And the hits just keep on coming for Elon Musk.
After a tax incentive for electric cars was slashed in Hong Kong, new registrations of Teslas vehicles dropped from 2,939 to zero…
Hong Kong, though relatively small, is a significant outpost of luxury car buyers and trend setters. Its government had long waived its vehicle registration tax for newly purchased electric automobiles, adding to the attractiveness of Tesla’s cars.
Citing increased congestion of privately owned vehicles on its streets, the government said in February that it would be changing the policy so the tax would be waived only on the first 97,500 Hong Kong dollars (about US$12,500) of an electric car’s purchase price for individuals.
After the change came into effect on April 1, the cost of a basic Tesla Model S in Hong Kong effectively rose to around US$130,000 from less than US$75,000.
And the reaction – demand tumbled…
The Wall Street Journal reports that Tesla sales in Hong Kong plummeted after authorities slashed a tax break for electric vehicles on April 1, demonstrating how sensitive the company’s performance can be to government incentive programs. Official data from Hong Kong’s Transportation Department, analyzed by The Wall Street Journal, show that no newly purchased Tesla Model S sedans or Model X sport-utility vehicles were registered in April in the Chinese territory, and only five privately owned electric vehicles were registered in May.
The collapse followed a surge just before the tax change, which had been announced in February, with new registrations of almost 3,700 Tesla vehicles in the first quarter – including 2,939 in March alone – compared with 1,506 vehicles in the entire second half of 2016.
The end of the tax exemption “has really put the brakes on electric-vehicle adoption in Hong Kong,” said Mark Webb-Johnson, a founder of Charged Hong Kong, a group that promotes electric vehicles.
In a statement, Tesla said…
“Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles, however, our business does not rely on it."
The company said its sales revenue in China, where it faces large tariffs, has risen without government incentives.
“At the end of the day, when people love something, they buy it,” it said.
Except it appears they're not!
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We have one last question – does anyone feel like this recent string of terrible headlines (and reality checks) for Musk and Tesla smells a lot like the recent collapse in Uber? Is the smoke starting to clear? Are the mirrors starting to break?