2,939 new Teslas were registered in Hong Kong in March—none in April

2,939 new Teslas were registered in Hong Kong in March—none in April
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2,939 new Teslas were registered in Hong Kong in March—none in April

Enlarge / Elon Musk (C), the co-founder of luxury all-electric US car maker Tesla, speaks at the StartmeupHK Venture Forum in Hong Kong on January 26, 2016.

PHILIPPE LOPEZ/AFP/Getty Images

According to The Wall Street Journal, Hong Kong’s transportation department registered 2,939 new Teslas in March and zero in April after a new-car tax exemption for electric vehicles (EVs) was ended on April 1.

Hong Kong levies a new-car tax at the time of sale that can be quite hefty, in some cases as much as the car itself. The EV exception previously made Hong Kong one of Tesla’s most popular markets, but the autonomous territory decided to start imposing the tax on EVs again earlier this year as a way to combat traffic congestion. The WSJ says the decision is effective for one year, through March 2018, but the government has said it will review the policy before then.

Instead of waiving the new-car tax for EVs, Hong Kong is now offering a maximum deduction of HK$97,500 (a bit less than US$12,500) on the new-car tax.

Although registrations don’t reflect sales of a car exactly, they’re a reasonable number to use, especially given that Tesla doesn’t release data on sales by country.

The number of Tesla registrations show that the market responded strongly in favor of Tesla in the months before the tax exemption reduction in April. In January 2017 and December 2016, new Tesla registrations were at just 168 in each month. In February that grew to 590 new registrations, and in March it exploded to 2,939.

The news reflects just how much EVs still depend on government incentives to build momentum. A report from the International Energy Agency earlier this year noted that in 2016, Denmark reinstated registration taxes for new EVs and consequently saw adoption drop by 68 percent that year. But government support is not likely to be necessary forever. Bloomberg New Energy Finance recently reported that EV battery packs are likely to become cheap enough to compete with internal combustion engines as soon as 2025. The analysis firm added that it predicts EVs will outsell traditional vehicles within 20 years.

Tesla specifically is in an odd place at the moment. The company is about to launch its more-affordable Model 3 (the first cars have just come off the production line), but it’s also still trying to push out the older luxury models. Last year, Tesla set an ambitious production goal for itself—47,000 to 50,000 Model S and X deliveries in the first half of 2017. Last week, the company said it delivered 22,000 cars in the second quarter. That total falls behind the 25,418 cars it delivered in the first quarter of 2017 due to production shortfalls of large battery packs, the electric automaker said.

2,939 new Teslas were registered in Hong Kong in March—none in April

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