Bill would expand direct sales of electric vehicles to consumers

ALBANY — A Long Island lawmaker is pushing a bill that would allow makers of electric vehicles to expand direct sales to consumers without going through an automobile dealership.

Automobile dealers are opposing it, saying, among other things, it’s a battle of "Main Street vs. Wall Street."

At issue is a bill sponsored by Sen. Todd Kaminsky (D-Long Beach) and Assemb. Patricia Fahy (D-Albany) that would lift the cap on electric vehicle outlets in New York, which is currently limited to five.

They say doing so would expand sales of zero emission vehicles, give consumers more choices and help the state reach its "green energy" goals. They say New York badly trails other states — especially California — in sales of electric vehicles.

"When you look at other states, New York is not where we need to be," Kaminsky said at a news conference outside the State Capitol, standing with environmental groups and electric vehicle company representatives.

"This is giving consumers an opportunity to buy electric vehicles the way they want," Kaminsky said.

Currently in New York, by and large, all automobiles must be sold through old-fashioned dealership franchises, as Chevrolets, Fords and other brands have been sold for decades. The law prohibits, say, General Motors, from opening its own direct sales show rooms.

Tesla, the California-based electric vehicle company, is the one exception in New York, having received authorization to open five showrooms as a result of a settlement of a lawsuit in 2014.

Now, Tesla, Rivian and other manufacturers are lobbying to open up sales not only in New York but also in at least eight other states. They say 19 states have no cap on the number of direct-sales locations.

Lawmakers note that about 20,000 electric vehicles were sold in New York in 2020 — seven times fewer than sales in California. Further, they say New York has achieved just 3% of its goal of having 850,000 electric vehicles on the road by 2025.

Car dealers have argued the cap ensures consumers can negotiate lower prices by shopping different franchises and still get their cars serviced if carmakers go out of business.

Additionally, they have characterized the fight over direct sales as "Main Street vs. Wall Street," pitting local franchisees against billionaire backers of electric vehicles, such as Tesla’s Elon Musk.

The Greater New York Automobile Dealers Association noted downstate franchisees employ 72,000 people directly and indirectly.

"This bill would do little to meet the goals of making EVs more affordable, or investing in the critical electric infrastructure that New York consumers need," said Mark Schienberg, president of the dealers' association, referring to electric vehicles. "The franchise system protects against monopolies and fosters competition, which keeps prices lower for consumers and leads to stronger, more reliable customer service."