The Rising Influence of Rising Affluence

[jbog]

Tesla Life Line looks like the Tax Breaks


Tesla’s Hong Kong Sales Gutted by Tax Change
After a tax incentive for electric cars was slashed, new registrations of Teslas vehicles dropped from 2,939 to zero

By Tim Higgins and Charles Rollet
July 9, 2017 7:00 a.m. ET

Tesla Inc.’s TSLA 1.42% sales in Hong Kong plummeted after authorities slashed a tax break for electric vehicles on April 1, demonstrating how sensitive the company’s performance can be to government incentive programs.

Official data from Hong Kong’s Transportation Department, analyzed by The Wall Street Journal, show that no newly purchased Tesla Model S sedans or Model X sport-utility vehicles were registered in April in the Chinese territory, and only five privately owned electric vehicles were registered in May.

The collapse followed a surge just before the tax change, which had been announced in February, with new registrations of almost 3,700 Tesla vehicles in the first quarter—including 2,939 in March alone—compared with 1,506 vehicles in the entire second half of 2016.

The swing was significant for Tesla, which reported that its vehicle deliveries globally topped 25,000 in the first three months of the year, the auto maker’s best sales quarter ever, but fell to just over 22,000 in the second quarter.

The more recent total put Tesla within its first-half target range but below analysts’ expectations for the quarter, and fueled concerns among analysts and investors that demand for Tesla’s current two models is weakening ahead of the launch of the Model 3, a $35,000 sedan that begins production this month.

The concerns helped push Tesla’s share price down over the past week, after a surge earlier this year that pushed its value above that of Ford Motor Co. and General Motors Co.

“Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles, however, our business does not rely on it,” Tesla said in a statement. The company said its sales revenue in China, where it faces large tariffs, has risen without government incentives. “At the end of the day, when people love something, they buy it,” it said.

Buyers of Teslas and other electric vehicles in many markets benefit from government incentives. Tesla notes on its website that U.S. purchasers are eligible for a $7,500 federal income tax credit, plus additional incentives in some states.

The company also sells state zero-emissions vehicle credits to auto makers that don’t reach government fuel-efficiency standards.

It Seems to me that the U.S. $7500 Tax Break on a $35k car needs adjustment.

https://www.wsj.com/articles/teslas-hong-kong-sales-gutted-by-tax-change-1499598003