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Soaring Demand for Electric Vehicles Leads to Parts Shortage and Untimely Delivery Disputes Manufacturers Urged to Be Frank About Uncertainties to Avoid Upsetting Consumers’ Expectations

  • 2023.03.15

In recent years, the Government has launched the “One-for-One Replacement” Scheme for electric vehicles’ (EV) first registration tax (FRT) concession to reduce air pollution. Added to that the persistently high fuel prices, more car owners have been incentivised to switch to EVs. According to the Transport Department, the ratio of EVs among first registered vehicles in Hong Kong is rising rapidly by year, from 6.3% in 2019 to 52.8% in 2022, which means 1 in every 2 newly registered private cars is an EV. However, if configuration or features are changed during the purchase process, or if the delivery date differs from what was originally agreed, consumer disputes may arise.

The Consumer Council opines that manufacturers should be open and honest to consumers on potential changes and uncertainties before accepting an order, and be cautious when providing a delivery date. In the event of a dispute, they should actively follow up and identify a solution with affected customers. Before purchasing a new or used EV, consumers should make sure that the seller has included vital conditions and configurations in the sales contract and study the terms carefully, including how the transaction will be handled if the seller fails to fulfil the contract. Purchase of an electric vehicle is a high-value transaction and contributes to better air quality, so both manufacturers and consumers should communicate clearly to reduce disputes.

Case 1: Park Assist Function Scrapped Due to Chip Shortage

The complainant pre-ordered an EV from Company A early last year and paid 10% of the quoted price as deposit. 4 months later, he learnt through the grapevine that the Park Assist function, which was a standard EV configuration, had to be removed due to the shortage of computer chips. Upon the complainant’s enquiry, Company A acknowledged that the information was correct and offered either compensation or the option to cancel the transaction and refund the deposit.  The complainant indicated willingness to wait for the chip, but Company A responded that there was no definite date for chip availability and suggested that the complainant should consider cancelling and wait until the chip was available again before placing a new order, but the price of the vehicle might increase by then. The complainant neither agreed to Company A’s suggestions nor wanted to cancel the transaction, thus approached the Council for assistance.

Company A replied with 3 options to the affected customer, including removing the Park Assist function, but upgrading the interior trim along with a complimentary commemorative hood ornament, worth about $18,000 in total; the second option was to delay production of the order and wait for the chip, but the customer would have to bear the price difference; or finally, customers could choose to cancel the order with deposit refund. As the complainant accepted none of the options, the Council tried to conciliate again and advised Company A to do its best to meet consumer expectations as the original product description included the Park Assist feature. However, Company A insisted on the 3 options, and the complainant finally chose to accept the interior trim upgrade.

Case 2: Non-acceptance of Early Delivery Resulted in Extra Payment in Car Price and Tax Differences

The complainant paid a deposit to Company B in March last year for the purchase of an EV manufactured and delivered in 2023, and this arrangement was repeatedly confirmed by Company B’s staff. However, in September 2022, the complainant suddenly received notification from Company B of early delivery and was required to reply within 7 days or the order might be deemed cancelled and deposit non-refundable. The complainant refused the changes and insisted for delivery in 2023 according to the original agreement, but Company B stated that it could only delay delivery until the fourth quarter of 2022 at the latest, while the production date would also be 2022. If the complainant wanted an EV produced in 2023, the price would increase by about $70,000 and the FRT would increase by about $38,000 as a result. The complainant was dissatisfied with Company B's breach of promise and lodged a complaint with the Council.

Upon follow-up by the Council, Company B responded that the complainant could choose 2023 delivery with no changes in price and first registration tax, but the “Autopilot” feature included in the original order would be removed and the “All-wheel Drive” feature would be changed to “Rear-wheel Drive”. If the complainant wished to keep the configurations and price unchanged, he would have to bear the increase in 2023 FRT costs. The complainant could also cancel the order with a deposit refund or accept the EV delivery in 2022 as notified. The complainant finally chose to have delivery in 2023 and was willing to shoulder the potential FRT increase.

Case 3: Contrary to Contract, Free Lifetime Charging Service Non-transferable

The complainant purchased a 5-year-old second-hand EV through Company C last August and was promised lifetime free charging service provided by the EV manufacturer. The sales contract also stipulated a full refund if the service could not be provided. However, when the complainant created an account with the EV manufacturer upon receiving the vehicle, he was told that free charging was only available to first-hand car owners and the service was non-transferable. The complainant then approached Company C and was told another used electric vehicle of the same model and age with lifetime free charging service would soon be available for the complainant as replacement. However, Company C eventually indicated that they had no replacement available and refused to refund. So the complainant filed a complaint with the Council.

Company C responded to the Council that they assumed the free charging service could be transferred to the complainant along with vehicle possession, and emphasised that it was not a deliberate attempt to deceive. After conciliation, Company C offered a refund of $15,000 to the complainant as a subsidy for charging costs.

An EV often costs hundreds of thousands of dollars, an expensive purchase and non-frivolous decision for consumers. Aside from the brand and design, the configuration, delivery date, and support services are all important consideration factors for consumers. Any changes made before delivery by the trader would mean a discrepancy from the understanding and expected agreement at the time of purchase. If a supplier needs to remove features from a vehicle due to shortage of parts, even if other features are upgraded as compensation, it would still affect consumer expectation and driving experience. Variations in the delivery date and support services could even bring extra financial burden that is unacceptable for consumers, and could upset other arrangements made to accommodate the new car. For example, if the delivery date misses the 31 March 2024 deadline for the Government's “One-for-One” EV FRT concessions, consumers would have to pay 46% to 132% of the vehicle’s taxable value in FRT.

Although electric vehicles are becoming increasingly popular, there is still much room for improvement in terms of technical support and customer service. Consumers should be aware of these considerations:

  • Before an EV purchase, it is advisable to pay attention to the availability of charging facilities in areas frequented, such as home and workplace. Consent of the owners’ corporation or property management company is necessary before any plans to install charging facilities at home parking areas. As installation of fast DC charging facilities requires higher charging power, power companies should be consulted beforehand to determine whether the power grid can handle the demand, and whether there is a need to switch to three-phase power supply;
  • Although the Government has indicated commitment to promoting EV technology and maintenance personnel training, and additional courses on EV maintenance are offered in colleges and universities, servicing and parts supply for EVs are still less developed than traditional fossil fuel vehicles. Both maintenance technology and supply of vehicle parts are still heavily dependent on the original manufacturer, resulting in high costs and longer waiting time for parts. Consumers are advised to budget for repair and maintenance expenses before purchase;
  • When purchasing a used EV, consumers should pay attention to the age of the vehicle, the number of times it has changed hands, the expiration date of licenses, and the condition of the vehicle. In addition to examining the body, paint, and interior of the car, it is also advisable to arrange a test drive with the seller, and it is best to have the car inspected by an independent or familiar dealership.


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