Everyone Benefits from a Fair and Open EV Market- Including Car Dealers

By Deb Peck Kelleher

ACE NY is part of a broad coalition of environmental groups working to improve electric vehicle (EV) access to create a fair and open EV market in New York. As the state pushes towards its goal of phasing out sales of new internal combustion vehicles by 2035, one of the most important considerations is making sure New Yorkers can learn about, test drive, and buy electric vehicles in their home state by as many methods as possible.

Vehicle and transportation technology is evolving rapidly, and we need all parties—utilities, automakers, dealers, and consumers—to work together to drive a successful transition to a zero emission future. It also means understanding the bottlenecks that are standing between drivers and clean vehicles and being open-minded about solutions.

We applaud all New York is doing to encourage EV adoption, from adopting Zero Emission Vehicle (ZEV) goals to offering purchase incentives to supporting robust charging infrastructure state-wide. But sales data shows that we still have work to do to catch up to other states on EV sales. According to data reported in The Atlantic, Florida’s EV sales are 60% higher than New York’s, and part of it is because traditional distribution methods haven’t caught up to the EV revolution.

ACE NY conducted a 2021 survey of New York auto dealerships, which revealed that only 16% had an EV available for test drives and only 30% had an EV available for sale.

This aligns with national data from the Sierra Club, which found that 74% of car dealerships do not have an EV available for sale on their lot, and even when they did, they often provided inaccurate information about pricing, tax credits, or charging.

This situation is compounded by a lack of availability of many popular EV models that have enabled dealerships to add significant retail markups above MSRP. There are reports of Ford dealerships telling customers they will have to pay up to $30,000 in addition to the cost of the vehicle to secure a Ford F-150 lightning!

Turning to the current debate in New York, the state’s dealership associations have argued that they are the key to bringing electric vehicles to the state, and that opening up New York’s EV market to direct sales by EV manufacturers would hurt their employments and livelihood.

This argument does not hold up to scrutiny. In fact, data from the National Automobile Dealers Association reveals the opposite. In states where franchised dealerships have coexisted with manufacturer-to-consumer sales, dealerships profits and employment rates have exceeded the national average. Let’s take a look:

As we can see, dealerships have thrived nationwide, with a 52% increase in sales and an 18% increase in employment. If there was a negative impact to the dealership busines model from direct sales, we should be able to tell based on lower sales and employment numbers in open vs. closed states, but this is not the case. Instead, we can see that open states have beat the national average with 58% sales growth and 21% employment growth.

Furthermore, we see that closed states have strongly underperformed the national average, with sales growth at 29% and employment growth at 12%.

New York is right in line with other open states, showing 59% sales growth and 22% employment growth.

It is also important to think about New York’s consumers, who should have the right to test drive and learn about EVs in their home state. Survey data from the research publication Morning Consult has found that 93% of adults interested in buying an EV feel it is important to experience a test-drive before making a purchase decision. Furthermore, a study by Cox Automotive showed that only a third of consumers are “very satisfied” with the current dealership model, demonstrating an opportunity and need for improvements—7 out of 10 would prefer a “brand experience center” without a high-pressure sales environment.

Consumers are ready. There’s no harm to existing dealerships. And New York’s EV goals hang in the balance. It’s past time to bring EV freedom to New York and pass S.1763/A.4614 for the climate and for New York consumers.