After nine years of concessions aimed at steering Hongkongers toward electric vehicles (EV), the city’s First Registration Tax (FRT) concessions for electric private cars (e-PCs), including the flagship “One-for-One Replacement” scheme, expired on April 1.
Financial Secretary Paul Chan Mo-po insisted the policy has achieved its objectives, pointing to a surge in electric car ownership. As of the end of 2025, 70 per cent of newly registered private cars were electric, and the city’s total number of EVs had soared to 149,000 – roughly 16 per cent of all vehicles in Hong Kong.
“The policy has already shown its effectiveness,” Chan said when announcing the policy’s conclusion in February’s budget address. He added that Hong Kong’s EV market has matured and that “electric vehicles already have a certain level of competitiveness.”
Yet, as applications submitted after April 1 are no longer eligible for the concession, questions loom over whether the city’s electric vehicle revolution can sustain its momentum without government financial assistance.
Surge Before the Cut-off
In the final months before the deadline, showrooms saw a last-minute rush. According to the Transport Department, 5,448 electric private cars were registered under the “One-for-One Replacement” scheme in March, an 82.9 percent jump from February’s 2,978 units – the highest monthly total since 2021. The late spike came as both the scheme and the HK$58,500 FRT concession expired on March 31.
Total FRT concessions reached HK$899 million in March, up 85.7 percent from HK$484 million in February. By the end of March, electric private cars accounted for 25.4 percent of all registered private cars in the city.
The “One-for-One Replacement” scheme, first introduced in 2018, also allowed drivers to claim a higher FRT concession of up to HK$172,500 by scrapping and deregistering an eligible older private vehicle in exchange for a new electric car – a move instrumental in driving early adoption. Popular brands such as BYD, Tesla, and BMW reportedly faced delivery backlogs as motorists raced to finalize their orders before the cut-off date.
“It’s like the last call before the lights go out,” said Mr. Lam, a local citizen who recently replaced his six-year-old petrol car under the scheme. “Without the tax breaks, I wouldn’t have been able to afford the switch to electric.”
Policy Success, But at What Cost?
Analysts agree that the scheme jump-started Hong Kong’s shift toward cleaner transport but warn that its removal could test the market’s resilience.
“The government is trying to emulate what mainland China is doing – scaling back subsidies once the market has reached critical mass,” said Dylan Kwong, an automotive media specialist. “In theory, that’s fine. But there’s a risk Hong Kong’s ecosystem isn’t quite ready. To some, charging infrastructure, affordability, and second-hand battery life all remain weak spots.”
Hong Kong’s move echoes a broader regional trend. China – the world’s largest EV market – began scaling back its own concessions this year, slashing the purchase tax waiver from a maximum 30,000 yuan to 15,000 yuan per vehicle. Its policymakers declared the sector mature and strong enough to stand on its own, even as it remains central to national decarbonisation goals, and this approach is being mirrored across Asia’s developed EV markets.
And yet, Hong Kong’s situation is unique. Unlike mainland cities, it relies heavily on public charging stations, and most residents live in apartments without private parking. Despite government ambitions to install 200,000 chargers across the city by mid-2027, only around 16,435 were operational as of December 2025 with a mere 72 of them being fast chargers, according to the Environmental Protection Department.
Taxi drivers, who make up a significant share of urban mileage, share those concerns. Mr Yip, a 58-year-old driver who switched to an electric taxi last year, said charging logistics remain “a daily headache.”
“Some nights I spend 45 minutes waiting in line for a charger,” he said. “If the government wants more of us to go green, they need more stations, not fewer incentives.”
Market Maturity or Market Risk?
Industry observers say the timing of the subsidy’s end could create headwinds for foreign carmakers, with Chinese car brands expected to benefit from the end of concessions.
“There will likely be a cooling-off period for foreign companies,” Kwong said. “The removal of incentives for BMWs, Volvo, for example, will price them out of the market, making Chinese brands such as BYD and GAC Aion more attractive options.” He added that such European car brands may be forced to move out of Hong Kong, with the end of concessions being a win for China as it will likely increase the market share of Chinese EV brands.
Automakers also share the concern of a drop in consumer demand. Mr Lam, an EV industry insider who requested anonymity, said they had seen a sharp spike in orders in March but expect a slowdown through the summer. “Once the price advantage narrows, local buyers may delay purchases,” he said. “We’ve seen this cycle before – early enthusiasm, followed by a plateau when incentives are removed.”
Still, Kwong says Hong Kong’s market fundamentals remain strong. “Younger buyers view EVs not just as eco-friendly, but as aspirational tech products,” he said. “That mindset shift is significant.”
Kwong also touched on fuel prices, which could still play in the government’s favour. With Brent crude hovering above US$100 a barrel – a knock‑on effect of prolonged Middle East tensions between Iran and the U.S – petrol costs remain steep. If this pain at the ‘pump’ continues, Kwong believes interest in EVs will remain high even as tax incentives vanish.