It's not quite the law that Tesla Motors can sell its car directly to customers in New Jersey, but the state has taken one step closer to that reality. Yesterday, New Jersey's Assembly Consumer Affairs Committee voted 4-0 to approve bill A3216, which would "Permits certain zero emission vehicle manufacturers to directly sell motor vehicles to consumers and requires them to operate service facilities."

The EV automaker's ongoing dealer fight took a turn for the worse in New Jersey a few months ago, when the state legislature voted in mid-March to prevent Tesla stores from conducting their business. Tesla had been selling cars in the sate, but Governor Chris Christie said the ban was just an enforcement of a law that had been on the books for years, something Tesla said was an "affront to the very concept of a free market." If A3216 becomes law, then electric vehicle makers would be able to operate "no more than four places of business in the State" as well as one service center.

The bill will let Tesla "conduct the business of educating the public about electric vehicles" – Diarmuid O'Connell

Speaking to the committee, Tesla's vice president of business development, Diarmuid O'Connell, said, "This is a super important issue for us in New Jersey, and as some of you would know, nationally as well. ... [The bill would] allow us to in a modest way and a reasonable way conduct the business of educating the public about electric vehicles and getting as many of those vehicles on the road as quickly as possible." Speaking for the New Jersey Coalition of Automotive Retailers, president Jim Appleton said that this solution is fine for start-up EV automakers, but that the franchise model should still be the goal for anyone selling cars.

This fight isn't nationwide yet, but the FTC has come out against what it called "protectionist" anti-direct sales mandates, so we expect to be hearing more as time goes by.


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  • 22 Comments
      Grendal
      • 6 Months Ago
      So the negative media attention caused them to buckle. It's good to see a reasonable compromise being met. "Speaking for the New Jersey Coalition of Automotive Retailers, president Jim Appleton said that this solution is fine for start-up EV automakers, but that the franchise model should still be the goal for anyone selling cars." And what else is he going to say? He was losing the PR war. This is what should have happened in the first place and keep the current franchise business practice out of the media.
        bluepongo1
        • 6 Months Ago
        @Grendal
        I don't think it was the media, I think it was the FTC they didn't want looking at them any closer.
          Grendal
          • 6 Months Ago
          @bluepongo1
          I'm sure the FTC was spurred into action by all the media attention.
        Joeviocoe
        • 6 Months Ago
        @Grendal
        Since the point of the NJCAR is to prevent the big automakers from requesting direct sales... it makes sense for rep to reiterate that "[This should not serve as precedent non start-up EV automakers]".
          Grendal
          • 6 Months Ago
          @Joeviocoe
          Since I never plan on buying a car at a dealership ever again, I don't really care whether they are there or not.
          purrpullberra
          • 6 Months Ago
          @Joeviocoe
          But all of us can still make this the precedent if that's what we all focus on. It may take a while but I'm still shooting for all manufacturers to have the ability to undercut every dealership. Let's see the great service they provide and how many satisfied repeat customers they'll have. Even 'conservatives' have to agree that the 'free market' should decide right? ;-)
      EVSUPERHERO
      • 6 Months Ago
      Wow, I sure hope Governor Chris Christie had a chance to deposit the NADA check issued to him for the back room deal he made with NADA earlier in the year, if not a "stop payment" for said check is in order.
        Grendal
        • 6 Months Ago
        @EVSUPERHERO
        It's more likely that NADA buckled under the pressure. Hopefully they realized the war they started wasn't going well for them.
      Neil Blanchard
      • 6 Months Ago
      What is this "conservative" principle about not picking winners and losers? Tesla should be allowed to sell their cars how they see best - in all states.
        CoolWaters
        • 6 Months Ago
        @Neil Blanchard
        "Conservative principles" are principle's money can buy.
      NestT
      • 6 Months Ago
      The New Jersey State legislature never voted to ban Tesla sales or stores. The New Jersey Motor Vehicle Commission, all Gov Christie appointees, voted to re-interpret existing law. From Auto Manufacturers can't compete against their own franchisees to Auto Manufacturers can't compete against franchised dealers or put another way Manufactures can't sell direct to retail customers.
      Joeviocoe
      • 6 Months Ago
      Sebastian... correct please. You wrote, "as well as one service center" The bill states, "at least one retail facility for the servicing" There will be NO LIMIT on "Service Centers". There is a minimum of having One, which Tesla already meets. http://www.teslamotors.com/service/springfield 52 Commerce St‎ Springfield Township, NJ 07081
        Joeviocoe
        • 6 Months Ago
        @Joeviocoe
        Funny... check out the street view of the Service Center address. Taken Aug 2013
      purrpullberra
      • 6 Months Ago
      Finally some people with sense have taken the reigns on this issue. Tesla shouldn't have to fight these un-American liars AND everything else in the world. I'm still thoroughly disgusted by this anti-Tesla BS. But Tesla is winning the fight and the dealerships can't change that fact. Whew.
      Lamborandon
      • 6 Months Ago
      NJ takin L's
      paulwesterberg
      • 6 Months Ago
      "no more than four places of business in the State" Why? Shouldn't the state welcome as many showrooms and service centers that the company wants to open? Most states would be happy to welcome new business operations and the jobs they create.
        Joeviocoe
        • 6 Months Ago
        @paulwesterberg
        " “Place of business” means a fixed geographical location at which the motor vehicle franchisor's motor vehicles are offered for sale and sold, but shall not include an office, a warehouse, a place of storage, a residence or a vehicle." So even Galleries, where merchandise such as t-Shirts and other accessories are sold, will not be limited. Service Centers selling 'out of warranty' services.... still is not considered a "place of business" under this bill. Since ONLY stores that actually sell cars, are limited to 4 across the state. Probably fine for Tesla considering that deliveries will be made from there, and no customers actually NEED to step foot in one.
          Joeviocoe
          • 6 Months Ago
          @Joeviocoe
          --"Anyone can buy a Tesla via their computer - does that qualify as a place of business? " " but shall not include an office, ... a residence..." The actual "business" transaction must take place somewhere. Usually the place that handles temp tags, insurance, etc. The customer need not set foot inside. But must coordinate, pay and sign via computer... only to have that one location handle the actual sale, then set up delivery. It is a hassle if it out of state, requiring more work to transfer registration and insurance prior to delivery. Having 4 'in state'... is more than enough at any volume. Even when doing 500,000 / year, 4 large business centers across the state... no customer need set foot inside. The Gallery for education and test drives. Online (out of the gallery) for customization, paying, signing, and tag/title info. Delivery to home.
          Neil Blanchard
          • 6 Months Ago
          @Joeviocoe
          Anyone can buy a Tesla via their computer - does that qualify as a place of business? The Tesla stores do not have any stock; only the test car(s) and they order the car that is delivered to the customer. The other car makers are scared witless of Tesla, and they should be. Rather than playing defense though, they need to rise to the challenge.
        Joeviocoe
        • 6 Months Ago
        @paulwesterberg
        --"Shouldn't the state welcome as many showrooms and service centers" Trying to get Sebastian to correct this. The bill states that only "Places of Business" are limited. Actual sales. Galleries are not places of business (unless they also get strict about selling t-shirts). And Service centers are also not "places of business" --"shall not be required to establish or operate a place of business at a retail facility for the servicing of zero emission vehicles."
      2 wheeled menace
      • 6 Months Ago
      Why is whether a car company is allowed to sell a car in a state up for a vote? Seriously..
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