New York State Wants To Divest From Everything Tesla

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Last Updated on: 28th April 2025, 03:43 pm

They are lawmakers who originally stood behind Tesla’s request to sell directly in the state to consumers. It was part of a larger picture in which New York would meet its state’s net zero green energy transition goals.

Then CEO Elon Musk inserted himself into the Trump 2.0 regime as head of the Department of Government Efficiency (DOGE). Slashing federal grants to vast areas that included climate and clean energy funding created a sour taste in the lawmakers’ mouths.

Now a number of New York state policy gurus have changed course. According to Benjamin Oreskes of the New York Times, they are pushing to revoke a legislative waiver that has let Tesla directly operate five New York dealerships rather than sell cars through dealer franchises, as other carmakers must do.

And the disgust with Musk and everything Tesla doesn’t stop there. New York legislators are looking into other areas of Musk’s influence in the state and deciding whether it might be timely and fiscally prudent to divest in everything Tesla.

Senator Patricia Fahy described Musk as “part of an administration that is killing all the grant funding for electric vehicle (EV) infrastructure, killing wind energy, killing anything that might address climate change. Why should we give them a monopoly?”

Straight-to-consumers EV sales: The five New York licenses that allow Tesla to sell directly to consumers expire by 2026. Fahy has proposed a redistribution to other EV manufacturers like Rivian, Lucid, and Scout Motors.

A 2022 Electrification Coalition analysis estimated that, by enabling manufacturers to sell EVs directly to consumers, EV adoption would increase by as much as 13% between 2023 and 2030. The goal was to accelerate the US transition towards electric transportation and away from a reliance on oil that “leaves us vulnerable to the national and economic security risks associated with our dependence on oil.” Of the 30 states that have given the nod to direct sales of electric vehicles, about a third limit the practice to Tesla.

Buffalo battery plant: Among other potential areas of inquiry in New York is a comprehensive audit of the Tesla battery plant agreement in greater Buffalo. The deal included nearly $1 billion in benefits and a $1-a-year lease. Subsidies could be revisited if the audit is approved. “It is the height of hypocrisy that Elon Musk, the man who is dismantling federal agencies and doing enormous damage on the basis of wildly unsubstantiated claims of waste, fraud, and abuse is the beneficiary of one of the biggest, shadiest subsidy deals of all time,” two lawmakers, Senator Brad Hoylman-Sigal and Assemblyman Micah Lasher, said in a statement.

Another Tesla center? Not so fast: Well-established plans for the construction of a new Tesla facility in Colonie, New York, just 20 miles from Albany, have also been targeted for review. A Colonie Planning Board meeting was inundated by people who need to express their anger over the way Trump and Musk have compromised US democracy and the federal infrastructure that benefits all US citizens, regardless of political affiliation. Documents submitted to the Planning Board refer to the location as “an electronic automobile sales/repair/service center.”

Don’t mess with my retirement, Elon! Local and state officials also want to see state and city pension funds divest any Tesla investments they hold.

Justin Brannan, a Democratic City Council member who’s running for city comptroller, has vowed, if elected, to lead an effort to have the city pensions divest completely from Tesla holdings worth an estimated $1.2 billion. “Elon Musk is coming for us,” Brannan told Gothamist in an interview. “Why should we be investing retirees’ hard-earned pension funds in a guy who’s already shown that he’s got New York City in the crosshairs?”’

In March, more than 20 Senate legislators sent a letter to New York State Comptroller Thomas DiNapoli, urging him to begin the process of divesting Tesla shares directly owned by the New York State pension fund. The New York State Retirement Fund is overseen by the New York State Comptroller, who retains sole fiduciary responsibility; and is one of the largest public pension funds in the United States, providing retirement security for over one million New York State and Local Retirement System (NYSLRS) members, retirees and beneficiaries. It has consistently been ranked as one of the best-managed and best-funded plans in the nation.

The advocacy group, Action Network circulated an online petition that appealed to New York State Comptroller Thomas DiNapoli to divest New York State’s pension fund of Tesla stock.

“New York State’s pension fund owns approximately 3.5 million shares of Tesla stock. Tesla constitutes the seventh-largest share of our state pension fund’s holdings. New Yorkers do not wish to see our public funds invested in the man leading an unconstitutional and devastating takeover of the government; nor do we wish to see our hard-earned retirement savings hurt by financially toxic Tesla stock.”

The petition exceeded its goal of 5000 signatures.

As If Musk’s Mercurial Nature Wasn’t Bad Enough…

The owner of the social media site, X, Musk has promoted the narrative that X is the only real media source for freedom of speech — truth and accountability are secondary to giving voice to extremists. Musk wielded X to promote 2024 campaign misinformation. Post-election polling by the Center for Countering Digital Hate showed that X users were the most confident that Trump’s second term would be a huge success.

Since then Musk has clashed with other Trump advisers. His promises go unfulfilled while Tesla’s competitors ramp up production and sales of their own EVs. During an investors call last week, he stated that his time allocation to DOGE “will drop significantly” in May. That’s because Tesla’s profitability is plummeting — the company posted a 71% decline in net income, earning just $409 million, far below Wall Street’s expectations. The earnings added to the heap of other Tesla bad news, as the company had just reported its worst quarterly sales report in three years. The company delivered 336,681 vehicles, marking a 12.9% decline compared to Q1 2024.

People in the US are increasingly critical of Elon Musk’s role in the Trump administration, with a Washington Post-ABC News-Ipsos poll finding negative reactions to some cuts made by his US DOGE Service and skeptical that the government is cutting waste and fraud. Each month Musk’s approval rate falls: in April, only 35% of US residents approve of the way Musk is handling his DOGE position. Disapproval of Musk is up among almost all demographic groups in the poll. Musk is less popular than President Donald J. Trump.

The editors of The Contrarian summarize it succinctly. “Elon Musk has become a reviled figure, Tesla’s brand turned toxic, and even Musk’s reduced presence in the White House is unlikely to cleanse his obnoxious taint from the Republican Party.”