New York legislators are targeting Tesla with new laws that could revoke Tesla's direct sales permits and threaten government contracts.

An Upstate New York lawmaker is proposing legislation that would end Tesla's in-person sales operations in New York. Demonstrators are arrested by NYPD officers during a protest against Elon Musk and Tesla outside a Tesla showroom, Saturday, March 1, 2025 in New York. (Adam Gray | AP Photo) Adam Gray | AP Photo

Democratic lawmakers want to remove direct-sales freedoms given to Tesla in 2014 and offer them to other EV brands

Tesla revealed a 13 percent drop in sales this quarter, which coincides with backlash toward CEO Elon Musk's involvement in the federal government.

New York legislators scrutinize Tesla's factory performance and consider laws impacting its sales and state contracts.

It would be the only Tesla electric vehicle sales outlet in Upstate New York and operate according to the company’s direct manufacturer-to-consumer model. Although New York state law requires vehicles to be sold through dealerships, the site on Oneida territory is not subject to that restriction.

Tesla sales fell 13% in the first three months of the year, another sign that Elon Musk’s once high-flying car company is struggling to attract buyers. The leading electric vehicle maker has faced a growing backlash from Musk’s embrace of right-wing politics and his role in the Trump administration.

The Tesla CEO acknowledged his DOGE activities are impacting the electric vehicle maker's stock price amid boycotts and protests.