In Hong Kong, Even Your UberX Driver Has a Tesla
Have you ever ordered an Uber and climbed into the back of the wrong Prius?
That doesn’t happen much in Hong Kong, where—instead of the stereotypical Toyota—you’re far more likely to mix up Teslas. Nearly 7% of cars sold in Hong Kong last year were Teslas, and the company accounted for as much as 87% of newly registered electric vehicles in 2016’s final quarter, according to Bloomberg.
In fact, take a short drive downtown, and you’ll spot Teslas everywhere, including the coveted Model S. Hong Kong has accounted for about 6% of global sales of the sedan.
So common here is Tesla (TSLA)—the storied brainchild of Silicon Valley legend Elon Musk, who last January praised Hong Kong as “a beacon city” for electric vehicles—that it’s become a standard-issue Uber vehicle, available to hail as an UberX, the app’s cheapest option, and not just as a premium Uber Black. That means you can ride in a Tesla for a price that rivals those of Hong Kong’s famously affordable taxis, which charge as little as $9 or $10 for an 8-kilometer ride.
The first couple of times Heather Chan hailed a Tesla through Uber, she “was quite excited, like, ‘Oh my God, this is such a cool car, with a big screen.’” The 34-year-old insurance agent estimates she’s taken 20 Uber rides in Tesla vehicles so far.
Chan said she’s always excited to show friends from out of town how accessible the luxury car is. “It’s a bit of a status thing,” she said. “Rather than standing on the street trying to grab a taxi, you have a private car picking you up.”
Uber, which initially made Tesla rides available only through Uber Black, began offering the Model S as rental cars after noticing the excitement from passengers.
“In 2016, Tesla was the third most popular car on the Uber platform in Hong Kong,” Kenneth She, general manager of Uber Hong Kong, told Fortune. “Riders in Hong Kong love getting around in a Tesla, and Uber is happy to make that easy and affordable.”
One Model S owner said that not having to worry about the fuel cost made it easy for him to work for Uber part-time.
“I do it for fun,” said the driver, who has another full-time job and called his shift “an excuse to get out of the house” after his kids go to bed at night. “I want to drive more but don’t want to pay that much. So I wanted an electric car.”
Tesla’s guarantee of lifetime free charging at its Superchargers—which the automaker is partially winding down—didn’t hurt either, Mark Webb-Johnson, chairman of Charged Hong Kong, an EV advocacy and drivers’ support group, told Fortune.
On the consumer side, several factors have been behind the rise of Tesla in Hong Kong, which Musk last year predicted would someday become “the leader of the world” in EV adoption. For one, there’s a lack of competition, says Kenneth Ng, president of the Hong Kong Automobile Association.
“Major car dealers are still focused on importing cars with combustion engines—and even if they have introduced, maybe, one electric car on their stocks, the car is not a real [comparison] to the Tesla S class,” he told Fortune.
For more on Tesla, see Fortune’s video:
Hong Kong buyers are also attracted to the “high horsepower” and on-trend aesthetic of Tesla vehicles, which have become a cult favorite in other countries, said Ng.
But an important, if not chief, reason of Tesla’s success in Hong Kong has recently been eliminated in large part. Wanting less cars on the city’s notoriously congested roads, the government on April 1 reduced a long-held tax waiver on electric private cars, taking the tax on a Model S up by about 80%, or from about HK$600,0000 (about US$77,000) to nearly HK$1.1 million (about US$141,000).
“The tax concession has significantly diminished,” said Ng. “I believe that it will certainly affect the sales of electric cars, particularly those which are in the upper brackets.”
The latest first registration figures provided to Fortune from Hong Kong’s Transport Department indeed show stunning decline. While 2,939 new Teslas were registered in March—out of 2,964 electric private cars—both numbers fell to zero in April (although that doesn’t necessarily mean that no Teslas were sold last month). For comparison, a total of 6,392 new private cars were registered in the territory in March, but that number plunged by over half to 2,868 in April. Experts say the number will eventually pick up again, but to nothing like their previous levels. Tesla declined to comment on the figures to Fortune.
The Uber driver who spoke with Fortune said he certainly wouldn’t buy a Tesla under the new tax regime.
“The first registration tax makes the car practically double in price,” he said, adding that Tesla was still a “fairly new” carmaker. “To be honest, if I’m going to spend HK$2 million-plus [about US$256,600], I would buy something else.”
Drivers may be disgruntled, but for now, Uber passengers in Hong Kong can still enjoy one of the best ride-hailing deals anywhere. The only problem is trying to work out which of the many waiting Teslas is yours.