Hong Kong’s first registration tax concession for electric private vehicles expires on Tuesday, ending three decades of incentives that helped turn the city into one of the world’s most electrified car markets.
The policy that has been in place in various forms since March 1994 and comprised until this Tuesday two elements.
CLP Power registered Hong Kong’s first electric vehicle — a British-made Lucas Electric Metro — with the territory’s Road Traffic Department in 1993, one year before the government introduced its first registration tax waiver for EVs.
The “One-for-One Replacement” Scheme, introduced in February 2018, offers up to HK$172,500 ($22,000) in tax relief for buyers who scrap a fuel-powered car and purchase an EV.
A separate general FRT waiver of up to HK$58,500 applies to all electric private car purchases.
Both were most recently extended in February 2024 to run through this Tuesday —March 31, 2026.
Neither will be renewed for private cars, the Hong Kong government announced on February 25 in its 2026-27 Budget.
Full FRT waivers for electric commercial vehicles, motorcycles, and motor tricycles will continue until March 2028.
The announcement triggered an immediate surge in showroom traffic over the last five weeks, with multiple EV brands reporting that customers rushed to place orders before the deadline.
Chinese automakers now dominate new vehicle registrations, Tesla has lost its crown, and Japanese brands that defined Hong Kong’s car culture for decades are being steadily displaced.
BYD Leads
BYD overtook Tesla as Hong Kong’s top-selling EV brand in 2025, registering 9,751 new vehicles for the full year — making it the overall sales champion across all brands in the city for the first time, according to Hong Kong Transport Department data.
The BYD Sealion 07 EV was the single best-selling model in Hong Kong in 2025 with 5,680 units, the data showed.
In the first half of 2025, BYD had already pulled ahead with 4,902 EV registrations (27% market share) versus Tesla’s 3,889 (21.1%), the Transport Department figures showed.
By September, BYD registered 936 units to Tesla‘s 853, with the gap widening after the launch of the Atto 2 compact SUV at a post-subsidy price of approximately HK$155,000.
70% Penetration
The shift is part of a broader transformation that has made Hong Kong one of the most electrified vehicle markets on Earth.
The penetration rate of new-energy vehicles rose from 1% in 2018 to approximately 70% in 2024, second only to Norway globally, according to data from Autohome.
By September 2025, EVs accounted for 76% of all new private car registrations in a single month — up 95% year-on-year, according to Caixin Global.
The city’s total EV fleet stood at approximately 131,700 vehicles with a penetration rate of 14.6%, according to Hong Kong Environmental Protection Department data.
Chinese Brands Flood the Market
Beyond BYD, a wave of Chinese automakers has established a presence in Hong Kong over the past two years, collectively reshaping a market long dominated by Japanese and European incumbents.
Geely‘s premium EV brand Zeekr entered in mid-2024 with the right-hand-drive 009 MPV and expanded rapidly in 2025 with the 7X SUV.
Zeekr also partnered in mid last year with Easy Charge, Hong Kong’s largest public charging network, integrating more than 2,300 charging points across 170 locations.
XPeng launched in Hong Kong in May 2024 with the G6 SUV and X9 MPV, accumulating over 500 orders for the G6 within months.
The company opened a flagship showroom, deployed its first supercharging network outside mainland China, and became the first automaker approved for remote valet parking in Hong Kong, according to China Daily.
GAC Aion, SAIC’s MG and Maxus brands, and Leapmotor — which opened its first Hong Kong store in June 2025, marking its 1,500th location globally — have all entered the market.
In the luxury segment, BYD Co.’s brand Denza has also debuted in the market.
Toyota Fades
For decades, Japanese automakers held an unrivalled position in Hong Kong.
The dominance of Toyota‘s MPVS is now eroding.
Chinese MPVs — including the SAIC Maxus Mifa 7, Denza D9, Zeekr 009, and XPeng X9 — are competing directly in the segment the Alphard once owned, offering comparable or larger cabins with electric drivetrains at competitive prices, according to the media outlet 36kr.
Hong Kong’s government has pledged to halt new registrations of gasoline and hybrid private cars by 2035.
Plans to deploy 220 rapid chargers at 180 petrol stations by 2026 and Chief Executive John Lee’s commitment of HK$300 million toward 3,000 private fast chargers by 2028 indicate continued public investment in the ecosystem, China Daily recently reported.
