New York must remove barriers for consumers who want to purchase electric vehicles

By Rich Schrader | November 27, 2022

In New York, transportation is the largest source of greenhouse gases (GHG), responsible for more than 28% of emissions statewide. The pandemic exacerbated these emissions as an increasing number of previously car-less New Yorkers chose to purchase personal vehicles in 2020 and 2021. As a result, New York City alone saw a nearly 40% increase in motor vehicle registrations, inevitably increasing GHG emissions in the city.

The Hochul Administration has been particularly aggressive in setting goals that reduce GHG emission, including accelerated electric vehicle (EV) adoption. Most recently, the Administration announced their support for mandating all new vehicles sold by 2035 to be 100% zero emission. This is a critical goal to reach.

While establishing these goals is an important step toward EV adoption and ultimately reducing emissions in the transportation sector, there are too many barriers in place for consumers who want to purchase electric vehicles. The State must remove these barriers if we are to meet these ambitious and admirable climate goals.

When it comes to buying a car, today’s consumers are limited in their choices due to an unfair and outdated law that benefits auto dealers over car buyers. In 2014, the State Legislature established a law prohibiting EV manufacturers from selling vehicles directly to consumers, with an exception for five pre-existing Tesla dealerships that had been established prior to the law taking effect. This law was championed by failed Republican Gubernatorial candidate Lee Zeldin. At first, Zeldin wanted to completely stop EV manufacturers from selling directly to consumers instead he settled for the “Zeldin Cap.” The Zeldin Cap on direct sales locations limits access to electric vehicles and forces many consumers to use a middleman to buy an EV. Under the Zeldin Cap,  all five EV facilities that offer direct-to-consumer sales are located in the downstate region, leaving Upstate consumers with no alternative to franchised dealerships.

Further, when a consumer attempts to buy an EV from a traditional dealer, dealers either do not have one available or they are hit with dubious mark-ups and fees.  According to a 2021 survey executed by the Alliance for Clean Energy New York (ACENY), only 16% of traditional auto dealers had an EV available for test drives and only 30% had an EV available for sale.

Markups from traditional auto dealerships are currently higher than ever before. According to Edmunds, 82% of vehicles are now sold above sticker price, up from only 3% last year. Further, The New York Department of Consumer and Worker Protection (DCWP) found that traditional auto dealers committed more than 7,000 violations of consumer protection rules, leading to more than $800,000 in restitution and civil penalties.

The Zeldin Cap does not help New York. It stops competition. It hurts consumers. It will make it less likely that New York hits its environmental goals. Now that Governor Hochul beat Zeldin at the ballot box, it is time to beat back the unfair and outdated Zeldin Cap.

Allowing electric vehicle manufacturers to sell directly to consumers eliminates many of the opportunities traditional dealers have to swindle consumers with higher fees, markups and increased financing costs. Direct Sales creates a comparable experience to buying electronics or furniture—everyone knows the price, and everyone pays the same amount. Direct Sales means full transparency for the consumer and a buying experience without haggling, negotiation or bait-and-switch tactics.

The data could not be clearer that the direct sales model is the key to EV adoption and consumer choice. EV adoption rates are five times higher in states fully open to Direct Sales versus closed states. Approximately two-thirds of EVs currently on the road in the US were sold through direct sales. Meanwhile, in states like California, where Direct Sales locations are not restricted, EVs are about 18% of new vehicle sales. In New York, only 3% of new vehicle sales are zero emission.

Establishing goals to reach is an important part of New York’s climate agenda. As a state, we are leading the nation in setting targets for renewable energy development, conservation and, yes, electric vehicle adoption. However, in order to be successful in reaching those goals, we must take action and eliminate outdated laws that were established by climate change deniers. We urge Governor Hochul and all legislative leaders to pass the Direct Sales bill (S1763/A4614)!

Rich Schrader is the New York Legislative and Policy Director for the Natural Resources Defense Council