A Simple Path to New York’s Electric Vehicle Adoption: Expanding Direct Sales
New York State is a leader in the fight against climate change, passing some of the most ambitious climate targets in the nation. Notably, the 2019 Climate Leadership and Community Protection Act (CLCPA) requires the State to achieve a carbon-free electricity system by 2040 and commits to the goals of 40% reduction in greenhouse gas emissions (GHG) from 1990 levels by 2030, and 85% by 2050.
These bold targets are a victory for New York’s environment, but we need to make key changes across various industries to achieve these goals. Transportation is the largest source – 36% – of GHG emissions in New York, and New York’s climate goals cannot be achieved without a significant and rapid increase in the adoption of electric vehicles. However, a 2014 law only allows electric vehicle makers to sell through independently owned dealerships. Tesla’s five direct dealership locations only exist because they were grandfathered in before the 2014 law was enacted.
After seven years, it’s clear that electric vehicle adoption will only occur if zero emission vehicle (ZEV) producers can sell directly and not solely through the dealership model. In 2020, New York’s 848 franchised dealerships collectively sold 2,500 electric vehicles. By comparison, Tesla alone sold more than 10,000 vehicles that same year which is more than four times the total from all franchised dealers combined. Florida offers no zero emission vehicle incentives for consumers and yet has 68,000 electric vehicles on the road compared to New York’s 45,000. What’s more, Florida has 17 ZEV stores compared to New York’s five. It’s clear that we cannot accomplish wide-scale ZEV adoption relying solely on the dealership model.
We are falling short of ZEV goals and we need to improve access to electric cars right now. In April 2020, New York State announced the goal of having 850,000 ZEVs on the road by 2025 and has only achieved a small percent of that goal. This goal will likely remain unreachable as long as electric vehicle manufacturers are precluded from selling directly to consumers.
As we approach the next legislative session, lawmakers have a unique opportunity to increase ZEV sales by eliminating the direct sales cap on electric vehicle manufacturers. Initial proponents of the cap argued that Tesla would monopolize the electric vehicle market if they were able to sell their vehicles directly, but this argument is now obsolete. New players including, Rivian automotive and Lucid Motors, are entering the market and are viable competitors to Tesla. For example, 20% of Rivian is owned by Amazon and is set to go public. Eliminating the direct sales cap would not only allow Tesla to expand beyond five locations, but it would allow new electric vehicle producers to enter the New York market, thereby expanding New Yorkers’ access to ZEVs across the board.
If New York wants to be a true leader in the fight against climate change, we need to increase the number of ZEVs on the road dramatically. By upholding a direct sales cap on Tesla and prohibiting other ZEV manufacturers from entering the market in favor of an outdated model that caters to conventional vehicles, New York State’s emission goals will never be reached. A 30-year transition to 100% clean transportation and a 40% reduction in GHG emissions demands action now. Many policies that will be proposed in pursuit of that goal will require new state investment, yet this commonsense solution to help reach our climate goals at no cost to the state only requires political will.
Julie Tighe is President of The New York League of Conservation Voters.