According to Cailian News on April 29, Tesla's troubles did not end after Musk announced his withdrawal from the Department of U.S. Government Efficiency (DOGE). This week, lawmakers in New York State are planning to cancel Tesla's direct sales rights in the state, which will close several Tesla stores in the state.

Several states in the United States have bans requiring automakers not to sell electric vehicles directly to the public, but must go through third-party dealers, aimed at protecting traditional dealers from unfair competition. However, Tesla previously obtained an exemption from this ban in New York State, bypassing dealers and directly setting up several stores in New York State.

Recently, state Senator Patricia Fahy and other lawmakers proposed a bill to apply for the cancellation of Tesla's exemption license. If the bill is passed, Tesla will have to sell cars through traditional dealer franchises like other automakers.

Patricia Fahy regretted that the government supported by Musk is now trying to cancel all electric vehicle infrastructure grants, stifle wind power, and stifle all policies that may have an impact on climate change. She can no longer support Tesla's privileges.

New York State is one of the few areas in the United States that is friendly to electric vehicles. Half of the more than 172,000 pure electric vehicles currently registered in New York State are from Tesla. Tesla is also the only electric vehicle company in the state that has obtained direct sales qualifications bypassing dealers, but Fahy said that she is increasingly unable to tolerate Tesla's monopoly.

New blow

Both the legislature and the executive branch of New York State are controlled by the Democratic Party, which is also the political premise for the state to support electric vehicles. Now, New York State is considering introducing more competition.

Fahy pointed out that Tesla's exemption is indeed an unfair advantage, and Tesla's direct sales license should be revoked. But at the same time, she believes that it is also okay to allocate these licenses to other electric vehicle manufacturers, such as Rivian, Lucid, etc.

If Tesla is disqualified from direct sales, it may have to go to stores outside New York State for car deliveries. This is definitely not a good scenario for Musk and Tesla.

As Tesla has been trying to develop its self-driving system, the company has placed great emphasis on maintaining direct contact with customers, as only in this way can it build a rich digital archive to continuously improve its self-driving technology.

In addition, due to climate restrictions, battery-powered electric vehicles have not been selling well in the northern United States, so New York State in the northeast is seen as a key market for Tesla.

If Tesla is finally forced to close all its stores in New York State, its sales expectations may decline further and weaken its competitiveness. Last week, Tesla announced its first-quarter results, with an operating profit margin of 2.1%, the lowest level since the second quarter of 2019; the profitability of its core automotive business fell to the lowest level since Tesla's market value exceeded one trillion US dollars.