Resistance to the way Tesla Motors sells its cars - directly to the consumer, with no negotiating and no dealer middleman - comes mostly from dealership organizations around the country. It's also illegal in some states, thanks to laws ushered into place with help from dealers. The reaction to Tesla's new style of business is led by what Steve Blank calls, "rent seekers" or "landlords of the status-quo." Tesla itself isn't into that sort of name-calling, but it will take to the courts when necessary.

Case in point, New Jersey, where the legislature voted in mid-March to stop Tesla stores from selling cars starting April 1. This week, the New Jersey Motor Vehicle Commission (MVC) extended a deadline until April 15, a move that could save the EV automaker's future in the state. Tesla has now filed with the state Superior Court asking that the ruling be appealed.

Tesla says that the MVC is taking its orders from the state dealers association, the New Jersey Coalition of Automotive Retailers. Tesla also made an argument against the traditional gasoline vehicle dealers that we've heard before. Here is some of the text of the appeal:

Franchise dealers have an inherent conflict of interest in selling electric vehicles. In order to do so effectively, they would need to enthusiastically tout the reasons why electric vehicles are superior to gasoline vehicles. This is not something that they are going to do since gasoline vehicles represent virtually all of their revenue. Dealers also depend on quick, high volume sales - incentivized by substantial sales commissions - in large, out-of-the-way facilities that contain large inventories of new and used cars. By contrast, Tesla sells its cars in relatively small showrooms, often located in shopping malls (like the two stores in New Jersey) that invite people unfamiliar with electric cars to drop in.

You can read the full appeal in the PDF below. The TSLA stock price rose after the appeal was filed, but has since leveled out.

Tesla vs. New Jersey Auto Dealers Superior Court Appeal by AutoblogGreen



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    • 1 Second Ago
  • 14 Comments
      purrpullberra
      • 14 Hours Ago
      Good for Tesla. Any and all types of protest are called for since these anti-Tesla moves are largely despised. There are ways to achieve dealership protection without forcing Tesla to use despicable car salesmen and the rotten dealership way of doing business. The politics behind these moves stinks like dog crap and I for one want all involved to get thrown out of their jobs. Tesla has the right to sell their cars as they wish, anything else is un-American.
        Letstakeawalk
        • 14 Hours Ago
        @purrpullberra
        " There are ways to achieve dealership protection without forcing Tesla to use despicable car salesmen and the rotten dealership way of doing business." This is the greatest strawman argument going, and the basis of Musk's own reasoning. However, there is absolutely nothing preventing Tesla from finding good people to represent them. Tesla doesn't have to offer a franchise to anyone they haven't completely vetted. Especially considering the fervor with which Tesla devotees defend the company, surely there is at least a few enterprising Tesla owners who'd be willing to invest in the company even further by buying franchise rights. It would be Tesla lovers selling Teslas, and they could still operate in *exactly* the same fashion as how the current Tesla Store model works.
          purrpullberra
          • 14 Hours Ago
          @Letstakeawalk
          m_2012 I hit - not plus. Sorry
          m_2012
          • 14 Hours Ago
          @Letstakeawalk
          Absolutely false. What person would want to invest millions on a store and franchise for a vehicle that rarely needs service. My family owned a dealership and revenue is generated by service and parts, not by sales. Commission pays for the warm body to sell, er, lie to you. An franchised EV dealership could not survive a week and the dealership association knows this. If you cant stop them from building a great car (ADA tried that also) then you make it illegal for them to sell it. No reason dealerships could not exist as they are and Tesla go the way they are. They do not want to compete with franchises. That would be the end of Tesla.
          purrpullberra
          • 14 Hours Ago
          @Letstakeawalk
          FORCING THEM to use a dealership is INEXCUSABLE period. The laws were only ever meant to protect dealerships not to FORCE businesses with no franchises to set that system up. Sure, Tesla fans could become dealership owners. But... No one has the RIGHT TO FORCE TESLA into that type of business arrangement. Your view on the arguments seems to strain credulity. The dealership system is an ongoing, gross abuse of the customer and Tesla has every right to eschew it. You miss the point entirely it seems.
          purrpullberra
          • 14 Hours Ago
          @Letstakeawalk
          FORCING THEM to use a dealership is INEXCUSABLE period. The laws were only ever meant to protect dealerships not to FORCE businesses with no franchises to set that system up. Sure, Tesla fans could become dealership owners. But... No one has the RIGHT TO FORCE TESLA into that type of business arrangement. Your view on the arguments seems to strain credulity. The dealership system is an ongoing, gross abuse of the customer and Tesla has every right to eschew it. You miss the point entirely it seems.
      Electron
      • 14 Hours Ago
      Wow, this appeal really contains a tale of stonewalling, deception and abuse of power. I used to call this the legal war on Tesla but in NJ it really is the illegal war on Tesla with corrupt politicians and car dealers doing whatever it takes to stop Tesla. Buying car in NJ has become like buying illegal drugs, one is dependent on particularly ruthless middlemen.
        brotherkenny4
        • 14 Hours Ago
        @Electron
        You do know you are referring to NJ right? I suppose people can still believe that the information coming out of NJ about the corruption there was some kind of socialist plot to destroy our great capitalist system, I just find it astounding that they do. Every time I think that it should be clear to people what we are really like, I find that they don't. Let me say this plainly. NJ is corrupt. If you didn't know it before, and it's amazing that you don't, you may see it now. Since americans never vote out liars and corruption you must see that the politicians think, and actually know, that they can act without impunity, because when election time comes, none of them ever have to pay the price, ever. It's never happened.
      NestT
      • 14 Hours Ago
      The NJ legislature did not stop Tesla from selling vehicles. The New Jersey Motor Vehicle Commission voted to reinterpret existing law to invalidated two licenses already granted to Tesla. They scheduled the vote quickly and did not allow public comment on the change until after the vote. After the big brouhaha they then voted a two week extension to give time for the NJ Legislature to broker a compromise between Tesla and the New Jersey auto dealers like NY or Ohio. I guess Tesla does not like the way those negotiations are going.
        jeff
        • 14 Hours Ago
        @NestT
        Nope, This was about changing the rules. They changed the rules to require a minimum square foot show room and required that a service center be physically attached to the show room. It was a back room deal designed specifically to hurt tesla's style stores.....
        Jon
        • 14 Hours Ago
        @NestT
        Why should Tesla have to "negotiate" with NJ auto dealers? "Hey Tesla, that's a nice car showroom you got there. Would be a shame if something happened to it.."
      • 14 Hours Ago
      First I personally do not see the Electric Vehicle Superior to gasoline .What I do see is that EV will make the Auto Industry, to keep improving their vehicles and give you BETTER gas mileage and a safer one also .The EV fits in as a short to mid level driving no more than 100 miles one way . It will help eliminate smog ,air pollution and the needless chain to the gasoline pumps that seems to go up up up with no end in sight . This is the reason that they are waging war on the EV . Ask yourself why they haven't made the HYbirds get better gas mileage .
      CoolWaters
      • 14 Hours Ago
      NO KEEP the BAN, PA needs the business.
      jeff
      • 14 Hours Ago
      This not a case of applying the law, it is a case of changing the laws in a back room deal. The laws protect existing franchise owners againt the manufacturer. Tesla has no franchises to protect. What the commission did was apply NEW rules to the requirements of the size of the show rooms and required the Service center be physically attached to the showroom. This was done 100% to be against Tesla's style stores.... it is a fine example of corruption and is in violation of the interstate commerce caluse in my opinion....
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