New Jersey aligns with other states, denying Teslas bid to retail cars directly

New Jersey aligns with other states, denying Teslas bid to retail cars directly

But Jim Appleton, president of the New Jersey Coalition of Automobile Dealers, says the decision simply requires Tesla to conform to state auto retailing laws which, among other things, calls for cars to be retailed through dealers.

Appleton told Automotive News he doesnt want to see Tesla leave the state; he just wants the company to follow the law. While New Jerseys action with Tesla was referenced in an editorial last week in the Washington Post (Charles Lane, Tesla vs. the dealerships, March 13, 2014), the writers anti dealer mentality in supporting Musk and his Tesla sales model was answered by NADAs CEO Peter Welchs letter to the editor earlier this week (Car dealers provide accountability March 17, 2014).

If Tesla seeks to change the way cars are sold in New Jersey, it will need to get the laws changed, said Christies office. 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, said a statement from the governors office.

Musk, in his blog on Teslas website, encourages New Jersey consumers to shop in Teslas stores in New York City or King of Prussia, Pa., or buy a Tesla online and have it delivered. He doesnt want to use dealers to sell Teslas because he believes dealers have a conflict of interest in selling electric cars when most of their revenue comes from gasoline cars.

Besides, Musk says, The evidence is clear: When has an American startup auto company ever succeeded by selling through auto dealers? The last one, according to Musk, was Chrysler. Since then, Tucker, DeLorean, Fisker, Coda and many others have failed.

Where the tenacious Musk goes from here is anyones guess, but here is his Garden State plan: We are evaluating judicial remedies to correct the situation, he writes, while encouraging consumers to write their New Jersey representatives to press for a change in the law.

In the meantime, some jurisdictions — Massachusetts, Minnesota, Washington state and Washington, DC– havent shot Musks dealerless retail model down. Virginia, perhaps, has the most unique approach, such that the OEM– via an out-of-court settlement with the commonwealth–has been given the opportunity to retail its vehicles through one location in Northern Virginia, with the understanding that it will reassess its dealerless model by a time certain in the future.

The New Jersey Motor Vehicle Commission last week denied Teslas most recent attempt to persuade state regulators that it should be allowed to retail its vehicles without dealers, despite auto retailing laws there to the contrary. The Motor Vehicle Commission told Tesla it may no longer sell cars from its two retail locations after April 1.

In so doing, New Jersey joins Maryland, Arizona and Texas, which earlier had rejected Teslas automaker retail model that operates by selling new vehicles directly to the consumer without a dealer or retail dealer network, which is called for by a number of state motor vehicle licensing laws. Teslas response, through its outspoken CEO, Elon Musk, was swift and predictable, accusing Governor Chris Christie of setting up a backroom arrangement with auto dealers.

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