Date
23 March 2017
Removing the full first registration tax exemption for private electric vehicles is a mistake that will undoubtedly result in a higher percentage of polluting petrol vehicles on our roads. Photo: Tesla
Removing the full first registration tax exemption for private electric vehicles is a mistake that will undoubtedly result in a higher percentage of polluting petrol vehicles on our roads. Photo: Tesla

Tax change on private electric vehicles misguided

Critics of incentives for electric vehicles (EVs) often scornfully say that the government shouldn’t be giving handouts to “rich men” and their “toys” since the only EVs that had been seeing any significant sales were pricey Teslas.

That view ignores the benefit to the public of a reduction in roadside pollution and in aiding the advancement of technology – EV battery chemistry, electric drivetrains and complimentary technology like solar – that will bring us sustainable transport without the harmful impact to our air quality, our health and climate change.

Sure, there may be a few Tesla owners who also own other luxury vehicles but if they take the zero-emission Tesla over the polluting Ferrari or Lamborghini, the public still wins.

Even the very wealthy can only drive one car at a time so to think that a move that discourages buying an EV as an additional car will help to reduce traffic congestion is wrong. It will only increase roadside pollution and we all lose.

But more importantly, that sentiment falsely asserts that all Tesla owners are “rich”. In fact, many are middle-income earners with kids who have stretched their budgets to get a Tesla because they want cleaner air and a better environment for the next generation.

These families would not have been able to afford a Telsa without the EV tax exemption. Moreover, many Tesla owners struggle to deal with the challenges of poor charging infrastructure and inability to install charging facilities at home – yet they persist.

Removing the full first registration tax (FRT) exemption for private EVs is a mistake that will undoubtedly result in a higher percentage of polluting petrol vehicles on our roads.

Hard to see how it will reduce traffic congestion since the FRT on polluting petrol vehicles – which made up nearly 93 percent of newly registered vehicles last year – was not increased.

Furthermore, the government has stated that they received about HK$2 billion less in taxes because of the tax waiver between 2015 and 2016. That claim is disingenuous because without the tax waiver the cost of each EV would be way higher and thus the number of EVs sold would be way lower.

In one fell swoop the government has in effect withdrawn support for clean air and “innovation and technology” that benefits society.

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RT/RA

EJI contributor

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