SCMP: Hong Kong environmental groups have urged the government to focus on accelerating the commercial use of electric vehicles and enhancing green infrastructure, after scrapping a tax concession scheme for private cars that has cost HK$30 billion over the past decade.
Green groups said on Friday that they supported the government’s decision to end the first registration tax (FRT) concessions for private electric cars, including the “One-for-One Replacement Scheme”. The move was announced by Financial Secretary Paul Chan Mo-po in his budget address on Wednesday.
The scheme offers car owners a higher FRT concession of up to HK$172,500 (US$22,056) when they scrap and deregister an eligible older private car in exchange for a new electric vehicle (EV) purchase.

Chan said in his address that about 70 per cent of newly registered cars in Hong Kong were EVs and the need for the concession no longer existed.

“From a modest variety of electric vehicles with higher prices to a larger variety of models with heightened comfort and better features, and a steady drop in prices, we believe electric cars have become competitive enough,” he said.

In response to queries from the South China Morning Post, the Transport Department revealed that more than 128,000 vehicles had received the tax incentives since 2018.

As of the end of December 2025, Hong Kong had about 149,000 EVs, or about 16.3 per cent of the total number of vehicles in the city, the department said.

Figures from the Environment and Ecology Bureau this month showed that the government had waived more than HK$30 billion over the past decade through first registration tax concessions, including the one-for-one scheme.

Around 140,000 of the EVs were private, with the growth in recent years attributed to significant improvements in factors such as price, charging infrastructure, models and performance, the bureau said.

The bureau projected that the number of private EVs could exceed 290,000 by 2030.

In comparison, the waiver scheme for commercial vehicles, which ends in March 2028, has only accumulated HK$100 million over the past decade.

Last year, the penetration rate for electric commercial vehicles was only around 19 per cent, compared with 70 per cent for private vehicles.

Currently, just 0.5 per cent of the 18,000 licensed taxis are electric while only 1.4 per cent of the more than 6,000 buses owned by four operators were e-buses as of October 2024.

Steven Chan Wing-kit, assistant environmental affairs manager at The Green Earth, said it was a “pity” that the government decided to end the scheme, although he agreed that the market for private EVs was now much more mature.
He noted that the penetration rate of commercial EVs was still very low and suggested that the government could pivot its efforts to help businesses transition.

“If we want to continue promoting electric vehicles, we should focus subsidies on commercial vehicles, as the penetration rate of electric commercial vehicles is far lower than that of private cars,” Chan said.

“Since commercial vehicles travel much longer distances, electrification would further reduce roadside air pollution.”

Think tank Civic Exchange said it welcomed the decision to stop extending the FRT concession for private EVs.

Executive director Lawrence Iu said that although the scheme had encouraged car owners to switch to EVs, the number of private vehicles on the road had ultimately increased by more than 2 per cent from 565,213 in 2018 to 578,001 in 2024.

He said that promoting the use of EVs for commercial purposes would be a crucial move in reducing carbon emissions.

“Challenges faced by commercial electric vehicles include the limited availability of charging infrastructure and the high cost of electric vehicles,” he said.

“But the government is taking steps to address these challenges, such as investing in green corridors and promoting the use of electric vehicles for commercial purposes.”

Pointing to the United Kingdom as an example, Iu said the government could tax EV users through modest mileage-based charging to provide a fair road-use contribution framework while maintaining clean mobility incentives.

Jeffrey Hung Oi-shing, chief policy research officer at Friends of the Earth, said that to achieve Hong Kong’s goal of carbon neutrality by 2050, more resources should be allocated to commercial vehicles and public transport.

“Commercial vehicles play a significant role in pollution and roadside carbon emissions,” he said.

“The focus should be on improving the infrastructure, such as charging facilities, to support the growth of electric commercial vehicles.”

Hung also urged the government to cooperate with mainland China to introduce more electric commercial vehicles to the Hong Kong market.

Iu noted that the government had been stepping up efforts to support taxi and public transport operators to switch to electric alternatives.

“Ultimately, they should encourage more people to switch to public transport,” he said.

Hung suggested that the government improve planning in new town developments and invest in greener transport infrastructure.

“Better road connectivity, bike lanes and pedestrian-friendly infrastructure would encourage the use of environmentally friendly modes of transport for their last-mile commute, like many other international cities in the world,” he said.

Originally published on SCMP on 28 February 2026.