As you may remember, Denmark announced the phasing out of its tax break for electric vehicles by the end of 2015, which caused Tesla’s sales to surge to an all-time high in the country, but they have been virtually non-existent since then. We are talking about going from over 1,000 vehicles delivered in December 2015 to about 100 vehicles delivered throughout the entire year so far.

Now Tesla fears a similar situation in Hong Kong, a very important market for the company, and Tesla President Jon McNeill is currently in the global city to lead talks with the government in order to extend the tax break for EVs and maintain Hong Kong status as a “beacon city” for electric vehicles.

All-electric cars imported in the city benefit from a 100% waiver on first-registration taxes, which can be pretty steep in Hong Kong resulting in an edge for electric vehicles.

We are talking about a “beacon city for electric vehicles”, but that might aswell be a “beacon city for Tesla vehicles” since the company has an 80% market share of Hong Kong’s 5,800 EVs as of this July.

The tax break is due to end in March 2017, but McNeill is hoping for the government to renew it (via South China Morning Post)

“We’re really in discussion with the government. We hope that Hong Kong does not turn into an example like Denmark where all e-vehicle sales basically dried up to zero. Instead we want to work with the Hong Kong government to make sure that they extend the policy, to continue the city’s path to be a beacon for e-vehicles.”

Tesla is also lobbying the government to help accelerate the deployment of electric vehicle charging infrastructure. McNeill said:

“We are in a dialogue with the utilities and the government to make it easier for users to charge their vehicles,”

McNeill’s visit in Hong Kong comes just as Tesla unveiled its new energy storage and solar products. The executive said that the company should bring the products to Hong Kong next year:

“We’ll be expanding worldwide the production throughout 2017. We will work closely with the utilities and regulators here to make the products available for consumers as fast as we can.”

Finally, he also commented on the Model 3 and said the vehicle would arrive in Hong Kong in late 2017, which would be surprising considering it’s a right-hand drive market and Tesla’s right-hand drive vehicles have historically followed left-hand drive production by about a year.

But it could be different for the Model 3. Tesla plans to start production in mid-2017.

As for the EV incentives in Hong Kong, we will be following any development and report back.

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