Report: Tesla's Hong Kong Sales Plummet After Incentive Change

The incentive previously allowed local buyers to pay less than $75,000 for a four-door Model S sedan with a sticker price of about $130,000.

Sales of Tesla electric vehicles effectively ended in Hong Kong after the government largely scrapped an incentive program that previously cut their price tag nearly in half.

The Wall Street Journal reports that the incentive allowed local buyers to pay less than $75,000 for a four-door Model S sedan with a sticker price of about $130,000.

But as of April 1, the government, in an effort to curb traffic congestion from privately owned cars, limited the incentive to only a fraction of the purchase price of electric vehicles.

In the month leading up to the tax change, Hong Kong's transportation department registered nearly 3,000 new Tesla vehicles β€” an unusually high number β€” as drivers sought to capitalize on the final weeks of the incentive.

Predictably, the department registered no new Teslas in the month after the change, the Journal reported.

Tax incentives aided Tesla sales in numerous countries β€” including the U.S. β€” but the company disputed that it is reliant on them to compete with conventional automakers.

CEO Elon Musk late last year argued that the structure of U.S. incentives actually benefits industry giants rather than Tesla.

"If people are concerned about Tesla incentives, they should be concerned with, 'Well, how does Tesla overcome the disadvantage of EV incentives,'" Musk said in November.

But the initial pattern in Hong Kong, the Journal noted, mirrored a sharp sales decrease in Denmark when that nation altered its incentive program last year.

Tesla's latest quarterly sales were up but fell short of analysts' expectations, which some attributed to lagging demand for its luxury electric vehicles ahead of the launch of the cheaper Model 3.

Hong Kong officials, meanwhile, reportedly plan to reconsider the incentive change before it expires next year.

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