2017-2018 Budget - Electric Vehicles in Hong Kong

FOR RELEASE 23 February 2017

HONG KONG - The Hong Kong Government announced, in it’s 2017-2018 budget, changes to the First Registration Tax for Electric Vehicles:


The most important part of this change is:

For the period from April 1, 2017 to March 31, 2018 inclusive:
i) the FRT electric private cars will be waived up to $97,500; and
ii) the FRT of electric commercial vehicles (including goods vehicles, buses, light buses, taxis, and special purpose vehicles), electric motor cycles and electric motor tricycles will be waived in full.

For more than 20 years, our government has been promoting and supporting the adoption and use of Electric Vehicles (EVs) in Hong Kong, primarily with a 100% waiver of First Registration Tax. This abandonment of that policy is troubling and will undoubtedly slow down the transition to sustainable transportation, and set back the excellent progress we have seen in recent years.

The pollution from each new petrol/diesel vehicle put on the road today will be felt for the 20 years of that vehicle’s life. Future generations will have to live with the decisions that we take today, and this decision is simply bad for Hong Kong’s air quality and roadside pollution levels.

Over the past two years, as affordable EVs entered the Hong Kong market, we’ve seen incredible growth. With respect to private cars, last year 15% of owners decided to purchase an electric vehicle, over a petrol equivalent. That decision has been largely supported by the 100% FRT waiver for Electric Vehicles. The Environment Bureau (ENB) points out the increasing acceptance of electric private cars by drivers, but ignores that this acceptance is a direct result of the FRT waiver.

With regard to commercial vehicles, in previous years the government has renewed the waiver for 3 or 5 year periods, but this time they have changed to just a single year renewal of the incentive. This sends a message to the industry and to vehicle owner/operators that the government is not truly and fully supporting these incentives. In the commercial vehicle fleet, decisions are taken with a payback period of at least 5 years - a single year’s renewal instills no confidence.

Electric vehicles today make up less than 1% of the private car fleet, and the numbers for commercial vehicles are significantly lower than that. In this infancy of Electric Vehicles in Hong Kong, it is far too soon to withdraw the support.

Whilst we understand the desire to limit the growth of the private vehicle fleet, we respectfully point out that it would be more effective to limit the growth of the 99% that are petrol/diesel, without stunting the growth of the less than 1% that are Electric Vehicles. It is abundantly clear that the net result of this policy change will be that the commercial sector will continue to ignore electric vehicles and the result will be more polluting petrol and diesel vehicles on our roads. In the private sector, we will see more petrol and a lower percentage of electric private vehicles.

In the 2014 Industry Study on Electric Vehicle Adoption in Hong Kong, the Hong Kong Productivity Council put forward 13 recommendations to support higher rates of EV adoption in Hong Kong. To date, none of those recommendations have been implemented by our government. According to the Hong Kong University school of Public Health, last year our air pollution resulted in 1,686 premature deaths, 113,000 hospital bed days, and 2.6m doctor visits - with a total economic loss of HK$21 billion. Nothing in this budget adequately addresses these issues.

Hong Kong desperately needs a holistic approach to manage the transition to Electric Vehicles and sustainable transportation. An approach that addresses not just the vehicles, but the charging networks and support infrastructure as well.

About Charged Hong Kong

Charged Hong Kong is a registered charity, dedicated to supporting and accelerating the adoption of plug-in electric vehicles in Hong Kong. We believe that plug-in electric vehicles are significantly more environmentally-friendly than conventional vehicles with internal combustion engines, bringing tremendous improvements to air quality in Hong Kong. Charged Hong Kong provides a platform for EV owners and enthusiasts in Hong Kong to discuss and exchange ideas regarding electric vehicles and the environment of Hong Kong, thus allowing us to represent the collective views of our membership to manufacturers, charging networks, the press, and the government.