New York’s new auto industry – manufacturers and your local dealership – are all at the forefront of electric vehicles.
Consumer Interest in Electric Vehicles Has Grown Exponentially since 2018. This has only accelerated as gasoline prices reached records and federal and state governments have issued new mandates to reduce the significant greenhouse gas emissions generated by fossil fuel vehicles. New York alone has set an ambitious goal of putting three million electric vehicles on the roads by 2030 to fight climate change.
Each manufacturer has responded by launching or announcing the imminent availability of new electric vehicle models – including popular options like pickup trucks and SUVs – and dealers are eager to add to the roughly three dozen models currently available on batches. throughout the state.
Unfortunately, a few companies are taking advantage of this moment to request special treatment from Albany. They want to circumvent New York’s franchise law in favor of a direct-to-consumer model. Their goal is to maximize profits on the backs of New York vehicle owners. Worse, this more expensive approach will not generate enough sales to meet our clean energy goals or growing buyer demand.
Tesla has regularly struggled with delivery delays and recently said so should delay previously announced new models in 2022. Lucid Group has reduced its production forecasts up to 40% this year. Rivian has been consistently unable track vehicle orders, and its performance on Wall Street continued to decline with news of missed sales targets, a surprise price increase and extreme supply chain issues.
While all automakers have been impacted to some degree by supply chain difficulties, franchise car dealerships are putting electric vehicles on sale as soon as they receive them from the automaker. New York dealerships plan to have 70 new EV models available by the end of 2022 and 150 by the end of next year.
Once they’re on the dealer lot, any interested potential buyer can come and inspect these new EVs first-hand – even take one for a test drive, which 80% of all new-car buyers say they want. do before buying, a 2019 survey found. This is not the case with the direct-to-consumer model, which requires customers to pre-schedule test drives and also pre-order their cars, often waiting months for delivery.
And after that extended delay, buyers who go direct may have trouble getting service or parts for their new EV. Community franchise dealers must, as part of their relationship with manufacturers, provide vehicle service to customers – on-site – offer clear and concise information on charges and estimates, and make a loaner vehicle available if repairs cannot be made immediately.
New York’s franchise law was established to protect consumers from the vagaries of a vertically integrated model in which one company controls the entire supply chain, from manufacturing to sales to service. Dealerships play a vital role in consumer protection, fighting to ensure buyers are getting what they pay for, especially in the face of warranty and safety recalls.
Dismantling this model only to meet the needs of a small subset of businesses simply because the existing laws don’t fit their business model isn’t efficient or fair, and it’s certainly not consumer-friendly. And giving that kind of special treatment to a company that has already received nearly $1 billion in tax relief and other incentives for a solar plant in Buffalo that has so far failed to deliver should give lawmakers pause.
As New York continues to grappling with its post-pandemic economic recovery, it’s critical that the state make smart, sustainable policy decisions that support local jobs—many of them unionized—and protect consumers while protecting the environment.
The direct-to-consumer electric vehicle model threatens local jobs, won’t help New York meet its clean energy goals, and has proven to be non-consumer friendly in a short period of time, according to a recent JD Power investigative report. Any effort to expand it should be firmly rejected.
Mark Schienberg is president and CEO of the Greater New York Auto Dealers Association.