Tesla’s sales in Hong Kong have decreased since a government incentive programme removed a tax break for electric vehicles on April 1.

According to Fox News, the collapse followed a surge in sales before the tax change in February, with almost 3,700 new Tesla registrations in its first quarter and 2,939 by March.

Despite Tesla reporting that its vehicles delivery sales were at its highest by 25,000 in January to March, it fell by 22,000 by June.

“Tesla welcomes government policies”

Data from Hong Kong’s Transportation Department showed that the Chinese territory didn’t register any new sport-utility Tesla Models in April, such as its Model X or Model S.

Tesla’s Model X and Model S is weakening ahead of the launch of its Model 3, a US$35,000 sedan that begins production this month, raising concern for analysts.

Tesla said in a statement: “Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles, however, our business does not rely on it.” Adding: “At the end of the day, when people love something, they buy it”.

Tesla also noted on its website that US purchasers are eligible for a US$7,500 federal income tax credit, plus additional incentives in some states.

Written by Leah Alger