Hong Kong has long been one of Tesla’s biggest markets, but it may not be for much longer—not a single newly purchased Tesla model was registered in April, according to data from Hong Kong’s transport department. 
 
 The plunge in interest in Tesla cars came after the government eliminated tax breaks for electric-vehicle (EV) owners, a policy that went into effect on April 1 and is expected to last until March next year. Now, the city has capped the tax waiver at HK$97,500 ($12,500) on private EVs, and is only applicable to first-time owners. There were 2,939 first-time Tesla registrations in March just before the new tax rules kicked in, around five times that of the number in February. 
 
 As a result, it now costs HK$925, 500 ($118,400) for a Tesla Model S 60, compared to HK$570,000 ($72,900) before the new tax policy—giving it little or no price advantage over a Mercedes-Benz. 
 
 First-time registrations don’t exactly equal to sales, but is nevertheless a useful proxy as the car needs to be registered in order to run on the road in Hong Kong, said (paywall) the Wall Street Journal, which first reported the story. Hong Kong had 11,004 EVs in use as of May this year, including privately owned and public transport vehicles, according to Hong Kong’s Environmental Protection Department. 
 
 A Tesla spokesperson wrote to Quartz that the company’s business did not “rely on” government policies and the company believed that Hong Kong market would continue to be “very strong”: 
 
 Hong Kong remains a significant market for Tesla and we continue to sell cars there each quarter. When the Hong Kong Government reduced the tax exemption for electric vehicles and increased the cost of our cars by nearly 100%, it’s to be expected that demand will be impacted in the period immediately following the change, particularly because of the large number who bought just prior to the change being implemented. 
 
 In 2015, new registrations for EVs in Hong Kong grew almost three times from 2014, Tesla said. Its Model S vehicles made up 70% of the city’s nearly 4,200 EVs in 2015. Tesla CEO Elon Musk said that the city’s tax waiver for EVs was “excellent.” 
 
 As interest in Tesla starts to wane in Hong Kong, the company has set its sights firmly on mainland China, where it plans to establish a manufacturing facility which would allow Tesla to dodge import taxes that are as high as 50% of the vehicle’s price. In 2016, China registered as many as 352,000 new EVs, compared to America’s 159,000 in the same period, a number that is set to increase as the government continues its fight against air pollution. 
 
 The piece has been updated with response from Tesla on July 10. ||||| Tesla Motors unveiled its latest electric car, the Model 3, on March 31, with a lower price tag and 2017 delivery date. Tesla chief executive Elon Musk heralded the Model 3 as a way to accelerate the world's "transition to sustainable transport." (Jenny Starrs/The Washington Post) 
 
 This post has been updated. 
 
 FREMONT, Calif. — It has been touted as Tesla’s first “mass-market” electric car — one that would lower the entry barrier into the company’s luxury niche. 
 
 Tesla rolled out the long-awaited Model 3 the first 30 recipients Friday night in Fremont, Calif., and prospective buyers, auto industry insiders, tech enthusiasts and anyone who has shelled out a $1,000 reservation deposit will undoubtedly be looking to see whether the car lives up to its billing as a vehicle with broad appeal. 
 
 For many, the breadth of that appeal hinges on the price tag. 
 
 Before the rollout event, Tesla had released few details about the pricing structure of its new car, noting that it would start at $35,000 and that people would be able to customize some features. A fully equipped Model 3 would cost about $60,000, according to the company late Friday. 
 
 [Here’s what we know about Tesla’s Model 3] 
 
 Rebates in a handful of states could lower the price for eligible customers. There is also a $7,500 federal income tax credit. But that tax credit only lasts until the company reaches 200,000 electric vehicles sold in the United States, and Tesla has already sold more than 100,000 vehicles. And the company announced at the event that there are half a million reservations for the Model 3. 
 
 A variety of customizations, such as motor options, greater battery life, enhanced autopilot and larger wheels, could push the Model 3’s price well above $40,000, analysts say. At that cost, experts say, the Model 3 would soar past the price of the average new car sold in the United States, as well as any vehicle that might be considered mass-market. Analysts say the Model 3 is an aspirational vehicle. 
 
 “The average transaction price for a new car is about $36,000,” said Rebecca Lindland, an executive analyst at Kelley Blue Book. “That’s the sweet spot that new car buyers can afford.” Lindland noted that mass-market buyers aren’t necessarily part of the middle class. 
 
 She expects the Model 3 to appeal to a category of buyers known as “early adopters.” These are consumers who are slightly more risk averse and have less wealth than the “innovators” who purchased the Model X and the Model S. 
 
 Each year, roughly five percent of Americans buy a new car. Auto prices hit an all-time high in 2o16, increasing 2.7 percent from the year before and nearly 13 percent since 2011, according to Edmunds.com, which tracks auto prices. Yet, despite rising auto prices, people are still buying cars in record numbers in the United States. Sales for 2016 set a record of 17.6 million cars and trucks, an increase over the 17.5 million vehicles sold the year before, according to figures from sales tracker Autodata. 
 
 To make those purchases possible, analysts say, growing numbers of new-car buyers are stretching loans longer than ever before. The average car loan is $30,534, and the average time lien holders take to pay it off is 68 months, according to Experian. But analysts say new-car buyers are stretching loans out for as long as 84 months, or seven years. Personal finance experts have advised that people keep auto loans to four years. 
 
 “I think a lot of folks will be leasing the Model 3,” Bankrate.com analyst Claes Bell said. “In the U.S., the median household income is $56,516 dollars. At that income, a lot of folks are going to have a hard time affording a vehicle around $30,000 in price, much less anything higher.” 
 
 Tesla chief executive Elon Musk has made clear his desire to bring “compelling mass market electric cars” to the world, noting in a 2013 blog post that if the company could have achieved that mission with its first product, it would have. Due to the limitations of a start-up, Musk wrote, Tesla opted to build a sports car that had the “best chance of being competitive with its gasoline alternatives.” He said that Tesla’s initial offering could be misinterpreted as company officials “believing that there was a shortage of sports cars for rich people.” 
 
 [Lyft will launch self-driving car rides by the end of this year] 
 
 But observers say that air of exclusivity, paired with Tesla’s futuristic branding, is exactly its appeal. 
 
 Roger Pressman, the founder of EVannex — a Tesla aftermarket accessories company — may be one of the few people outside of Tesla who caught a glimpse of the Model 3’s emerging demographic when he stood in line with several hundred people anxious to put down their deposit for the vehicle last year. 
 
 At a glance, Pressman said, Model 3 buyers are between the ages of 25 and 45 and most have never owned an electric vehicle. They’re drawn to Tesla, he said, because of the “sashay” of Musk’s futuristic vision and their desire to drive an environmentally-friendly vehicle. 
 
 “People in that age range are very used to using devices, and this car is a device on wheels,” Pressman said. “I do think the demographic will be very similar to the demographic that buys the BMW 3 Series.” 
 
 MORE READING: 
 
 Billionaire burn: Musk says Zuckerberg’s understanding of AI threat ‘is limited’ 
 
 YouTube is tricking people who search for ISIS videos 
 
 How doctors used virtual reality to save the lives of conjoined twin sisters
– The weekend brought photos of Tesla's first Model 3 sedan to roll off the production line, but it wasn't all positive news for the automaker. The Wall Street Journal on Sunday posted an analysis of data out of Hong Kong that suggests just how severe an effect the reduction of a significant tax break for electric vehicles has had on Tesla. The tax break had dropped the cost of a Model S 60 to a roughly $73,000 price tag; under the new tax rules, it costs about $118,000, per Quartz, which notes that elevated price is basically the same as buying a new Mercedes-Benz there. March was the last month where the electric vehicles were available at the lower effective price. Newly purchased Teslas registered by first-time electric vehicle owners that month: 2,939. And in April: zero. And then in May: five. Tesla said in a statement that its "business does not rely on" favorable government policies, though its securities filings note it is not immune to the effects of changing such incentives. The Journal notes Tesla is working to get its vehicles into China, citing one gloomy quote on the subject from an analyst: "Hong Kong is the fashionable China. It's not exactly painting a glowing picture for the future of Tesla in China."