EV makers swarm to Hong Kong, lured by strong government support, rapid adoption rate

EV makers swarm to Hong Kong, lured by strong government support, rapid adoption rate

EV makers swarm to Hong Kong, lured by strong government support, rapid adoption rate

Hong Kong’s EV population stood at 70,701 units at the end of October, representing about 7.7 per cent of the total number of vehicles, according to the Environmental Protection Department (EPD).

Hysan Dev partners with Tesla to transform Lee Gardens into the Largest EV Charging Hub on Hong Kong Island. Photo: Elson LI
Given EV’s accelerated penetration and the government’s supportive policies, it is expected that all new cars in Hong Kong could be electric by as early as 2030, five years ahead of the government’s target. This is significant, given that vehicles account for nearly a fifth of Hong Kong’s greenhouse gas emissions.

So far, 264 EV models from 16 jurisdictions have received approval to ply on Hong Kong’s roads, including 202 models for private cars and motorcycles, and others for public transport and commercial vehicles. These include vehicles from international carmakers like Audi, Nissan, Tesla, BMW and Mercedes-Benz, as well as those from Chinese EV manufacturers such as BYD, SAIC Maxus, and Great Wall Motor’s Ora.

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And buyers are swarming to car showrooms, driven in part by the government’s incentives. Over 60 per cent of the 32,004 newly registered private cars in Hong Kong in the first nine months of 2023 were electric, with Tesla topping the charts with a 35 per cent share of the new EVs registered during the period, according to data from the Transport Department.

“Many buyers of EVs are driven by government policies,” said Calvin Ho, director of sales operations at Inchcape Greater China. “In addition to the government subsidies, the cost of ownership of an EV is also much lower than that of an internal combustion vehicle.”

There is especially strong demand for seven-seat electric MPVs (multipurpose vehicles) in the Hong Kong market, favoured by value-conscious buyers who would consider purchasing an EV for family trips, according to Lo. For example, Maxus MIFA 9, an electric seven-seater launched in April this month, has seen a surge of sales to more than 1,000 units as of this month, according to Inchcape, the designated distributor of SAIC Maxus in Hong Kong.

Currently, buyers of electric private cars in Hong Kong can get a waiver of up to HK$97,500 when they register an EV for the first time. Car owners who choose to scrap and deregister their petrol-powered cars and replace them with an electric vehicles, are entitled to a higher tax break of up to HK$287,500 under a so-called “one-for-one replacement” scheme. Both incentives will run until March 31, 2024.

The government has not given any indication whether the schemes will be continued. Automotive experts have called for the incentives to be extended after March 2024, as they have been successful in encouraging drivers to switch to EVs.

“The scheme has served as a driving force for the city’s wider adoption of EVs,” said Joseph Lau, the chairman of the Motor Traders Association of Hong Kong. “If the government scraps it or drastically reduces the tax waiver, it will dampen buyers’ desire for switching to EVs.”

The government is also supporting the roll-out of charging infrastructure. It introduced a HK$2 billion incentive scheme in 2020, which was subsequently enhanced by HK$1.5 billion, to subsidise the installation of charging infrastructure at 140,000 parking spaces in about 700 car parks at existing private residential buildings.

To promote the use of private EVs, the Hong Kong government aims to increase the number of public and private parking spaces with EV charging infrastructure to about 200,000 by mid-2027, the city’s chief executive John Lee Ka-chiu said in his October policy address.

As of the end of this September, there were 7,085 public EV chargers covering the 18 districts of Hong Kong, including 3,950 medium chargers and 1,092 quick chargers, according to the Transport Department.

EV owners can also use the “EV-Charging Easy” mobile app launched by EPD to locate the nearest public charging stations.

It will also progressively commercialise the EV charging services which are currently provided free of cost in government car parks, and allow operators to levy a fee on the users to increase market participation in this segment, according to the 2023 policy address.

Key stakeholders are also introducing their own EV charging solutions. For example, petroleum giant Shell opened Hong Kong’s first petrol station equipped with both EV charging and conventional fuel facilities last year. Inchcape Greater China also introduced a one-stop solution this month, to help its EV customers with home charging and public charging services.

Developing such infrastructure is critical to address the issue of range anxiety, which refers to the fear of running out of power on a journey before getting to the destination or before finding a charging point. It is also key to resolving charge anxiety, the feeling of uncertainty about whether a driver will be able to charge at a charging station.

It is also crucial for Hong Kong to provide more detailed solutions for recycling retired EV batteries, as the city will have to handle some 6,000 tonnes of retired EV batteries by 2026.

“How to deal with the retired EV batteries – should it be the car owners who are responsible, or is it the car dealers’ responsibility to recycle? This is also a key question the consumers have in mind before they decide to purchase an EV,” said Ted Lau, managing director of Inchcape Greater China.

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