Tesla Hopes To Remove Five Store Limit In New York State



Tesla’s Former Roosevelt Field Boutique In Garden City, New York, on Long Island

Though Tesla’s New York agreement only allows for five stores, the electric automaker hopes to expand upstate.


An Aerial view of the giant Tesla (SolarCity) plant at RiverBend in South Buffalo, New York (Image Credit: flickr via Kavanagh Family)

Back in 2014, Tesla butted heads with the New York state legislature concerning the automaker’s right to own its own “dealerships” in the state and sell its cars directly. This was due to combatants from independent franchised dealers. An agreement was made in the automaker’s favor, allowing the company to own and operate five stores in the New York City and Long Island areas.

Tesla hopes that now it will be able to extend the agreement and expand its efforts into upstate New York. Joe Morelle, Assembly Democratic Majority Speaker from Rochester, introduced a bill to bump Tesla’s store allowance in the state from five to 20. The bill still needs a Senate sponsor, but if it passes, the electric automaker will look to establish five new stores in upstate New York; namely Syracuse, Rochester, Buffalo, Hudson Valley, and Capitol Region.

Franchised dealership owners in the state believed that Tesla’s stores would result in job losses among traditional dealerships. Dealers argued that the traditional system of having independently owned and operated businesses selling cars creates healthy price competition.  Tesla’s Vice President of Business Development, Diarmuid O’Connell, said that the five stores have not created any job losses. Of the former agreement, he shared:

“What happened three years ago was an unnatural constraint on our ability to grow.”

The Silicon Valley automaker is pursuing this expansion now as the upcoming Model 3 is about to move to production status. Added to this, Tesla (SolarCity) is in the midst of finalizing a substantial solar panel factory in Buffalo, New York, which has been supported by state Governor Andrew Cuomo and subsidized by the state. Cuomo has coined Tesla’s solar project as the “Buffalo Billion” initiative, and he believes that it can restore New York’s western economy. It is set to being production this summer.

In regards to whether or not Tesla was working the Buffalo project in hopes to get an approval for an increase in automotive stores, O’Connell admitted:

”We’re not exploring trade-offs per se but if we are going to be successful in New York it’s going to be driven to a large degree by how well we can penetrate the market.”

Source: TimesUnion

Categories: Tesla

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8 Comments on "Tesla Hopes To Remove Five Store Limit In New York State"

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Intended meaning of this law from NY legislature: “Heaven forbid that a US car company to succeed. That’s why we have to limit Tesla to only 5 stores. We hate the USA.”

I sincerely hope Tesla wins the right for ALL automakers to sell direct in federal court.

(⌐■_■) Trollnonymous

Corrupt politicians purchased by NADA.

Solution, do not buy a car from Stealerships, especially those in the below list…

No need to help kepp funding those corrupt organizations. Money talks when you take it and walk….

Just to note, the store in the photograph (Roosevelt Field) closed over a year ago. The store in Syosset, NY (also on LI) closed as well (service center and supercharger remain); the only store left on LI is in Manhasset.

Company gets special carve out. Isn’t happy and wants more.

They shouldn’t have gotta the special treatment they got already. NYS should either allow all makes to do this or none of them.

WOW is this an bass-ackward way of looking at the situation! It’s the dealership franchises which are getting special treatment here, protectionism provided by State Law, not Tesla! Tesla has restrictions on its ability to sell cars in New York State… the very antithesis of “special treatment”!

The dealers are following the saw which applies to everyone. No special carve outs for one company. Every car maker has restrictions on their ability to sell direct in NYS. But Tesla has an exemption just for them.

This isn’t fair to other makes who Tesla has to compete with. NYS should treat them all the same. Open it up to all of them or none of them.

If prohibiting direct sales is outmoded, remove the prohibition for all companies. Just a few years back Chrysler was forced to close a company-owned store in NYS. To do that to Chrysler and not Tesla is unjust.

unlucky said:

“The dealers are following the saw [law?] which applies to everyone.”

Of course that New York State law doesn’t apply to “everyone”; it applies only to certain businesses within the State. I dunno what the letter of the New York law is, but the original intent of the various State laws protecting auto dealer franchises — the reason those laws are on the books — is to shield those franchises from predatory business practices used in the past by auto manufacturers against their dealers dealers; predatory practices used to make up for revenue losses during economic downturns.

Since Tesla has no franchise dealers, none of these dealer protection laws should apply to Tesla. Not a single one.

Tell us, Unlucky, do you work for a legacy auto maker or legacy auto dealership? Is that why you are advocating a position here so contrary to advancing the cause of selling more EVs?