Elon Musk’s Bad Rep Among Dems Threatens Ev Sales Push In Statehouses

ALBANY, New York — Elon Musk is taking Washington by storm, but in statehouses controlled by Democrats on both coasts, his lobbyists are facing a frigid welcome.

Tesla’s ability to sell electric vehicles directly to consumers remains restricted in several states where the deeply entrenched franchise dealership model prevails. Musk’s company has lobbied to be allowed to set up its own sales locations in those states over the last few years — with only limited success.

In the past, blue state Democrats and environmental groups pushed for allowing Tesla and other electric vehicle makers to set up shop rather than requiring customers to buy online. They saw it as a no-cost measure to support higher EV sales and slash transportation emissions.

But Musk’s growing political clout and alignment with Republican President Donald Trump is making that a harder sell.

“You could not pay me to carry that bill now,” said New York state Sen. Pat Fahy, a Democrat from the Albany area who for several years sponsored legislation to allow direct sales. “I’m thoroughly disgusted with Elon Musk and everything he stands for.”

Musk, the world’s richest man, has become a political lightning rod as he’s spearheaded cuts to the federal workforce at a breakneck speed. While his leadership at Tesla has drawn criticism in the past, the cars were still exceedingly popular and a virtue signal for the environmentally conscious crowd. That’s no longer the case for many Tesla owners, though.

Musk funded Trump’s reelection campaign and was tasked by the president to lead the Department of Government Efficiency to slash government spending. He’s pushed for DOGE employees to gain unprecedented access to government information, spurring legal challenges. Musk is also the face of mass firings of probationary federal workers — some of which had to be reversed — and has recently ordered all employees to justify their jobs or lose them, making DOGE a rallying cry for many Democrats.

New York currently allows Tesla to have five sales locations in the state — all in the New York City area — under a deal struck more than a decade ago. Other EV companies like Lucid and Rivian are blocked from selling their cars directly to consumers at in-person locations.

Altogether, more than 25 states restrict direct, in-person sales by electric vehicle makers in some way, according to the Electrification Coalition, a nonprofit promoting EV adoption. Allowing direct sales has been a tough political battle even without Musk’s growing profile: Auto dealerships with deep community ties and deep pockets remain tethered to the franchise model and are staunchly opposed to direct sales across the country.

Legacy car manufacturers sell their vehicles through franchised dealerships. The laws governing this relationship vary by state and generally provide strong protections for car dealers. The sometimes unhappy marriage between dealers and manufacturers has faced particular tensions as traditional automakers have expressed frustrations over the pace of EV sales and dealers have pushed back on requirements to install EV chargers.

In what would be a significant departure from franchises, Tesla and other EV-only makers want to fully control the sales process, allowing them to set uniform prices and standardize customer service. But in several states, franchise laws prevent them from setting up a physical location to sell directly to customers.

So Tesla has pushed “direct sales” legislation to set up shop in states where they’re not allowed, while dealers have sought to restrict Tesla’s operations and prohibit other automakers from selling directly to consumers.

Auto dealers argue EV makers could sell under the existing rules but simply choose not to. Dealers say they provide price competition and are active in local communities. Changing the law to benefit big corporations is unfair, they say.

In Illinois, dealers are pushing a bill to restrict EV manufacturers from setting up stores after they lost a court battle against Lucid and Rivian. Tesla is allowed to sell at 13 locations there under a deal reached in 2013.

Tesla’s business model of bypassing dealerships and setting up company-owned physical locations for people to test drive and buy vehicles was grandfathered-in in Washington state, allowing it to sell at its locations while shutting out rivals. This year, one Democratic lawmaker introduced a bill to repeal the allowance for Tesla.

Washington state Sen. Rebecca Saldaña, a Democrat from the Seattle area who chairs the chamber’s Labor and Commerce Committee, said she wants to push forward the conversation about how to boost EV sales.

“People don’t think it’s fair that this one company has this and no one else does,” she said. “Because of his high profile, my ban bill [to remove Tesla’s exemption] I think got a lot more support than I thought.”

Saldaña is also sponsoring legislation to lift the restriction on direct sales for EV manufacturers more broadly to allow companies like Rivian and Lucid to have the same rights as Tesla. She said she introduced that bill because the lawmaker who was going to sponsor it left the Legislature and she wanted to have both proposals to spur discussion.

Neither bill is expected to move forward this year amid opposition from auto dealers.

Washington Rep. Beth Doglio, who’s sponsoring the bill to allow other EV companies to pursue direct sales in the other chamber, praised auto dealers who “do a lot of great work in communities.”

“This bill that I’ve introduced has some protections that the auto dealers have been asking for,” she added. “It does not allow manufacturers [they work with now] to go out and do direct sales and bypass the auto dealers.”

Connecticut prohibits the direct sales model as well. Democratic lawmakers there have pushed to change that for years with environmental groups prioritizing the bill until recently.

This year that legislation has only been introduced in one chamber — by a Republican sponsor in the Democratic-controlled Legislature. Democratic lawmakers said Musk’s reputation has demolished any chance of changing the law — although opposition from auto dealers remains a larger factor.

“The role that Elon Musk has been taking at the federal level, just ransacking and destroying federal agencies, doing so in a manner where he is rife with conflicts of interest, I think highlights why it’s important to have consumer protection laws to apply to everyone in the market and not to create exceptions for a single company,” said Connecticut state Rep. Matt Blumenthal, a Democrat who has opposed allowing direct sales in previous years.

Even supporters of allowing EV makers to sell directly acknowledged Musk’s actions in D.C. have made it even more unlikely to move any legislation this year.

“It just makes it that much more difficult, particularly in a blue state like Connecticut,” said state Sen. Christine Cohen, a Democrat.

Cohen said there’s been discussion of how to make the bill a “boutique only” measure, to allow smaller EV manufacturers to set up shop while excluding Tesla.

Tesla has also pursued locations on tribal lands. The company opened a location at the Mohegan Sun resort in Connecticut and announced plans for its first in upstate New York on Oneida Indian Nation land in 2023.

Tesla remains the dominant electric vehicle maker in the United States, accounting for just under half of 1.3 million EVs sold in the U.S. in 2024, according to Cox Automotive. But its sales have declined even as total EV sales increased by 8 percent from 2023.

Volkswagen-backed Scout Motors, a newcomer to the EV market, is also pursuing direct sales. The company, which is building its cars at a Blythewood, South Carolina, factory, is pushing legislation in the statehouse to that end.

Scout’s market research indicates customers will prefer a direct-sales model, and the approach will give the company more control over pricing, the service experience and data produced by their cars, said Cody Thacker, Scout’s vice president of commercial operations. Scout expects to begin delivering vehicles in 2027.

“If you do all those things well, then there, in the end, is an opportunity for much greater financial returns with the direct model,” he said.

Tesla and other EV makers also backed the measure, but opposition from traditional dealers has halted movement on the bill.

“The community has sacrificed a lot so I think it makes sense for those residents to have the opportunity to purchase a Scout, given the plant is in our backyard,” said South Carolina state Rep. Kambrell Garvin, a Democrat who represents the communities near the Scout factory. “South Carolina is a ruby red state, … so there wouldn’t be as much anti-Elon Musk sentiment as there would be in a place like New York,” he added. “The General Assembly is trying to balance being business friendly to international companies while not doing harm to local dealerships.”

Musk’s popularity in Republican circles may ultimately be a boon to EV makers pushing direct sales in “ruby red” states like South Carolina. In fact, most of the states that prohibit direct sales are Republican-controlled, including a large swath in the middle of the country.

“Entrepreneurs and job creators like Elon Musk have shown how important it is to break free from outdated and excessive regulations,” said Eaddy Roe Willard, an official with the Richland County Republican Party, during a hearing on South Carolina’s direct sales bill. “His leadership at the Department of Government Efficiency, or DOGE, exemplifies the kind of innovation that flourishes when government streamlines its processes.”

Scout plans to pursue direct sales in California as well, but Volkswagen dealers there have threatened to sue. Dealers in Florida have filed a lawsuit challenging Scout’s acceptance of deposits from customers, alleging because of Volkswagen’s stake and existing relationships with dealers the company is violating state law.

Thacker said Scout is an independent U.S. company and that Volkswagen AG, the publicly traded German company, is the sole shareholder. There’s no relationship between Scout and the Volkswagen Group of America, which sells through dealerships in the U.S., he said.

The company plans to set up locations to sell directly to consumers in states where that’s allowed and sell into other states using those dealer licenses, Thacker said.

Unlike South Carolina, New York, Washington and Connecticut all have aggressive state environmental goals and policies aimed at boosting the electrification of the transportation sector.

New York and Washington are among 11 states that have adopted regulations aligned with California’s EV sales rules, which are aimed at eventually phasing out the sale of new gas cars by 2035. The Trump administration and Republicans in Congress want to repeal those rules and are moving to nullify approvals in the Biden administration, which will most likely result in a pitched legal battle.

New York would need at least 2 million electric vehicles on the road to come close to its 2030 climate law target of cutting emissions 40 percent compared to 1990 levels. At the end of 2024, the state had just over 270,000 registered EVs, according to its own data.

Although the overall emissions target looks increasingly out of reach as New York Gov. Kathy Hochul delays action, environmental advocates are still pushing forward and supporting direct EV sales.

“It’s very clear that we have a problem, and that we are not on track to meeting our goal,” on EVs, said Julie Tighe, president of the New York League of Conservation Voters. “It’s not about any one particular company. It’s about the opportunity to sell more EVs.”

Lucid and Rivian joined forces with Tesla in 2021 to push aggressively for direct sales before running into the buzzsaw of opposition by auto dealers and unions. Tesla is the only one of those companies registered to lobby in New York in 2025.

Direct sales legislation has some bipartisan support. New York state Sen. Mark Walczyk, a Republican, said he supports allowing Tesla and other companies to sell EVs however they want as a “free market guy.”

“Deciding whether someone’s business model functions well in your state with the mandates you’ve given … based on one person’s personality I don’t think is a good way to make public policy,” Walczyk said of Democrats dropping their support due to the association with Musk.

Rivian and Tesla did not respond to a request for comment.

A bill allowing direct sales hasn’t been introduced yet by New York state Sen. Pete Harckham, a Democrat from Westchester County and chair of the Environmental Conservation Committee. Harckham has previously advocated for the measure and said he plans to introduce some version after the state finalizes its budget this year.

“We plan to do something on direct sales. We have to get our transportation sector moving,” Harckham said.

Harckham was circumspect when asked if Musk’s alignment with Trump would hurt that effort.

“I don’t think it helps,” he said. “We don’t operate in a vacuum.”