Doesn't New Jersey Gov. Chris Christie have enough people mad at him already? Apparently not, since more than a few folks who like Tesla Motors are ready to get riled up. The governor is already embattled via his office's alleged role in a scandal involving politically-motivated lane shut-downs to the George Washington Bridge. And with him now deciding to let the state's motor-vehicle commission rule on allowing for Tesla to own its dealers, Tesla has likely lost that battle and may have to shutter its two New Jersey factory-owned stores by April 1, Automotive News says.

Earlier this week, Tesla accused the governor on going back on his word after the company said it believed that the ruling would go before state legislature. Of course, the governor's office disagreed with that characterization. Kevin Roberts, a spokesman for Gov. Christie, sent a statement to AutoblogGreen that said:

Since Tesla first began operating in New Jersey one year ago, it was made clear that the company would need to engage the Legislature on a bill to establish their new direct-sales operations under New Jersey law. This administration does not find it appropriate to unilaterally change the way cars are sold in New Jersey without legislation and Tesla has been aware of this position since the beginning.

Tesla strenuously disagrees with that characterization, and Diarmuid O'Connell, Tesla's vice president of business development, told Bloomberg that, "any suggestion that Tesla was told 'since the beginning' about any problem with its ability to be licensed there is false." Representatives for New Jersey auto dealers say the ruling merely upholds current regulations and forces everyone to operate under the same mandate. Tesla first received approval to operate in New Jersey in the fall of 2012.

Tesla has won court decisions regarding dealer allowances in Massachusetts and New York, though most notably lost one in Texas (the company also can't sell cars direct to customers in Arizona). In the past, Tesla CEO Elon Musk has said he'd take the matter to the federal government, and we wouldn't be surprised to hear that sort of rallying cry come up again soon.


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  • 86 Comments
      Level4
      • 11 Months Ago
      Tesla why don't you stop being a cry baby and just issue grant dealer franchises and set the tone for how a Tesla model should be sold etc. If you are really after more sales.....
        mycommentemail
        • 11 Months Ago
        @Level4
        Cry baby? They are against what they perceive to be an illegal action by the state. They are fighting it (both in court and in the court of public opinion). Eventually they will win. In part because these laws are being misapplied, but more because they produce a fantastic and highly visible product and are using that popularity to fight against a very unpopular business model. It is only a matter of time.
      • 11 Months Ago
      I think that it is Clearly the big car and oil companies that have been at work, aiding the alleged dealer groups and pressuring pols in both parties to stop Tesla. Few Americans are aware that right before, during and after the Second World War, the Big Four auto companies,(gas was so cheap that big oil's interests were spread through the economy-not just ion cars and trucks), bought up all the privately held electric street car companies they could and had them scrapped. Before the war many medium and even small towns in America had electric tramlines for surface transit. As this was a block to car ownership, they had them destroyed. Even New Yorkers are now ignorant that once the transit starved East side of Manhattan had had THREE electric train lines, as well as street cars and buses. All NYC (and LA) street cars are long gone, along with the 2 elevated lines of the East Side, forcing a housing crisis in and outside NYC and making a necessity of owning a car for people who might not have needed one. Unfortunately for big oil, once electric cars are known to be safer, and as easy to fuel as gas internal combustion cars; the days of gas engines will be limited. This is why they are so desperate.
        Marco Polo
        • 11 Months Ago
        @ sig k " Clearly the big car and oil companies that have been at work, aiding the alleged dealer groups" It's the exact opposite ! Like most conspiracy theorists, you have little knowledge of history or reality. It's in the interests of the other big auto-manufacturers to assist Tesla. Both Ford and BMW have tried in recent years to institute direct retail sales models. The dealers don't fear Tesla, they fear that Tesla's direct sales model would allow the major auto-makers to scrap the franchise selling method. Nissan have no problems selling the Leaf through dealers, nor does GM have any problem selling the Volt etc. All over the world, cities in the late 30's 40's 50's and early sixties, scrapped transit services. The reasons were complex and varied from city to city, but mostly the old services were uneconomic. The rapid expansion of the population meant that new suburbs could be created cheaply around the new industries and shopping centres that sprang up on the outskirts of cities. Cars became symbols of new freedom and prosperity as people, especially white, fled from the old urban areas, to the leafy green suburbs. New industries were created in clean new towns, far away from the crowded, dirty cities that housed the depression era population. Returning soldiers could buy a new house of his dreams, in a clean new suburb, with a two car garage, (and two cars). Most of the old transit system went bankrupt, or took up to much road space, and became a symbol of and older, poorer, depression era world, where only the rich had decent housing, and could afford cars.
          jeff
          • 11 Months Ago
          @Marco Polo
          No it is GREEEEEED from the Auto dealers and Oil companies.....
          Marco Polo
          • 11 Months Ago
          @Marco Polo
          @ Joeviocoe Joe, I think you leapt to the wrong interpretation. 'sig k ' made the accusation that the major auto-manufacturers were conspiring to destroy Tesla and EV's in general, in combination with oil companies. That's clearly untrue. Both Ford and BMW in recent years have tried to institute direct marketing but failed. The OEM's would be delighted to see Tesla win, since it would open the door for their moves into direct retailing. The oil companies have no interest in how cars are retailed. Nissan Leaf dealers are members of the NADA, and are equally opposed to Tesla's direct sales business model, so it not about EV's but about the issues of retail business models. The instance you cite, is exactly what you would expect from GM. GM is opposed to making any exemption for Tesla, stating the same rule should apply to everyone. That's exactly what the NADA is afraid of, GM using a precedent set by Tesla to end it's franchise arrangements. It would be in GM's best interests to be seen agreeing to a special case being made for Tesla alone. I agree with you that in this dispute, there are no 'conspiracies', the parties are each simply doing what they perceive is in their own best interests.
          Jesse Gurr
          • 11 Months Ago
          @Marco Polo
          Marco, What do you mean by "Nissan Leaf Dealers"? That makes it sound like there are dealers that sell ONLY Nissan Leafs, which is untrue. There are only Nissan Dealers which were doing just fine selling gas cars before the Leaf came along and will do just fine if the Leaf ever goes away. Nissan had to sell it's Leaf at it's dealers because they had to by law since all their other cars are sold through dealers.
          Joeviocoe
          • 11 Months Ago
          @Marco Polo
          --"Like most conspiracy theorists, you have little knowledge of history or reality." Funny, considering your next statement is completely wrong. --"It's in the interests of the other big auto-manufacturers to assist Tesla" --"The Senate panel accepted written testimony from General Motors Co. opposing any additional dealer licenses for Tesla beyond the two for stores in Columbus and Cincinnati. “Tesla is an automobile manufacturer, they compete with our vehicles in the market, and they should compete under the same laws we do,” the Detroit-based company said." http://www.bloomberg.com/news/2014-03-11/tesla-stores-may-be-closed-after-n-j-blocks-direct-sales.html Apparently GM is NOT doing what YOU think is in their best interests. Quit trying to label this as "conspiracy theories". Nobody need be 'conspiring' to behave this way. Just companies, entities and people... lying as usual to get what they want in their own self interest.
      Rick Faced
      • 11 Months Ago
      Tesla could leave the "store" open as a showcase for viewing the cars only. When a NJ customer wants to buy one, a Tesla rep could shuttle/limo the buyer to another state for full concierge service and purchase then.
        Val
        • 11 Months Ago
        @Rick Faced
        yeah, but NJ or some other state has mandated that there be NO personnel in the showrooms, no pricing, and the cars should be close, so that people can't sit in them...
      bluepongo1
      • 11 Months Ago
      (D) & (R) commenters still exchanging impotent rage at each other = oblivious that their Stockholm syndrome is part of what works for the status quo. How sad they don't realize: (D) = (R) both need to go with the status quo. BTW Thanks @2EZEE for making (D) = (R) perfectly clear with your links, vote for anyone else if you don't want to live in the past.
        bluepongo1
        • 11 Months Ago
        @bluepongo1
        http://www.wired.com/business/2014/03/car-dealers-fear-teslas-plan-end-oil-changes-forever/
          bluepongo1
          • 11 Months Ago
          @bluepongo1
          That's many downvotes for a link, car dealers U MAD ?
      Letstakeawalk
      • 11 Months Ago
      I don't see why they have to close the stores. Keep selling polo shirts, and key fobs, and have a car in there that serves as an attention-getting display. Post the Tesla website address prominently. It's not like it's a "dealership" or anything...
        paulwesterberg
        • 11 Months Ago
        @Letstakeawalk
        I didn't know that Tesla sold polo shirts! Now I can look like I work in their store, err I mean gallery! http://shop.teslamotors.com/products/mens-striped-polo-black
          Nick Kordich
          • 11 Months Ago
          @paulwesterberg
          @Jesse Gurr - If $1000 seems high, keep in mind that adding a CHAdeMO port to a Nissan Leaf costs $1250, and it's $1800 to add one to Zero motorcycle.
          Jesse Gurr
          • 11 Months Ago
          @paulwesterberg
          Oh i see the chademo adapter there for $1000, just for the adapter. Cool
          Grendal
          • 11 Months Ago
          @paulwesterberg
          I've got three Tesla polos. They are very comfortable.
      CoolWaters
      • 11 Months Ago
      Repubs believe in, not Capitalism, but bribery of government.
      jeff
      • 11 Months Ago
      I hate car dealers and will NEVER buy a new car from them again.... These NEW laws are most likely a violation of the interstate commerce laws...
      Smoking_dude
      • 11 Months Ago
      wow... finally there is growth within the American economy and now the republicans are trying to kill it off. Tesla is the market leader with its unique product. The republicans always rant about evil socialists, but in fact this is what they are doing now. Well it might be better to block tesla so long that the chinese close up and and tesla disappears... or what are they thinking???
      • 11 Months Ago
      Imagine poor, poor, Tesla having to compete with the other manufacturers on a level playing field. They will actually need to set up dealerships with service departments and parts departments. I'm sure that their service and parts departments will be very close to unnecessary because Tesla's are perfect in the most absolute sense of the word. If you don't believe me ask any enviro nasi. They will tell you. Even Consumer Reports, which normally has disclaimers on every other new vehicle manufactured by any other manufacturer regarding the vehicle being too new to ever give reliability recommendations on , suspended their own rules and made Tesla the exception to their own rules. They have highly praised the car for reliability even though the sample size is way too small to make a judgement one way or the other. Ideologue's have no boundaries on what they will say or do to protect their agenda. Facts are irrelevant to them.
        Joe Acerbic
        • 11 Months Ago
        Repeatedly spamming that same stupidity to every article about these tactics won't get anyone to love scammy car salesmen and corrupt politicians. Just give it up already, ok?
        Letstakeawalk
        • 11 Months Ago
        "I'm sure that their service and parts departments will be very close to unnecessary because Tesla's are perfect in the most absolute sense of the word." I'm not sure if you're being sarcastic, but the Edmunds long-term test Tesla is already on its third drive train.
        David Murray
        • 11 Months Ago
        Its not a level playing field. Dealerships have an incentive to sell gasoline vehicles, hence why most dealers in the USA that can sell EVs prefer not to sell them unless a customer specifically comes in and asks for one. But also, i think ALL manufacturers should be able to sell directly, not just Tesla - thus the playing field would be even in that scenario as well. Also, Tesla already has service departments. How do you think they take care of their existing warranty repairs?
          paulwesterberg
          • 11 Months Ago
          @David Murray
          Also EVs need less service so dealerships will make less revenue repairing vehicles.
      • 11 Months Ago
      What a crock! What the he1l does any government, state or otherwise, have to do with deciding what the retail distribution chain should look like for a legitimate business? And we wonder why our manufacturing base has been destroyed and innovators go overseas. Over-regulation and taxation destroys economies. ENOUGH ALREADY! Let Tesla stand and fall solely on the merits of its products in a free market.
        Letstakeawalk
        • 11 Months Ago
        I agree. We should also allow other automakers to conduct similar direct-to-consumer sales as well. Imagine getting a Leaf, or a Volt, or an i3 without the Dealer's mark-up!
          Letstakeawalk
          • 11 Months Ago
          @Letstakeawalk
          I never said anything about stopping production of a brand. I said create a new brand, one that has no contractual obligations to any franchisee. GM has already shown with Saturn, that creating a new brand with products not available at other GM dealers, is possible. Makers drop individual models all the time. No Camaro for quite a while. No minivan anymore from GM or Ford. Dealers have no recourse if a maker decides to whittle a product line down. To be honest, I'm sure that there's a Chevy dealer out there who'd be happy selling nothing but pickups, if that was all Chevy made. "Having a huge amount of capital tied up and sitting on large parking lots is a waste of resources." Hmm, I wonder what Tesla is going to have to do when they get that Model E production line running at full volume...
          paulwesterberg
          • 11 Months Ago
          @Letstakeawalk
          What about existing dealer/manufacturer contracts? It seems like those would need to be renegotiated.
          Joeviocoe
          • 11 Months Ago
          @Letstakeawalk
          LTAW... off-topic, but since you recommended it. I went to the Alt-Car show, test drove all the FCVs. :D
          paulwesterberg
          • 11 Months Ago
          @Letstakeawalk
          I am pretty sure that the dealer contracts contain a clause whereby the manufacturer must provide compensation if the stop making a brand. I don't like auto dealers much, but I would rather see a negotiated and orderly transition away from current business models rather than a chaotic complete and immediate market transition. Having a huge amount of capital tied up and sitting on large parking lots is a waste of resources. Tesla's reservation system with build to order vehicles is the future. I am sure that the traditional manufacturers want to streamline their business model, but without Tesla or other market forces(bankruptcy) they may have little incentive to start the transition.
          paulwesterberg
          • 11 Months Ago
          @Letstakeawalk
          Planet money estimated that dealers add $1,800 to the cost of a new car. Listen to the podcast here: http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=171814201&m=171850002
          Letstakeawalk
          • 11 Months Ago
          @Letstakeawalk
          I thought we were all "fark the Dealers"? If that's too simplistic, then just let the makers establish new brands, which don't have any contractual restrictions. The makers don't have any obligation to give old Dealers new franchises for new brands.
          Dave D
          • 11 Months Ago
          @Letstakeawalk
          I'm not aware of any contracts which last forever. When current dealers need to have their contract renewed, then change it. They don't have to keep selling the cars if they don't like the terms. :)
          paulwesterberg
          • 11 Months Ago
          @Letstakeawalk
          @Dave: Actually franchise laws allows a franchise to passed on to the children of the owner. So ending a brand like GM did with Saturn and Pontiac can be an expensive proposition for the manufacturer.
      jeff
      • 11 Months Ago
      With that one decision he just lost any chance of being president....
      cointel
      • 11 Months Ago
      They should allow small companies to sell direct until they reach a certain volume. I think some of these tactics are politically motivated, they want to fail out the company and show that any government intervention leads to failure. Having just a store in a mall and not being able to test drive the car makes the decision to purchase risky. They are selling something that is a new propulsion system for cars. Similar to the Sun, light bulbs, or oil, the particles that have weak bonds fly off as photons when energy is applied (positive media coverage). Gradually, you lose those and you are dealing with heavier particles with stronger bonds that come off as heat and dim the light. Tesla is going to have to adjust to get those customers with advertising, test drives, and heavy sales. I believe there are other approaches that would be better to boost sales long term.
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