Tesla Motors could use a little help from Tony Soprano to help convince New Jersey politicians to allow its direct car sales model to operate in the Garden State.
Electric car maker Tesla complained in a blog post on March 11 that the state had reneged on a deal that would have delayed implementation of legislation banning Tesla's direct sales model. Tesla said it was promised that any change to the law requiring car makers to sell through a franchise operation or middleman would be handled in the state's legislature.
However, this was changed, giving the decision to the New Jersey Motor Vehicles Commission. This body met on March 11 and voted to endorse the proposal, called PRN 2013-138, that would impose the middleman rule. Supporting the state is the New Jersey Coalition of Automotive Retailers (NJ CAR), a trade association for car dealers.
Unlike other car makers Tesla uses a direct-to-consumer model instead of privately-owned dealerships to sell its cars. If no changes are made Tesla would have to shut down by April 1. The franchise rule was put in place to allow for proper competition in the market place, however, Tesla argued that it is selling a new type of car that requires special consumer education that its facilities can provide.
"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," the company said on its blog.
So far, Tesla has been issued two dealer licenses in the state.
New Jersey Governor Chris Christie's office fired back at the accusation that it is in working in cahoots with NJ CAR. A Christie spokesman said Tesla had been told it had to work with the state legislature to create a bill that would establish the company's new direct sales model in the state.
Tesla also blamed the state for nine months of unexplained delays in the issuing of a new sales license and delaying the annual renewal of the company's current dealer license.
