Wednesday, July 30, 2014
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Updates: Christie says Tesla's NJ problems are its own fault

Status quo?

Updates: Christie says Tesla's NJ problems are its own fault

The 2013 Tesla Model S. (Photo: Tesla / MCT)
The 2013 Tesla Model S. (Photo: Tesla / MCT)

UPDATE AGAIN: At least one Democratic assemblyman has broken with Gov. Christie and is speaking out in favor of Tesla's plan to bypass auto dealers. Rep. Tim Eustace, D-Bergen/Passaic, said Christie was "unilaterally bypassing the legislature and serving as a roadblock as the electric car industry attempts to expand its presence in New Jersey." Eustace, an admitted electric-car driver who backs taxpayer subsidies for battery buggies, added that "today’s capricious decision may effectively shut down Tesla’s operations," and urged the Governor to instead "cut out the middleman" for the sake of "long-term benefits that electric cars pose for consumers and the environment." 

BEFORE THAT: Christie spokesman Kevin Roberts responds: "Since Tesla first began operating in New Jersey one year ago, it was made clear that the company would need to engage the Legislature on a bill to establish their new direct-sales operations under New Jersey law. 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."

In short, as far as Christie is concerned, the proposed rule Tesla objects to just enshrines the status quo -- NJ new car dealers need franchise deals with manufacturers; carmakers can't sell directly to consumers -- so it is Tesla that needs to go to lawmakers and seek a new law if it wants to bypass dealers and sell cars direct. Christie also says he would consider signing a General Assembly-approved bill that made Tesla's way legal.

YESTERDAY: "Tesla is under attack in New Jersey," writes Diarmuid O'Connell, vice president of business development at high-end electric carmaker Tesla. Tesla's direct-to-buyer approach has provoked opposition by traditional car dealers in a number of states. The company says that opposition has reached critical mass in the Garden State, and the industry's state oversight group is on the verge of adopting rules that could force Tesla to close its Paramus and Short Hills stores. (Locally, Tesla also has a store in King of Prussia, Pa.)

"With the support of the special interest New Jersey Coalition of Automotive Retailers (NJ CAR), the New Jersey Motor Vehicle Commission (NJMVC) under Governor Chris Christie has expedited the proposal of RULE 2013-138 which could effectively cause the American carmaker to shutter all operations, including Tesla’s two retail locations and affiliated jobs in the state as early as Tuesday afternoon," Tesla said in a statement.

According to Tesla, the proposal "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."

Tesla says the Christie administration is pushing the rule through despite earlier discussions that left the question open: "Only now, in the eleventh hour, has Tesla been alerted that a Board meeting is taking place later this afternoon at which time the NJMVC Board is set to vote the anti-Tesla regulation" at the Motor Vehicle Commission office in Trenton. 

 

 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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