This story was updated on March 30th.

The electric car, long dismissed as too expensive and impractical, has been the center of a fight in the corridors of Albany. A deal struck by Governor Cuomo on friday to resolve the dispute now awaits approval by the state legislature.

New York environmental groups, auto dealership lobbyists and legislators have battled it out over whether luxury electric car manufacturer, Tesla, can sell directly to consumers.

A bill forcing Tesla and other automakers to sell to consumers through licensed dealerships only gained significant traction in the state assembly this year. The legislation, sponsored by Rochester Democrat David Gantt, has been presented as an attack on the electric car.

On Friday, Tesla reached an agreement with Governor Cuomo and the state’s car dealership lobby which would “allow it to keep five existing company-owned stores, as long as it doesn’t open more direct sale outlets in the state”.

But no matter what happens in Albany over the next few days, New York is positioned to become one of the leading U.S. markets for electric cars, surpassed only by California, say analysts.

Trying to Reach New Customers

Tesla reaches consumers through its network of stores and service centers, which are mainly concentrated on the east and west coasts. The company has five stores in New York, including one in Manhattan.

The legislation currently under review by lawmakers would have closed Tesla’s stores. Similar legislation was just passed in New Jersey.

“New York is a state that’s committed to sustainability, clean energy, energy security, on a level you don’t find every place across the country,” Tesla Vice-President Diarmuid O’Connell stated recently, according to the New York Daily News.

“It’s deeply ironic there is a movement in the [New York State] Assembly to shut down … an all-American company that makes cars in the United States and supports sustainable transportation,” O’Connell added.

Because traditional dealerships are independently owned, electric car advocates fear that many of them will not be willing to take a chance on electric cars. Selling plug-in electric vehicles [known as PEV’s or EV’s] requires charging stations, specially trained personnel, and other additional expenses.

Those fears do not seem totally unfounded. Last month, Inside EV’s reported that over forty percent of Cadillac dealers had opted out of selling the [Cadillac] ELR, a luxury hybrid, “due to low return on investment.”

Projected to Grow

Despite challenges faced by Tesla and other electric car manufacturers, nearly 2.6 million plug-in vehicles will be sold in the U.S. between 2013 and 2022.

And California, New York, Washington, and Florida will likely lead the way in sales says Navigant, a firm which analyzes global clean technology markets. Almost 150,000 electric vehicles will be sold in New York over the next decade.

Much of the demand for electric vehicles will come from New York City and four major urban areas in California. Together, they will account for nearly one-third of U.S. PEV sales by 2022, reports Navigant.

EV’s are steadily becoming more affordable. The cost of an electric car’s lithium battery -a major component of the sticker price- will continue to drop, says the Department of Energy.

EV purchasers can apply for a $7,500 federal tax credit. And in New York State, they may also be eligible to drive in New York’s HOV lanes and receive up to a 10 percent E-ZPass discount.

Making Room for Electric Cars

The Bloomberg administration must have read the same projections. Electric cars are part of the former mayor’s sustainability blueprint, PlaNYC. Bloomberg’s Office of Long Term Planning and Sustainability even had a staff person dedicated to promoting electric car use.

Mayor De Blasio’s office did not respond to questions from NYER about electric cars. But before leaving office, Mayor Bloomberg laid the groundwork to eventually make 20% of the city’s parking spots “plug-in ready” over the next decade.

New York City has an estimated 200 electric-car charging stations at the moment.

A law passed in December by the City Council, which amends the city’s building code, will create approximately 10,000 plug-in ready parking spots, with 5,000 available over the next 7 years.

“Powered by Sunshine”

The next step, say environmentalists, is to re-charge electric cars with solar power, further minimizing their impact on the climate.

Solar powered EV charging stations are already in use throughout the country. And New York State has embarked on a multi-year expansion of its solar power capacity. Will we start to see solar powered charging stations on the New York State Thruway, or on Coney Island Avenue? Stay tuned.