that the government wanted nearly three-quarters of Shenzhen's 16,000 taxis to be of the electric variety within the next five years.

Yet BYD has had less success in neighboring Hong Kong. In 2013, when BYD leased its first batch of 48 electric taxis to the former British colony, Wang Chuanfu, its chairman, said that "Hong Kong is the most suitable place in the world for electric vehicles," due to its small urban area, dense population and well-developed public transportation network.

BYD leased the vehicles to two local taxi company associations, the Hong Kong Taxi & PLB Association and the N.W. Area Taxi Drivers and Operators Association, for two years. At the time, the company said it hoped to increase the number to 3,000 in two years.

However, Chen Zhou, chairman of the Hong Kong Taxi & PLB Association, said last year that 45 of the taxis have been returned to BYD. In a January interview with Caixin, BYD's Wang attributed the disappointing result to the "absence of policies to promote electric taxis."

Cold Shoulder

Hong Kong's government offers some tax break for electric car purchases that lower the sticker price by about 3.7 percent. Drivers of the vehicles are also eligible for a one-off tax rebate.

Despite this, a BYD electric car priced at about HK$ 450,000 is still HK$ 200,000 more expensive than a traditional taxi. Drivers also face difficulties charging their vehicles due to the authorities' strict regulation over building the necessary facilities. The high costs of parking may also deter some from buying a car at all.

One cab driver in the city said that a BYD model usually requires two hours to recharge, and the parking fee during this time is up to HK$ 40. These payments nearly offset savings from filling up with fuel.

Hong Kong's government said the city has 1,200 charging spots, including 90 that BYD models can use. The company says on its website it has 13 exclusive charging stations with 52 parking spots. Shenzhen, in contrast, had 135 charging stations with more than 21,000 spots as of January, Cai said.

Hong Kong cab drivers also have concerns about BYD's batteries. The carmaker says its vehicles can run up to 300 kilometers on a full charge, but one Hong Kong taxi driver said that after two years the battery only lasted 150 kilometers.

Ultimately, though, government support is the key to expansion for BYD, said Li Wen, manager of the company's Asia-Pacific sales department.

A person close to Hong Kong's taxi industry said that city officials are unlikely to offer any subsidies, preferring instead to let competition rule the market.

"The government will only arrange policies to introduce new products into the market for experiments," the source said. "Although electric cars are more environmentally friendly, electric taxis will require lots of subsidies (to develop), and the government is not willing to foot the bill."

Wang, BYD's chairman, said this likely means his company will keep its focus on the mainland. "We will put our main attention back on the mainland because there are subsidies for both the vehicle and charging facilities. If there are no new policies issued in Hong Kong, we will gradually withdraw."

Looking Abroad

BYD has had difficulty entering markets other than Hong Kong's as well for most of the same reasons. BYD said that only 200 of its electric cars are serving as taxis in other countries, including 50 in Britain, and it has released little information about the use of its electric cars overseas.

This has spurred it to fine-tune its overseas strategy. Wang said that in Europe and the United States BYD is focusing on promoting electric buses, instead of sedans.

BYD says it has sold electric buses to the public transport systems of 160 cities around the world, including in London, Amsterdam and Tokyo. And Wang said his company has set a goal of doubling its sales of buses overseas in the next three years. Hong Kong has also gotten into the act. The operator of its public transport network has bought five electric buses from BYD and they started running late last year.

Analysts said they expect BYD to have an easier time selling its buses in Hong Kong, in part because it may have an easier time handling charging issues. And one analyst said that over time an increase in bus use may actually create room for more car sales, even without official support.

(Rewritten by Han Wei)