Direct sales of electric vehicles in New York State impeded by lobbyists

ALBANY — A bill that would allow New Yorkers more opportunities to buy electric vehicles directly from manufacturers at lower costs was stalled in the State Legislature this year by powerful lobbying from automobile dealers and unions, delivering a blow to the state’s own climate change plan, records and interviews show.

The bill was introduced in February to meet what the measure calls an “overwhelming demand” for direct purchases from independent manufacturers of electric vehicles, such as Tesla. The bill never moved out of the Senate and Assembly transportation committees.

The result is that New York State will continue to have just five of these direct-sales outlets run by manufacturers to order electric and other zero-emission vehicles, although traditional automobile dealers are increasingly selling their brands of electric vehicles. The direct sales offices are on Long Island, in New York City and in Westchester County, forcing some New Yorkers across the state or out of state to buy. The two Long Island stores are in Manhasset and Smithtown.

“It’s incredibly important,” said Sen. Pete Harckham (D-South Salem) about the bill he co-sponsored. “Transportation is the largest emissions sector, at 36%. We signed a memorandum of understanding with a bunch of other Northeast states … and we’re only 10% of the way there.”

That agreement calls for New York to have 850,000 electric, zero-emission vehicles on the road by 2025.

As of June there were 150,143 electric vehicles registered in New York State, including 19,934 in Nassau County and 20,609 in Suffolk. Each county has more EVs than any borough or county in the state.

Statewide, original registrations of EVs jumped from 7,909 in 2016 to 43,013 last year, according to the Department of Motor Vehicles.

Yet nationally New York is below average in EV registrations. The U.S. Department of Energy in a 2021 report found New York had 51,810 registered EVs compared with 80,900 in Texas, 95,640 in Florida and 563,070 in California. New York is one of nine states that prohibit expanding direct-sales operations beyond those that already exist, according to the National Conference of State Legislatures. At least 17 states ban the direct sales entirely, while 18 states allow them, according to NCSL.

“Make no mistake: We are falling back,” said Assemb. Patricia Fahy (D-Albany), co-sponsor of the bill. “To say we have a long way to go is an understatement.”

Harckham and Fahy said the bill, if passed, would increase competition and lower the cost of electric vehicles, which has been an obstacle for the zero-emissions car market.

“We have to get something done if we are going to meet these goals,” Harckham told Newsday.

He said he is optimistic the bill eventually will pass in part because American automakers have committed to fully joining the electric vehicle field since the bill was first introduced and died in 2021.

“We have got to find a way to open up this pipeline and increase competition,” he said.

The Albany-based Automobile Dealers Association didn’t respond to requests for comment. Its website, however, states direct sales will hurt New York and framed the debate as “billionaires versus Main Street.” The association contends that climate change isn’t the central focus of the issue, but profits for companies such as Tesla, which is owned by billionaire Elon Musk.

Dealers are also facing increased competition from online sales companies that attract younger buyers comfortable with buying online. Companies such as Carvana legally operate now because they have a minimal brick-and-mortar presence.

The automobile dealers have a lot of political clout and community roots.

Their associations have contributed more than $2.4 million to campaigns since 1999, mostly to Democrats, who now control both chambers. The associations also have contributed more than $25,000 to Gov. Kathy Hochul’s campaign since she took office in August 2021 and more than $60,000 to her predecessor, Gov. Andrew M. Cuomo, according to state Board of Elections records. The auto dealer groups also spent more than $25,000 in lobbying legislators in January and February alone, according to state records.

Back in legislators’ districts, dealers are often high-profile names and major taxpayers, employers and advertisers, as well as sponsors of civic events and youth sports.

More electric-vehicle charging stations coming

The Automobile Dealers Association on its website also noted that there are too few charging stations to accommodate more electric vehicles, although subsidizing more charging stations has been a major objective of the state since 2016. In April, Hochul announced $8.3 million in grants to install 250 more public charging stations in 70 communities statewide. It is part of the state’s plan to have more than 1,300 charging stations statewide over the next five years. In 2022, 454 charging stations were built with the grants.

The State Legislature also passed a bill in June that would require parking garages, many of which already have charging stations subsidized by the state, to provide public access to the charges by waiving the parking fee for those only charging their vehicles. The bill awaits Hochul’s approval or veto.

In part, the traditional dealers are confronting a changing landscape for buyers.

Auto dealers “are committed to a business model in New York State that says you have a brick-and-mortar sales facility,” Harckham said. He said auto unions also oppose the bill, which they see as allowing companies with nonunion labor to flourish. Fahy noted that Musk has made anti-union statements that hurt support for the bill.

The five retail offices now allowed to operate statewide were established before 2014. That’s when then-Gov. Cuomo negotiated a compromise between Tesla and the Automobile Dealers Association over a proposal to ban the stores. The compromise allowed Tesla to keep the five retail offices and to grow at a later date under a “strengthened dealer franchise law,” according to the governor’s office. Since then, the number of direct sales operations has remained at five.

“The state’s electric vehicle effort is stuck in neutral,” said Blair Horner, executive director of the New York Public Interest Research Group, which lobbies on environmental and good-government issues. “One of the ways to deal with it should be a statewide policy to do everything possible for people to buy electric vehicles.

“The current paradigm is really the result of the political fight of the auto dealers … who have a relationship with the unions,” Horner said. “Whatever the politics, science should trump the political infighting.”

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.