Tesla’s future in Hong Kong doesn’t depend on the number of cars sold to private owners.

As expected, sales and registrations of new Tesla’s in Hong Kong are down (to zero apparently) after the expiration of the sales tax incentive. But Tesla’s future in Hong Kong really isn’t about the number of cars it sells to private citizens.  This is because Hong Kong is a small island with one of the world’s best public transit systems and one of the world’s highest population densities.  Car ownership is unnecessary, expensive, really just a status symbol of the ultra-wealthy.  So whether Tesla’s market share (vs competitors like BMW, Mercedes, Audi, and Porsche) is 1% or 100%, it doesn’t really matter.

The real opportunity is for Tesla to work with the Hong Kong government to replace the aging taxi fleet.  Currently there are approximately 18,000 taxis in Hong Kong giving about 1 million rides a day (http://www.td.gov.hk/en/transport_in_hong_kong/public_transport/taxi/).  Hong Kong is only 425 sq miles, just a little bigger than New York City.  Most Hong Kong taxis are of the Toyota Crown Comfort sedan variety and burn Liquified Petroleum Gas, a fuel that is “cleaner” than diesel but still polluting and greenhouse gas emitting.  There is a huge opportunity for Tesla to work with the Hong Kong government to deploy cutting edge, zero-emission, low-maintenance, self-driving Model 3’s.  Once Tesla has fully ramped Model 3 production, it could produce enough custom Model 3 taxi variants in 2 weeks to replace the entire Hong Kong taxi fleet. And as a vertically integrated clean energy company, Tesla can bundle superchargers, solar panels, and battery storage systems to support the taxis.