Open letter to Mrs Carrie Lam - Support for electric vehicles in Hong Kong

Dear Mrs Lam,

I am sure that you are aware of the situation with the poor air quality in Hong Kong, and in particular our roadside air quality. This is affecting the quality of life of everyone in Hong Kong. It is impacting our health, and the competitiveness of HK in the region. According to HKU School of Public Health, in 2016 our poor air quality resulted in 1,600 premature deaths, 2.6 million doctors visits, and $21.6billion direct economic loss. 2017 looked similarly bad. It is clear that the worst of the pollution is at the roadside and in the lowest floors of our buildings; and this affects the lowest privileged members of our community the most.

Governments, and Environmental Protection Agencies, around the world all conclude that electrification of transport is the correct approach to address this problem, as well as help meet CO2 emission targets.

Here in HK, we were finally making good progress. Since 2014, we have grown our fleet of Electric Vehicles (EVs) from a handful to more than 10,000; without affecting the growth rate of the private car fleet. However, in April last year’s budget the previous administration significantly capped the tax incentives for EVs; increasing the price of most by 50%, and making HK amongst the most expensive places in the world to buy an EV.

The impact of this can clearly be seen in the figures. Comparing 2017 to 2016, EV sales are down 95%, while overall private car growth is up 4%. The previous administration stated that the policy change was to reduce the growth of the private car fleet, which is obviously false. Buyers have simply switched back to buying polluting petrol and diesel vehicles.

To obtain an indication of the level of popular support for EVs, Charged Hong Kong (a local environmental charity) commissioned the HKU Public Opinion Program to conduct a telephone survey of members of the public. The results were announced at a press conference in the Legco Building by Karie Pang (Associate Director, HKU POP), along with representatives Tanya Chan, Gary Chan, and Ted Hui. Dr Kevin Tsui, and the grandfather of EVs in HK Prof C C Chan, were also in attendance. A summary of the results is:

1. General support for EVs: 81%
2. Affect of cap on FRT exemption for EVs: 62% believe this will discourage ownership
3. Support for an increase in FRT waiver: 74%
4. Support for a tax exempted switcher program (petrol/diesel to electric): 83%
5. Dissatisfaction with government support for EVs: 74%
6. Insufficient charging facilities: 86%

HK is the perfect place for EVs, but the biggest issue facing owners is the lack of charging facilities. For new buildings, we have GFA concessions for enabling EV charging. But for existing buildings, little has been done. Without legislative support, or incentives, buildings owners and management simply refuse to permit the installation of charging facilities. Without the growth in the number of EVs, charging network providers have no viable business model; the economies of scale are simply not there.

In recent years, we’ve seen more and more EV models come to the market. The manufacturers are finally making a good selection of cars available. Investments in charging networks continue, globally. As the vehicles come to the end of their useful life, the issue of what to do with the batteries is being addressed; we are seeing investment in battery re-manufacturing and re-cycling facilities for this both in Hong Kong and elsewhere around the world. We would rather Hong Kong led with this, to improve our air and quality of life.

We have some specific recommendations for your government:

1. Raise the FRT exemption cap for EVs. At the moment, it is clearly insufficient to make EVs attractive. This can be done in a revenue neutral manner, according to the ‘polluter pays’ policy.

2. Introduce a fully tax exempted “switch programme” to incentivise and encourage the change from petrol and diesel to electric vehicles.

3. Address the core problem of inadequate charging facilities in existing buildings - either by legislative support or incentives.

The last time the topic of FRT waiver was brought to Legco was in 2014. The vote then was 80% in favour of renewing the 100% FRT exemption policy for EVs. Now we have this HKU POP survey also showing 80% popular support.

With such legislative and popular support for EVs, and such clear benefits, what more does government need? We urge your new administration to make a real long term commitment; follow the lead set by other countries around the world and set a clear date by which no new petrol/diesel vehicles will be registered; then implement policies to incentivise and support that target.

Mark Webb-Johnson
Chairman, Charged Hong Kong