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Things to Know About Driving Electric Vehicles in Hong Kong
Governments around the world are addressing the growing concerns of air pollution and climate change with initiatives to reduce and ultimately eliminate vehicular emissions. The Hong Kong government has set out to achieve zero vehicular emissions before 2050 with the newly announced Hong Kong Roadmap on Popularisation of Electric Vehicles.
Electric Vehicles in Hong Kong: Where We Are At Now
In 2020, electric private vehicles made up 2.7% of private cars in Hong Kong. Despite it being a relatively small percentage, statistics have shown an increasing acceptance of electric vehicles (EVs) among the public. In 2010, the percentage of electric vehicles among all new private cars was just 0.1%. This percentage grew to 5.1% in 2015 and to 12.4% in 2020.
We can expect an increase in electric vehicle ownership in Hong Kong as more options are continually introduced into the market. As of 31 May 2021. As of 31 May 2021, 138 electric vehicle models have been approved by the Transport Department, of which 103 models are private vehicle models. The government is constantly updating this list so that the electric vehicle becomes more accessible in Hong Kong.
Electric Vehicles are Here to Stay — and Here’s Why
The most obvious reason to drive an electric vehicle is the environmental benefits. Without tailpipe emissions from diesel and gas powered vehicles, the emission of CO2 and other poisonous gases that contribute to air pollution and global warming is greatly reduced. Furthermore, compared to combustion engines, electric motors are more energy efficient.
Long-term cost effectiveness of electric motors compared to internal combustion engines is another reason why many car owners in Hong Kong are considering switching to electric vehicles. Unlike gasoline prices, which fluctuates constantly due to international trends and situations, electricity cost is much more stable.
Battery range is another top concern for electric vehicle shoppers when deciding which vehicle to purchase. Newer models introduced in the last two years generally have a range of over 300km under a single charge, with some even exceeding 500km, demonstrating how electric vehicles are slowly catching up with the range of conventional gas-powered vehicles. For example, the fully electric Tesla Model 3 Long Range AWD has a range of 580km (WLTP) on a single charge.
As the global trend to promote electric vehicles gains momentum, the Hong Kong government is likewise planning on stopping all new registration of internal combustion private cars, including hybrid vehicles, in 2035 or earlier. There are plans underway to make the city more EV-ready, including expanding its charging network to enable owners to charge their electric vehicles at their homes or at public charging stations. Hong Kong aims to have at least 150,000 chargers in private buildings by 2025. There will also be more specialised education and training for technicians and mechanics to make EV maintenance services more widely available.
Financial Incentives to Promote Use of EVs
In addition to making Hong Kong more EV-friendly, the government is also offering financial incentives to promote the use of EVs. Existing First Registration Tax (FRT) Concessions for Electric Vehicles and One-for-One Replacement Scheme have recently been extended to 31 March 2024. The FRT for electric private vehicles will continue to be waived for up to HK$97,500. The One-for-One Replacement Scheme, which provides higher FRT concessions to car owners who scrap and de-register their old fuel-propelled private cars before registering a new electric vehicle, has also been updated. From 24 February 2021 to 31 March 2024, EV owners can enjoy a raised FRT concession cap of $287,500, an increase from the previous cap of HK$250,000, under the One-for-One Replacement Scheme. These incentives encourage new and existing car owners to opt for electric vehicles.
EV Insurance: Third-Party vs. Comprehensive Car Insurance
Just like any other types of vehicles being used in Hong Kong, EV owners and drivers are responsible for ensuring they have valid third-party risks coverage with a minimum coverage of HK$100,000,000 for the concerned vehicles. Although the laws only stipulate that owners purchase a third-party risks insurance policy, owners should carefully review whether the coverage from those insurance policies is sufficient.
Third-party-only car insurance, in general, only covers bodily injuries, death and property damage to third parties in case of an accident. Damages to the insured’s vehicle are not covered. Comprehensive car insurance policies not only cover everything third-party-only policies do, but also the insured’s vehicle and extra benefits such as towing/roadside service and personal accident coverage for the insured.
An important aspect of driving an EV is charging the vehicle. When deciding the extent of insurance coverage, owners should also consider the potential risks that may come with it. For instance, Liberty Insurance’s InsureMyTesla, a comprehensive mileage-based program, offers Charger Liabilities Protection and Wall Connector Coverage for Tesla electric vehicle owners. It covers the replacement costs of private electric chargers and accidents and damages caused by direct usage of designated chargers.
Additionally, choosing a manufacturer-appointed insurer can ensure one’s motor insurance coverage is tailored to the unique needs of their vehicles. As the authorised insurer of Tesla Hong Kong, Liberty Insurance receives the latest updates regarding Tesla motors and is constantly making sure that the InsureMyTesla coverage is keeping up with these updates.
Do You Have a Question About Motor Insurance?
As one of the leading Insurance providers in Hong Kong, we offer a wide range of insurance products and services for individuals and corporations, including private motor, individual and group Life and Medical, office and shop packages. Get in touch with Liberty Insurance today.