Tesla stores may be closed after New Jersey blocks direct sales

[Redfairen]

Source: Bloomberg

Tesla Motors Inc., the electric-car company that doesn’t have franchised retail dealers, may be forced to close stores in New Jersey after a state commission voted to bar automakers from selling directly to customers.

The New Jersey Motor Vehicle Commission unanimously approved the proposal today in Trenton, delaying public comment on the matter until the hearing concluded. Tesla earlier today said it learned only yesterday that the rule change was coming to the most densely populated U.S. state, which is important for reaching customers in the New York metro area.

“There’s no question that this rule was aimed directly at Tesla,” Jonathan Chang, a lawyer for the automaker, said at the state Capitol after the decision. “New Jersey does not believe in free enterprise, the bedrock of this nation.”

The vote puts at risk the Palo Alto, California-based automaker’s two stores in the Garden State, and comes as Tesla fights to sell its luxury electric cars directly to consumers. Car-sellers in Ohio, New York, Minnesota, Georgia and elsewhere in the past year have sought to block Tesla from directly retailing its models. Texas dealers successfully backed a law setting the nation’s toughest restrictions on Tesla, and Arizona, Colorado and Virginia also imposed limits.


Read more: http://mobile.bloomberg.com/news/2014-03-11/tesla-stores-may-be-closed-after-n-j-blocks-direct-sales.html

[blackspade]

1. And the purpose of limiting direct sales is?

Talk about regulating the 'free' market...

[Major Nikon]

3. It forces Tesla to either establish their own dealerships or partner with another manufacturer

Naturally the "partner" takes their cut off the top.

[blackspade]

5. Sounds like a shakedown

[LibertyLover]

18. Well, it is New Jersey after all

and I can say that having been born and raised in New Jersey.

[kristopher]

8. IIRC dealers add nearly 30% to the final costs to consumers.

The standard markup is less than 10%, often much less. But by the time the finish selling all their aftermarket products the average amount added to the cost of cars is huge.

[Blue_Tires]

7. I smell the NADA's filthy claws in this...

[alp227]

9. because Chris Christie doesn't want Teslas on the George Washington Bridge nt

[WhiteTara]

12. Got to protect those dealers.nt

[secondvariety]

2. So much for

the invisible hand of the market. I'm wondering how this can even be legal. I hope Musk and the rest of the investors sues the shit out of them.

[mike_c]

4. but-- but-- "the market...."

Lame. Really really lame.

[Fumesucker]

6. No one actually beleives in the "free market" once they start making serious money

Then it becomes all about protecting and expanding their market share with the eventual goal of a de facto monopoly.

Ten years from now Tesla will be pulling the very same shit on some upstart manufacturer.

[defacto7]

13. Man, I wish I had

your crystal balls... ball I mean.

I know what you're saying.

[tomm2thumbs]

10. I'm sure neighboring states will be happy to get the sales tax NJ isn't interested in...

Foot, meet bullet

[starroute]

11. Tesla is blaming Christie for going back on his word

http://www.teslamotors.com/blog/defending-innovation-and-consumer-choice-new-jersey

Since 2013, Tesla Motors has been working constructively with the New Jersey Motor Vehicle Commission (NJMVC) and members of Governor Christie’s administration to defend against the New Jersey Coalition of Automotive Retailers’ (NJ CAR) attacks on Tesla’s business model and the rights of New Jersey consumers. Until yesterday, we were under the impression that all parties were working in good faith.

Unfortunately, Monday we received news that Governor Christie’s administration has gone back on its word to delay a proposed anti-Tesla regulation so that the matter could be handled through a fair process in the Legislature. The Administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey. This new rule, if adopted, would curtail Tesla’s sales operations and jeopardize our existing retail licenses in the state. Having previously issued two dealer licenses to Tesla, this regulation would be a complete reversal to the long standing position of NJMVC on Tesla’s stores. Indeed, the Administration and the NJMVC are thwarting the Legislature and going beyond their authority to implement the state’s laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers. This is an affront to the very concept of a free market.

Proposal PRN 2013-138 seeks to impose stringent licensing rules that would, among other things, require all new motor vehicles to be sold through middlemen and block Tesla’s direct sales model. This move comes in spite of discussions with the Governor’s staff as recently as January, when it was agreed that Tesla and NJ CAR would address their issues in a more public forum: the New Jersey Legislature. Instead, rather than engage in an open debate on such a significant policy issue, the Administration has expedited the implementation of a new law that the Commission intends to stealthily approve at a meeting in Trenton today at 2:00 PM EDT.

[defacto7]

14. Whatever side one is on...

If one can afford a Tesla, NJ is a small state, that person can get a Tesla in another state and give them the business. Nothing can keep it from being licensed in NJ that I know of.

[Marrah_G]

15. how is this legal?

[DeSwiss]

16. K&R

The profit mechanism creates established orders which constitute the survival and wealth for a few groups of people. The fact is that no matter how socially beneficial new advents may be, they will be viewed in hostility if they threaten an established financially-driven institution. Meaning social progress can be a threat to the establishment.

Progressive advancement in science and technology which can solve problems of inefficiency and scarcity once and for all, are in effect making the prior establishment's servicing of those issues obsolete. Therefore in a monetary system corporations aren't just in competition with each other, they're in competition with progress itself. That is why social-change is so difficult within a monetary system. In other words, the established monetary system refuses to allow free-flowing change.

We have to understand that government as we know it today, is not in place for the well being of the public, but rather for the perpetuation of their establishment and their power. Just like every other institution within a monetary system. Government is a monetary invention for the sake of economic and social control and its methods are based upon self-preservation, first and foremost. All a government can really do is to create laws to compensate for an inherent lack of integrity within the social order.

~Peter Joseph

[father founding]

17. B.S.

Expect a huge increase in gas prices, because this is probably costing the oil companies billions to pay off all the politicians.

[HoosierCowboy]

19. Whatever their motives...

...they'll lose sales tax money because nothing stops a Tesla from being bought somewhere else and paying the sales tax there, and driving it to Trenton.
What a bunch of dumbells, a state teetering on the verge of bankruptcy

[LanternWaste]

20. Third state to do this. TX & AZ already have that imposition in place.

TX & AZ already have that imposition in place. I'm guessing its local trade groups doing their best to hang onto yesterday's marketing practices.

[Nye Bevan]

21. It's just not right to buy a car without the "let me check with my manager" guy,

and the slick-suited aftermarket specialist who tries to sell you Lojack and the extended warranty.

[Incitatus]

22. Maybe Tesla could turn those stores into rental shops.

Prospective buyers could rent "test drive" and check out the cars. Then buy them online from an out of state Tesla shop and have it delivered to them.

[Evasporque]

23. Is that constitutional?

Can States regulate the sale of goods to specifically force a middle man?

[bigworld]

24. If you buy a car from another state

the states have it set up so that you are legally required to pay the sales tax of the state in which you live, not where you buy the car (that's why everyone doesn't just buy a car in tax-free Delaware).

So NJ will get their tax money when NJ residents buy a car in any state.

But yeah, this was a big payback to the car dealership PACs, which are huge.