Hong Kong recently went from an electric vehicle (EV) “role model” city to an almost complete stop of electric vehicle sales. What happened?
A “beacon city for electric vehicles” is the wording Tesla’s CEO, Elon Musk, once used to describe Hong Kong. Tesla held an over 80 percent market share in Hong Kong’s EV market.
In June 2017, the EV market in Hong Kong consisted of almost zero new registrations. It wasn’t long ago that the apparently autonomous territory, which features a popular architectural landmark like I.M Pei’s Bank of China Tower, had close to 3,000 EV registrations, amounting to an increase of 30 percent of the city’s entire EV fleet.
Some reasons for the pullback
It was previously reported by electric that “Hong Kong started an aggressive phase-out of its tax exemption for electric vehicles.”
The Hong Kong government imposes a high first registration tax on new cars. The purpose is to control new vehicle deployment. So far, the tax had been waived for electric vehicles.
To put it into perspective, the tax on the least expensive version of the Tesla Model S would add up to HK$435,000 (about US$56,000) to the cost of the vehicle. The government initially intended on waiving the complete US$56,000 tax, but after its recent change of heart, it will now only waive up to HK$9,500 (about US$12,500), making the purchase of EVs in Hong Kong much more expensive than previously anticipated.
Some speculate that another reason for the sudden change of wind might be China’s ambitions to be a global leader in EV technology itself. Tesla was pretty much the only big player in Hong Kong when it came to electric cars.
The future of electric cars
According to reports based on an analysis of the future price development of electric car ownership, by 2022, the total cost of owning an electric car will fall below the cost of owning an internal combustion engine car.
Electric cars will be cheaper to own than conventional cars by 2022.
According to Bloomberg New Energy Finance (BNEF) analysts, the plummeting cost of batteries is key in leading to the tipping point, which would kickstart a mass market for electric vehicles.
The larger the scale of electric cars rolling out onto the market, the greater the cut in carbon emissions which drive climate change and account for much of the urban air pollution will be.
Unfortunately at the moment, despite the subsidies in many countries, EVs still remain more expensive than conventional cars and the limited range of battery-only cars is still a concern for many, preventing some to jump on board the EV-train to the future. At present, only 1 percent of new cars sold are electric.
The good news is that according to the analysis published by BNEF recently, predictions estimate that the total cost of ownership — this includes purchase price and running costs — of battery-only cars will fall under the level of combustion engines in 2022, even if the conventional cars continue improving their fuel efficiency by 3.5 percent a year.
According to an info graph by cleantechnica posted on Twitter, U.S. electric car sales were up by 48 percent in July 2017.
— Jarkko Vesa (@JarkkoVesa) August 7, 2016
The following statistics from the beginning of 2017 show the top 10 U.S. regions of EV growth.
— Rachel Brink (@RachelBrink2) February 25, 2014
Okay, that’s for America, but what will EV sales look like for the whole globe in the near future?
According to the BNEF report, 35 percent of global new car sales — an estimated 41 million cars a year — will be EVs in 2040. The report projects that one out of four cars globally will be an EV by then. If this works out, then it would cut oil consumption by 14 percent. This could even have a bigger impact if EV cars become widespread in fleets and ride-sharing schemes by 2040 — pushing up the projected car sales globally by 50 percent.
EV enthusiasts and climate-conscious people remain optimistic as to what the future of electric cars will look like.