New York could open the door to direct EV sales for automakers other than Tesla  

A New York Senator has introduced a bill that would eliminate a legislative waiver allowing Tesla to operate five showrooms in the state independently, instead of selling vehicles through franchised dealerships. In 2014, New York state passed a law barring automakers from selling cars directly to consumers, but Tesla was notably exempted. The exception stemmed from some lawmakers’ desire to reduce the nation’s dependence on fossil fuels.

New York Senator Patricia Fahy, who previously served in the New York State Assembly from 2013 to 2024, had offered consistent support for Tesla. However, Fahy’s change of heart was motivated by her view that Tesla CEO Elon Musk wasn’t promoting a green energy transformation as a senior advisor to President Trump. The New York Times reports that Fahy described Musk as: “part of an administration that is killing all the grant funding for electric vehicle infrastructure, killing wind energy, killing anything that might address climate change. Why should we give them a monopoly?”

Other EV manufacturers could benefit from Tesla’s loss

Senator Fahy is working to remove Tesla’s waiver to sell vehicles independently in New York by 2026, citing the exemption as an unfair advantage. If passed, the bill would result in Tesla’s five licenses to sell cars in the state directly to customers being redistributed to other electric vehicle (EV) makers. If this bill passes, drivers wanting to purchase a Tesla would have to travel out of state. In March, Musk responded to a social media post from Fahy saying it was “improper for lawmakers to target a single person or company,” according to The Daily Beast. New York Senator Jacob Ashby expressed a similar sentiment, telling Teslarati that “political disdain seems to be more at play.”

Around 30 states allow varieties of direct EV sales, with about a third limiting the sales to Tesla, according to the Electrification Coalition. New York isn’t the only state challenging Tesla’s selling cars directly to customers. Washington state proposed a bill allowing automakers other than Tesla to sell directly, but the measure failed. South Carolina, Rhode Island, Florida, Illinois, and Colorado are also considering new bills on direct EV sales, according to The New York Times. Atlas Public Policy data shows that New York currently has 172,000 all-electric cars on its roads and 114,000 hybrids, despite its initial goal of 850,000 EVs by 2025. In April, New York Governor Kathy Hochul announced $30 million in new funding for EV rebates and enhanced charging infrastructure in areas such as multi-family homes, offices, and other public spaces.

Final thoughts 

While removing Tesla’s ability to sell its cars directly to consumers in New York is controversial, the automaker has had a monopoly in the state with this practice since 2014. At the time, Tesla was essentially the only name in town when it came to quality EVs, but now, other manufacturers, like Rivian, are emerging and deserve a fair shot. Fahy isn’t trying to hide that her actions are in response to Musk’s White House role and her belief that it’s taking the country in the wrong direction regarding a green energy transformation. New York’s decision on Fahy’s bill remains to be seen, but if it passes, it could have a significant ripple effect on other state legislators.