Hong Kong EV Share Falls Below Petrol Cars After Replacement Tax Break Ends

September registrations reveal a sharp reversal

Hong Kong registered 1,316 new electric private cars in September 2026, fewer than the 1,382 petrol cars, including hybrids, entering the market that month. Electric cars accounted for 48.78% of the 2,698 new private car registrations, down from 87.59% in March, when buyers rushed to secure tax relief before it expired.

The steepest fall was in registrations completed through the former one-for-one replacement scheme. Just 104 electric private cars were registered through it in September, compared with 5,448 in March, a decline of about 98%. The scheme ended on March 31, although qualifying earlier purchases can still receive relief under a limited transitional arrangement.

Transport Department figures show two changes happening together: the rush to claim the concession has passed, and electric cars have lost their recent majority of new private car registrations. September's petrol lead was narrow, at 66 cars, but it followed several years in which electric vehicles held the larger share.

The government's decision rested on the view that electric cars had become competitive enough to sell without the concession. Industry representative Lee Yiu-pui argues that many motorists still face a practical obstacle: they cannot charge at home and must make special trips to public chargers. For those drivers, a lower purchase price and convenient daily use remain different considerations.

What ended, and what the tax break covered

The Transport Department's tax concession arrangements state that private electric vehicle concessions, including the one-for-one scheme, expired on March 31, 2026. Applications received from April 1 generally no longer qualify, except under the transitional arrangement for eligible earlier orders or shipment arrangements.

First registration tax is a tax payable before a vehicle is registered in Hong Kong for the first time. The replacement scheme gave eligible owners a larger reduction in that tax when they scrapped an old private car and registered a new electric one. It reduced the tax bill rather than paying the buyer cash.

Introduced in February 2018, the scheme previously offered relief capped at HK$250,000. The department's rules for the transitional arrangement specify a lower maximum of HK$172,500 for qualifying replacement purchases and HK$58,500 for other eligible electric private cars. Cars with a taxable value, meaning their price before tax, above HK$500,000 receive no concession under that arrangement.

The rush lasted beyond the closing date

The Transport Department received about 13,500 replacement scheme applications in March, more than three times the previous monthly average. It added staff and extended working hours, completing the processing of March applications by May. Successful cases were then passed to distributors or importers to finish registration.

About 16,000 electric private cars completed registration through the scheme between March and May. April recorded the largest monthly scheme total, at 6,427. The delay between submitting paperwork, receiving approval and registering a car explains why substantial numbers continued to appear after the scheme closed.

Across the entire electric private car market, registrations reached 9,150 in March and 8,078 in April. Those totals were respectively 271% and 285% higher than a year earlier. By comparison, the average monthly figure in 2025 was 3,129, with a December peak of 5,156.

The department said approved electric vehicle first registration tax concessions had reached approximately HK$899 million by the end of April. That figure shows the substantial value of the relief granted during the period surrounding the closure.

The main dates explain how the transition unfolded:

• February 25, 2026: The Budget announced that private electric vehicle tax concessions would end. This was also the cutoff for orders or shipment arrangements eligible for transitional relief.
• March 31, 2026: The concessions and replacement scheme expired.
• May 2026: The department had finished processing applications received in March.
• September 2026: Electric cars accounted for 48.78% of new private car registrations, while scheme registrations fell to 104.
• February 24, 2027: Applications under the transitional arrangement must be submitted.

A smaller electric market, not just more petrol cars

September's figures show that the reversal came mainly from falling electric registrations. Electric private car registrations dropped from 3,542 in September 2025 to 1,316 a year later, a decline of about 63%. Petrol registrations rose from 1,136 to 1,382, an increase of about 22%.

The total market also contracted. New private car registrations fell from 4,678 in September 2025 to 2,698 in September 2026, a decline of about 42%. Electric cars therefore lost share within a much smaller monthly market, rather than simply being overtaken during a broad surge in car buying.

September comparisons over several years show how far the balance had shifted before the latest reversal. Electric cars accounted for 27.97% of new private registrations in September 2021, 62.49% in September 2022, 64.48% in September 2023, 61.84% in September 2024 and 75.72% in September 2025.

The monthly pattern in 2026 was uneven. After falling to 54.11% in June, the electric share recovered to 60.53% in July and 60.56% in August before dropping below half in September. Between March and September, its share fell by 38.81 percentage points.

The petrol category includes conventional hybrids and plug-in hybrids. A conventional hybrid combines a fuel engine with an electric motor without needing an external charger. A plug-in hybrid can also charge from an electricity supply. September's figures do not give a separate count for each type.

Why the government withdrew support

Financial Secretary Paul Chan said market maturity was the main reason for ending the concession. At a briefing following his Budget address, he pointed to electric vehicles accounting for about 70% of newly registered cars and said the market had changed substantially since support began.

Chan said buyers now had more models to choose from, better features and comfort, and lower prices. Explaining why the government believed the concession could end, he said:

Initially, there weren't many electric vehicle models, and they were quite expensive. Now, as you can see, electric vehicles have many more models with many functions, and the comfort level has been greatly improved. The price has been decreasing year by year, so we think that electric vehicles already have a certain level of competitiveness,

The policy therefore moved more of the purchase cost back to buyers, on the government's assessment that manufacturers could compete without the previous tax reduction. September's results show the market after the initial rush had subsided, with electric registrations well below their March and April peaks.

Charging access shapes the choice at home

Lee Yiu-pui, honorary life president of the China Hong Kong Automobile Association, said limited access to charging at home helps explain why some owners continue to prefer petrol and hybrid cars. Many Hong Kong residents live in high buildings and cannot simply install a charger beside their own parking space.

Public charging can require a separate journey, a wait for an available charger and time spent charging. Lee said that even faster equipment can require motorists to change their routines. For drivers who cannot charge while parked at home, that inconvenience can outweigh an electric car's appeal when purchase prices are similar.

Lee said dealers had responded to the market by promoting conventional and plug-in hybrids. Conventional hybrids offer lower fuel consumption than traditional petrol cars while allowing owners to continue refuelling at petrol stations. Plug-in hybrids give drivers the option of using electricity when charging is convenient and fuel when it is not.

Lee also pointed to falling hybrid prices. His assessment connects the tax change with a practical buying decision: once a large financial incentive disappears, motorists who lack convenient charging have a stronger reason to choose a vehicle that fits their existing routine.

Lawmakers propose different ways to respond

Legislator Chan Hak-kan said the registration figures showed the importance of tax incentives to electric vehicle demand. He suggested considering renewed concessions when public finances permit, while also pointing to manufacturers lowering prices and Hong Kong's high petrol costs as reasons electric cars could remain competitive.

Chan proposed alternatives to direct purchase support, including parking concessions at metered spaces, tunnel fee reductions and priority lanes for electric vehicles on suitable roads. These were proposals, with no implementation dates given. Parking and tunnel discounts would reduce recurring ownership costs, while priority access would offer a different practical benefit.

Chan also warned that slower growth in electric vehicle ownership could weaken the commercial incentive to expand charging facilities. His concern links the two markets: drivers need chargers before switching, while charging operators need enough customers to support investment.

Legislator Ching Ho-fung described the petrol lead as a temporary adjustment following the policy change. He argued that improving driving range and charging speed would sustain the longer shift towards electric vehicles, and urged faster installation of high speed chargers.

The two responses address different parts of the same buying decision. Tax relief lowers the initial bill. Charging investment reduces the time and inconvenience involved in using the car. September's figures put both issues at the centre of the debate over how Hong Kong should encourage further adoption.

BYD led the final wave of scheme registrations

BYD recorded 2,984 registrations through the replacement scheme between April and September, ahead of Tesla's 2,840. BYD's lead was 144 cars. Zeekr followed with 1,252, Denza with 937 and XPeng with 718.

Four of those five brands were Chinese. Together, the five recorded 8,731 scheme registrations during the period. BYD and Tesla alone accounted for 5,824, showing how strongly those two brands featured in the final wave of purchases receiving the replacement concession.

The next five brands were Toyota with 603 registrations, Avatr with 525, Smart with 471, Wuling with 457 and GAC Aion with 359. These rankings cover registrations completed through the replacement scheme from April to September, a period that included the processing of purchases arranged before its closure.

Who can still apply before February 2027?

The Transport Department's scheme participation guide says transitional relief is available for qualifying electric private cars ordered, or arranged by their owners for shipment to Hong Kong for personal use, on or before February 25, 2026. Applications require supporting documents and departmental approval.

Applicants must submit the complete paperwork by February 24, 2027. Approved vehicles must complete first registration by that date or within five working days after approval, whichever is later. The department advises that ordinary first registration takes two working days when the documents are correct, while replacement scheme applications take about 10 working days after all required documents arrive.

The old car must have been first registered in Hong Kong for at least six years, and the applicant must have owned it continuously for at least 18 months immediately before deregistration. It must also meet the licensing requirement: at least 304 days in the preceding 12 months, or the alternative qualifying period of 608 days in the preceding 24 months.

The owner must scrap and deregister the old car before applying to register the replacement, with no more than three months between deregistration and the new application. The replacement must be purely electric and registered in the same owner's name. The old car can be petrol, diesel, hybrid or electric.

The guide warns that the submission date is when the department receives complete forms and supporting documents. If information is missing or incorrect, the date of the corrected submission applies. Buyers using a registered distributor or importer have that business submit the scheme application; owners importing a car for personal use apply themselves.

Other vehicle categories retain separate support. Electric commercial vehicles, motorcycles and motor tricycles continue to receive full first registration tax exemption until March 31, 2028. Eligible drivers with disabilities can apply for an exemption covering the first HK$300,000 of an electric private car's taxable value, subject to conditions, but must choose between that exemption and replacement scheme relief.

Key Points

• Hong Kong registered 1,316 electric private cars and 1,382 petrol cars, including hybrids, in September 2026.
• Electric cars held 48.78% of new private registrations, down from 87.59% in March.
• Registrations through the expired replacement scheme fell from 5,448 in March to 104 in September.
• The September reversal mainly reflected a fall in electric registrations, alongside a smaller increase in petrol registrations.
• BYD led scheme registrations from April to September with 2,984 cars, followed by Tesla with 2,840.
• Eligible earlier orders or shipment arrangements can still receive transitional relief, with applications due by February 24, 2027.
• Charging access and the cost of buying a car are central to proposals for further support.