Tesla Direct sales model threatened in New York

Tesla is facing a significant setback in New York. A new bill, driven by Senator Patricia Fahy and Assemblywoman Gabriella Romero, could ban Tesla from the stationary EV market by mid-2026 by revoking its direct sales permits.

Bill and Background

The proposed bill aims to displace Tesla from its five existing sales locations in New York. These locations were approved in 2014 as part of a compromise and have since given Tesla a dominant advantage in direct sales. Critics argue that this exclusivity limits consumer choice and stifles competition. Consequently, the permits are to be granted to other manufacturers of emission-free vehicles, such as Rivian and Lucid, in the future.

Senator Fahy justified the change with Tesla's political influence, particularly in connection with Elon Musk's ties to US President Trump and his Department of Government Efficiency (DOGE). "No matter what we do, we’ve got to take this from Elon Musk," she explained – a statement that underscores the political pressure.

Discussion on the Direct Sales Model

Tesla revolutionized the car market with its direct sales model, which eliminated traditional dealers and helped the company become the leading EV seller in New York and the USA. However, while Tesla benefited from this model, opponents see it as a barrier for new competitors. Assemblymember Bobby Carroll is even working on his own bill to completely ban the direct sale of electric vehicles to strengthen franchise protection for small businesses.

Outlook and Consequences

Should the bill pass, Tesla would be forced to give up its direct sales locations in New York – a move that could revive competition in the EV market. While Tesla continues to be considered a pioneer in direct sales, it remains to be seen how this regulatory change will affect the market and the positioning of other manufacturers.