The motor vehicle commission in neighboring New Jersey, with the backing of Gov. Chris Christie, took the step this week, the New York Post reported. Arizona, Texas and Virginia also require car sales to be made through franchised dealerships.
"My hope is that we are going to be the next state," Mark Scheinberg, the president of the Greater New York Automobile Dealers Association, said Thursday. "I feel confident."
Elon Musk, founder of Tesla Motors and the company's chairman, blasted Christie on Twitter. He accused the governor of "subverting democratic process to try to block Tesla sales."
The association in New York hopes the legislature will ban direct sales and has also sued the division of motor vehicles, which ruled in Tesla's favor. While Tesla's Model S sedan are still a niche product, dealers fear that Asian carmakers will follow Tesla's lead and open factory-owned stores.
Tesla operated two stores inside New Jersey shopping malls selling directly to the public.