New York mulls shutting Tesla dealerships over Musk ties

ALBANY, N.Y. >> In her 12 years in the state Capitol, Sen. Patricia Fahy has consistently supported the carmaker Tesla’s complicated fight to open dealerships in New York, framing her position as a way of advancing the state’s green energy transition.

Things have changed.

After President Donald Trump’s victory last fall, and the polarizing work by billionaire Elon Musk, Tesla’s CEO, to lead the Department of Government Efficiency, Fahy is no longer on Tesla’s side.

Fahy, a Democrat whose district includes the state’s capital of Albany, and other state lawmakers are pushing to revoke a legislative waiver that has let Tesla directly operate five New York dealerships rather than sell cars through dealer franchises, as other carmakers must do.

Her fight with the company has extended beyond the Capitol, with Fahy participating in demonstrations against a planned Tesla dealership just outside her district, in Colonie, New York.

“Maybe I’m making amends,” Fahy replied when asked about her previous support for Tesla. Musk, she said, is “part of an administration that is killing all the grant funding for electric vehicle infrastructure, killing wind energy, killing anything that might address climate change. Why should we give them a monopoly?”

Her turnabout reflects the growing sense of outrage that has touched off a nationwide protest movement against Trump and Musk, resulting in the defacing of Teslas and arrests during protests at the company’s factories and showrooms.

Lawmakers, mostly powerless to counteract Trump administration policies, have found that targeting Tesla and Musk can be more effective.

In New York, Democratic legislators are calling for a comprehensive audit of a deal that gave Musk’s company nearly $1 billion in benefits to operate a plant near Buffalo under a $1-a-year lease. A bill to authorize the audit would give the state government a path to claw back the subsidies. Local and state officials also want state and city pension funds to divest any Tesla investments they have.

The aggressive anti-Tesla stance is a stark departure from the way many Democratic officials viewed the company a decade ago as they sought to shed the nation’s reliance on fossil fuels.

In 2014, the state passed a law banning carmakers from selling cars directly to consumers. Trade groups representing auto dealer franchises supported the law, which included an exemption for Tesla that allowed it to keep the five stores it had already opened in New York.

Seven years later, Fahy sponsored legislation to lift the cap on licenses available to makers of electric vehicles that wanted to sell directly to consumers. Supporters of the bill, which did not pass, argued that it would help New York reach its goal of having 850,000 electric vehicles on the road by the end of 2025. (There are currently fewer than half of that.)

Fahy now views Tesla’s waiver as an unfair advantage, and wants the company to forfeit its five licenses by 2026. Under her plan, the licenses could be redistributed to rival electric-vehicle manufacturers such as Rivian, Lucid and Volkswagen affiliate Scout Motors, which also employ a direct-to-consumer sales approach.

The bill has been referred to the Senate and Assembly finance committees. Mike Murphy, a spokesperson for the Senate Democrats, said the conference would not consider the proposal until after lawmakers had reached a budget agreement.

Avi Small, a spokesperson for the state’s Democratic governor, Kathy Hochul, said Hochul would review the bill if it passed the Legislature’s two chambers, both of which Democrats control.

State Sen. Jacob Ashby, a Republican who represents Colonie, said that Fahy’s bill was misguided because “government should not be picking winners and losers on this.”

“Political disdain seems to be more at play,” he said. “We are not recognizing the power and implications of the process that we have and that we should trust it.”

About 30 states allow some form of direct sales of electric vehicles, with about one-third limiting the practice to Tesla, according to the Electrification Coalition, a Washington nonprofit that promotes the use of electric vehicles.

Tesla’s ability to sell cars directly is also being challenged in other states, including Washington, where two bills — one to allow makers of electric vehicles other than Tesla to sell directly and another banning Tesla’s carve-out — failed.

State legislatures in Florida, Colorado, Illinois, South Carolina and Rhode Island have also considered bills this year related to the direct-to-consumer sales debate.

“It would be great to have an open market that allows for new companies coming into the mix,” said Ben Prochazka, executive director of the Electrification Coalition.

Tesla, which also sells its cars online, has supplemented its five New York dealerships with a network of showrooms where consumers can view current models and consult staff members but not buy vehicles directly, a marketing approach the company uses in other states with direct-sales restrictions.

Tesla did not respond to requests for comment. Musk, in a social media post that he later deleted, criticized New York’s efforts against the carmaker, writing that it was “improper for lawmakers to target a single person or company.” (He said last week that he planned to spend less time in Washington, D.C., as Tesla announced that its profits had dropped 71%.)

Fahy’s battle against Tesla has extended to long-standing plans for the construction of a new Tesla facility in Colonie, just 20 miles from the state Capitol. She added some local star power to a 100-person protest at the proposed site this month.

The same day that Fahy took part in the protest, others who opposed Tesla swarmed a Colonie Planning Board meeting, maligning Musk and condemning what one speaker called his “reckless disregard for the Constitution.”

”This is not a political rally,” Matthew Millea, the board’s lawyer, told the audience. “This is a Planning Board meeting for a local project. If your comments are not directed toward the updated renderings, I would ask you to refrain from commenting.”

Carol Okun, a 67-year-old psychotherapist, said she had never been to a Colonie Planning Board meeting but had decided to attend this one to channel her rage toward Trump and Musk into something affecting her community.

“With all the bad things Elon is doing, you have got to be kidding me,” she said. “That’s what forced me to go.”

Tesla has not indicated publicly whether it plans to put a showroom or a dealership at the proposed Colonie site, although documents submitted to the Planning Board refer to the location as “an electronic automobile sales/repair/service center.”

Since winning its direct-sales exemption, Tesla has moved the locations of some its dealerships, raising the possibility that one could be transferred to Colonie.

Fahy and two Democratic colleagues in the state Assembly, Phil Steck and Gabriella Romero, have sent letters to town officials warning that opening another Tesla dealership could violate state law.

Peter Crummey, Colonie town supervisor, said in an interview that development in the town was welcome and “though political sentiments appear to have recently changed for some folks about Tesla’s founder, people should let the Planning Board do their work.”

“As to requests from various state legislators inserting themselves into the Tesla world?” Crummey, a Republican, added. “I am confident we will give them the weight it deserves.”

This article originally appeared in The New York Times.

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