by ZHOU Shuqi

Hong Kong is seeing a surge in last-minute electric vehicle buying as a key subsidy nears expiry, with showrooms crowded and inventories running low.

WANG Jia, who works in finance in Hong Kong's Central district, had not planned to buy a car. That changed after the Hong Kong government said on February 25 that its eight-year "one-for-one replacement" scheme for electric private cars would not be extended beyond March. The program offers a first registration tax waiver of up to HK$172,500 for scrapping an old petrol car.

The incentive has triggered a rush to buy, with dealers reporting a surge in orders. Some dealerships stayed open until midnight on the night of the announcement as buyers rushed to place orders in the hope of taking delivery before the deadline. Available stock has since tightened sharply.

By the time Wang started shopping, most dealerships were reporting no available stock. "Even if I pay a HK$6,000 deposit now, I'm just joining a waiting list," she said after visiting a Zeekr showroom, where only a handful of display vehicles remained, and best-selling models had already sold out.

Similar scenes are playing out across the city, from Xpeng to BYD, with stock running low and buyers crowding around the remaining cars.

The surge reflects the outsized role of policy in Hong Kong's car market, where taxes account for a large share of vehicle prices. The subsidy has helped lift EV penetration from 1 per cent in 2018 to about 70 per cent in 2024, placing the city among global leaders.

Chinese brands have been the main beneficiaries. Official data show that BYD became Hong Kong's top-selling car brand in 2025 with 9,751 new registrations, overtaking Tesla, while Zeekr, Xpeng and MG also ranked among the market's top 10 brands.

Their appeal lies in both price and product — from lower running costs, with petrol bills often exceeding HK$3,000 a month, to faster model rollouts and better-equipped cars, which have made Chinese brands more appealing. For buyers like Wang, the decision is no longer just about cost, but about overall value. Wang said she favored a Chinese brand for its interior, space and safety, adding that it offered better overall value at a similar price point.

This shift in competitiveness is also visible across segments. In the multi-purpose vehicle segment, models from Zeekr and Xpeng have gained ground against long-dominant imports such as the Toyota Alphard, underscoring a broader shift away from imported incumbents.

But the current buying frenzy is unlikely to last.

"Subsidy rollbacks are a typical turning point in EV markets," said SI Yuanhua, an analyst at Roland Berger. "Sales and penetration rates usually see a short-term decline before stabilizing."

He added that Hong Kong, with its right-hand-drive system and relatively mature consumer base, offers a practical testing ground for Chinese carmakers expanding overseas. For Chinese automakers, the city also serves as a showcase for overseas investors and consumers, helping build brand recognition beyond mainland China.

Dealerships are already preparing for more intense competition, both against foreign brands and among Chinese players. A price war, however, is unlikely in a market that sells only about 40,000 to 50,000 new cars a year. Analysts say the market is too small to sustain aggressive discounting, which would be hard to justify on cost grounds and could also hurt brand positioning.

Instead, the next stage of competition may shift to infrastructure and service.

Charging infrastructure has not kept pace with rapid EV adoption. Limited land and high installation costs have slowed the rollout of both public and private charging networks, leaving uneven coverage and a shortage of fast-charging options. Sales staff said many residents — especially those living in serviced apartments who cannot install home chargers — rely heavily on public charging.

After-sales service is another weak spot. EV maintenance, particularly battery-related work, requires specialized expertise that remains in short supply.

Dealers are already feeling the shift. A salesperson at BYD said the end of subsidies could weaken the price advantage that has driven recent demand, while a salesperson at Aion said competition among Chinese brands was intensifying as more of them entered the Hong Kong market.

As the subsidy deadline approaches, the buying rush of recent weeks may prove short-lived.

But the challenge is unlikely to be limited to pricing. As EV adoption has surged, gaps in charging infrastructure and after-sales service have become more visible — issues that could weigh on consumer experience over time.

Si said carmakers need to take a longer-term view of the Hong Kong market, as competition shifts beyond vehicle sales to charging, maintenance and service across the full vehicle lifecycle.