Published on April 2nd, 2014 | by Robyn Purchia1
Tesla Stores May Be Legal Again, Thanks To New Jersey Legislature
April 2nd, 2014 by Robyn Purchia
A few weeks ago, Governor Chris Christie’s administration was widely criticized for forbidding Tesla to sell its cars directly to consumers within New Jersey. Christie defended the unpopular decision, noting that the state’s franchise laws prohibit auto manufacturers from selling directly to consumers. “My job is not to make the laws, it’s to enforce the laws. And Tesla was operating outside the law,” Christie said, encouraging the New Jersey Legislature to fix the problem.
Last week Assemblyman Tim Eustace (D-Bergen/Passaic), who drives an electric car himself, answered the call. He introduced a bill, which allows any motor vehicle franchisor who manufactures electric vehicles to sell directly to consumers. In an interview with NJTV, Eustace said that he is looking forward to a solution for New Jersey jobs, businesses, and citizens.
Notably, the bill is limited to sales of electric cars, which could help eliminate some of the objections from the auto dealers. The powerful auto dealer lobby has fought direct auto manufacturer sales because they would infringe on auto dealers’ businesses. But as Tesla CEO Elon Musk has pointed out, dealers do not want to sell electric cars because they require less maintenance, which is a dealership’s bread and butter.
“They make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car,” Musk wrote on his company’s website.
Jim Appleton, president of the auto dealer lobby, the New Jersey Coalition of Automotive Retailers, said he thinks the limitation in Eustace’s bill is reasonable, though he cautioned that he doesn’t know its details yet. “To the extent that there is legislation that would allow an all-zero emission vehicle automaker to enter the market for a period of time without franchises, before they eventually convert to a franchise system, it makes sense,” Appleton said.
The Eustace bill may have shown up just in time to keep Tesla in New Jersey. Even with the short reprieve recently granted to Tesla, the car company will still be forced to close its New Jersey shops by April 15 if the bill doesn’t pass by then. But Eustace is hopeful that it will. “Maybe we’ll get something done in 15 days,” Eustace said. “The governor said in one of his town halls last week that he wanted a solution to this. I’ll take him at his word.”