By on March 26, 2014

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Even though the door on Tesla’s direct sales model appeared to be closed in New Jersey, the Garden State is reconsidering its position just as the automaker’s way of doing business could find itself a major talking point in the 2016 run for the White House.

Automotive News reports that New Jersey Assemblyman Tim Eustace introduced a bill which would allow Tesla to continue selling its cars to the state’s consumers. The bill, which is the third in a series of actions related to the currently strained relationship between the two parties, comes on the heels of the state’s Motor Vehicle Commission’s decision to reinforce existing law banning direct sales by automakers, which would have unintended consequences for the local economy according to Eustace:

Because of this new rule, an interested buyer looking for more fuel-efficient, environmentally-friendly vehicle options can go look and ask questions about an electric car in New Jersey, but will have to go to Pennsylvania or New York if he or she actually wants to buy the car. How does sending business to other states help New Jersey’s economy?

For their part, the New Jersey Coalition of Automobile Retailers, lobbying on behalf of the state’s franchise dealer network, stressed that while they have no intention of driving Tesla out of business, they only want Tesla to play by their long-established rulebook. Association president Jim Appleton is willing to work with the automaker to a point, however:

We hold as sacrosanct the franchise system. There is no resolution to this problem that allows Tesla to operate outside the franchise system forever. But we’re open to accommodations if Tesla can make the case that there’s a reason why they can’t.

Meanwhile, Tesla has a new ally in the form of U.S. Senator Marco Rubio of Florida, who, in his support for the business model, puts him in opposition of New Jersey governor Chris Christie in the run to represent the Republican base against the Democrat nominee during the 2016 U.S. presidential election.

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42 Comments on “Tesla Business Model Reconsidered In NJ, Talking Point In 2016 Presidential Election...”


  • avatar

    Russia and China have fewer regulations than America do.
    I thought THEY were supposed to be the socialists?

    While I don’t own a TESLA, I did purchase enough $28 shares in 2012 to actually care about the company.

    This IS NOT a “Free market” if they aren’t allowed to sell their cars using their business model.

    I understand why they don’t want to sell along side I.C.E. cars for two reasons.

    #1 When I was looking for a Jaguar XJ-L, Fisker was selling KARMA in the dealership in Great Neck, LI. It was a great looking car, but sold next to the Jaguar XJ-L it looked ridiculous, expensive and less of an overall value.

    #2 When I was in College, despite the fact I wasn’t supposed to, I steered customers away from certain brands and makers towards what I felt was a better deal.

    If I was a car salesman tasked with moving TESLA Model S or a Jaguar XF – and didn’t own shares in TESLA, I’d be pushing the XF every single time.

    Obvious conflict of interest.

    • 0 avatar

      Tack on the fact that most traditional car salespeople have no idea how to properly position something like a Tesla against their traditional ICE offerings and the fact that Tesla’s sales volume is extraordinarily low at the moment, it makes sense to allow them a little leeway to get established in the marketplace before they switch to dealer franchise model.

      Heck, both Cadillac and BMW salespeople pretty much flat out told the companies that they had no idea how to sell the latest EV offerings (the ELR and i3 respectively) to customers. If truly volume manufacturers with strong dealer training cannot figure it out, I doubt a low volume automaker could make it work well at the moment.

    • 0 avatar
      mkirk

      “Russia and China have fewer regulations than America do”

      I doubt that the United States has any formal regulation on this matter so that is not really accurate. Dealer franchise laws are state affair. Some states allow it, some don’t. I am pulling for Tesla to be sure, and I have no stock in them. I think they will prevail in the end. Hopefully Ill be in a position to buy one in a few years.

    • 0 avatar
      FreedMike

      1) Russia is definitely “less regulated.” All you have to do is pay off the right Russian mob type, and you can write whatever rules you want…as long as you have the weekly vig ready. And if you don’t, I sincerely hope you have titanium kneecaps…or scarier henchmen.

      2) China executes businessmen who don’t follow their laws. I fail to see how that is somehow emblematic of “less regulation.”

      I’ll take our good old over-regulated U.S. of A any old time, thanks. Ditto for the head of BP, I’d imagine.

    • 0 avatar
      redav

      If you are going to list reasons it doesn’t make sense to sell Teslas alongside ICE cars, don’t forget the real profit generator for dealerships: service.

      The anticipated service schedule for EVs is virtually nil. Why would a dealership essentially cut their own legs out from under themselves?

      • 0 avatar

        redav

        The MODEL S will still need tires and brakes – if you can get older people in who don’t realize that a brake job isn’t supposed to cost $250 per end.

        • 0 avatar
          Luke42

          Regenerative braking really extends the brake pads.

          My wife’s Prius has 155k on a single set of brake pads.

          Brake pads should las even longer on machine with a bigger electric motors.

          Tires, though, well let’s just say I would probably go through tires fast on a Model S.

  • avatar
    Hummer

    Chris Christie is a known RINO/progressive, nothing surprising here. His only position that lines with the Republican Party is his position on unions. I’d rather see a democrat in office than a RINO, that way after doing an inevitably shoddy job, the mainstream press doesnt have anyone to point fingers at.

    • 0 avatar
      Ion

      I think the media will continue to hunt for the needle in the haystack and roast Christie over the GOD and his alleged bullying anyway.

    • 0 avatar

      May be true but I think a very moderate but vocal repub like Christie is the only kind of repub who could win a national election anymore.

      • 0 avatar
        Luke42

        That’s what I thought, too. Before I learned he was defective.

        However, I’m left-of-center (at least according to the conservative pundits), and I do like the moderate pragmatic aide of Christie. Maybe some other moderate pragmatic Republican will emerge and return some sanity and balance to the force.

        I’d even consider voting for a moderate and pragmatic person who I disagree with on wedge issues.

  • avatar
    Sutures

    Other than the wheel barrows of political contributions being generated by Dealers and Dealership Lobbyist groups, what exactly is “sacrosanct” about a franchise system that is largely HATED by everyone except a small percentage of people that think they know how to game the system?

  • avatar
    OneAlpha

    The franchise system is like organized labor – an obsolete relic that was never really a good idea to begin with, just a bandaid meant to address a problem perceived to be larger and more serious. When it finally dies, we should all go dance the Irish jig on its grave.

    I’m not really surprised that Christie is handling this matter the way he is. He may be a Republican, but there aren’t any free-market, small-government Republicans on the East Coast.

    It’s been my experience that Northeastern Republicans and Democrats are like the heroes and villains in a Quentin Tarantino movie – both are criminal scum, but the heroes (in this case, Republicans) are just LESS SO than the villains. The differences between them are a matter of DEGREE rather than KIND.

    You never see the kind of distinct, Bob Dornan vs. Dianne Feinstein differences of political and philosophical opinion on the East Coast.

    It’s always just people advocating varying degrees of statism.

  • avatar
    mkirk

    Chris Christie will jump on anything at this point that allows him to get on TV and talk about something other that the George Washington Bridge.

  • avatar
    zerofoo

    “We hold as sacrosanct the franchise system. There is no resolution to this problem that allows Tesla to operate outside the franchise system forever. But we’re open to accommodations if Tesla can make the case that there’s a reason why they can’t.”

    Translation: Pay us protection money and we’ll let you operate outside this system that we bought and paid for.

    The President of NJCAR is admitting that they have a government enforced lock on the market and that Tesla must bend to their rules if they want to operate in NJ.

    Between the gun thing and this car dealer thing, Chris Christie will never get out of the primaries. For those that haven’t noticed, the Republican party is leaning more Libertarian by the day. RINOs like Christie don’t stand a chance of nomination.

    • 0 avatar
      FreedMike

      No, the GOP is NOT leaning “more libertarian” every day – it’s leaning further to the social-conservative right. And the further it leans, the further away it gets from a truly libertarian ideology.

      Put differently: if Ronald Reagan were still around, would anyone even mention Ted Cruz as a possible candidate with a straight face? I don’t think so. But I bet you that more than a few modern “conservatives” would call Reagan a “RINO.”

      • 0 avatar
        darkwing

        Oh, please — that’s just advanced battlespace prep for Hillary 2016.

        • 0 avatar
          FreedMike

          @Darkwing:

          Really?

          Look at these two Gallup polls and point out the flaw in my thinking.

          http://www.gallup.com/poll/166217/tea-party-favorability-falls-lowest-yet.aspx

          http://www.gallup.com/poll/166763/record-high-americans-identify-independents.aspx

          The Republican Party is shrinking, accounts for about 25% of voters, and the Tea Party, which accounts for about 22% of voters, is clearly in charge. Clearly the Tea Partiers are not centrists, so the net effect is that they’re a bigger piece of a shrinking pie.

          • 0 avatar
            darkwing

            Your conflation of “right” and “social conservative” would be a good place to start. And since that’s such a very popular left-wing talking point, it’s hard to see it as anything but.

      • 0 avatar
        Pch101

        The Tea Party types comprise about 20% of the country. But they’re so delusional that they think that they are the majority.

        They can’t comprehend that they aren’t even a majority within the Republican party, and that they need to cut deals with other Republicans in order to form an effective coalition. They’re a lot more angry than they are bright.

        • 0 avatar

          I don’t think this conventional characterization of Tea Party is near the truth. And no wonder, since it’s formed by their political opponents in the media. I never saw an evidence of delusion, for example. If the infamous 47% are already on the dole, and the urban gentry liberals comprise another 20% or so, that does not leave a majority for the Tea Party. I’m sure Paul can find a media story where they interview a person in the long tail who confirms their worst smears against Tea Party membership. But just about anyone else who’s overtaxed knows the numbers and is not in any delusion.

          • 0 avatar
            FreedMike

            And why would the media report all the whack-job derring-do of the Tea party? Because there are large numbers of Tea Party politicians who just keep on acting like utter fools.

            They’re VERY good at shooting themselves in the foot, because, as PCH points out, Tea Partiers tend not to like professional politicians. The unfortunate offshoot is that a lot of the politicians they DO like are unprofessional. Here in Colorado, they pushed a guy named Dan Maes, who had no political experience, on to the ballot for governor (yes, state governor). The man was a bona fide member of the tinfoil hat brigade, who thought that Denver’s “rent a bike” program was some kind of nefarious plot by communist/European types to take over the city. I am not kidding about this.

            The irony was that the 2010 governor’s election was VERY winnable for Republicans. So was the 2012 Missouri senate race, until Todd “Legitimate Rape” Akin opened his gaping maw and said that women have special anti-rapist-sprem mojo built into their lady parts. That race was HIGHLY winnable.

            So was the Virginia governor’s race last year. But the Tea folks ran Ken Cucinelli, who actually tried to uphold a law banning oral sex in the state.

            And the media gets blamed? For what – writing this stuff down?

          • 0 avatar

            > I never saw an evidence of delusion, for example. But just about anyone else who’s overtaxed knows the numbers and is not in any delusion.

            LOL: “If the infamous 47% are already on the dole, and the urban gentry liberals comprise another 20% or so, that does not leave a majority for the Tea Party.”

            As if the trailer trash regional demographic isn’t quite red.

        • 0 avatar
          FreedMike

          Assuming those figures are correct, and assuming about 200 million eligible voters, then the Tea party types are 20% of the electorate overall, or about 40 million voters.

          That doesn’t make them a majority, but when you consider that about 25% of Americans identify themselves as Republican (see poll below), and realize that a lot of centrist Republicans have, in fact, left the party, the overwhelming majority of the folks left are almost certainly hard-right Tea Party types, and they’re squeezing the centrists, like Chris Christie, out.

          Here’s an interesting Gallup poll on the state of parties in this country.

          http://www.gallup.com/poll/166763/record-high-americans-identify-independents.aspx

          This is the phenomenon that’s skewing the Republicans WAY off to the right. They pretty much ARE the Tea Party today.

          • 0 avatar
            Pch101

            There is a segment of Tea Party types who don’t affiliate with the Republican party, either. They’re unhappy with both parties.

            The business interests in the GOP don’t like the populism, while the GOP establishment doesn’t appreciate their unwillingness to engage in coalition building. The more traditional part of the libertarian wing doesn’t care much for the social conservatism, either (although these days, we have a segment of social conservatises who feign libertarian rhetoric when it suits them.)

            The Tea Party illustrates why we have professional politicians — it isn’t enough to run, it is also necessary to win elections, then cut deals so that some of the agenda can be implemented. They want a one-party dictatorship dominated by their own, and don’t understand that they lack the support to get it.

    • 0 avatar

      This may be true but this means the party will never win a national election again.

  • avatar
    Z71_Silvy

    Keep the door shut and tell Tesla to F-off with their POS car and house of cards business.

  • avatar

    Making sure Christie understands that being a corrupt puppet of narrow money-bag interests is not conductive to his presidential ambitions is probably the best way to make a difference in his position on the matter. So Rubio is doing a public service here, no matter who he is.

  • avatar
    fredtal

    The only reason we have rules protecting dealers is because they lobby heavly to their legislature. The only ones who will speak to the contrary will have contributions from Tesla.

  • avatar
    carguy

    Unfortunately what used to be called free-market conservatism has morphed into something by which the government will do whatever the highest paying pressure group asks them to do.

  • avatar
    05lgt

    A franchise agreement should be between and upheld by the parties involved, not the states. If Ford, TMC, GM etc. have made contractual commitments to not sell directly against their partners, good for them. Having these agreements forced onto perspective competitors who want to follow a different model is an embarrassing lobbyist stain on the sheets of the respective state houses. Now that the lights are on, our supposedly faithful representatives have some explaining to do.

  • avatar
    olddavid

    A talking point in the election? Yeah, because I always vote for the guy who helps some poor billionaire trod on by those nasty big government types at the behest of some nebulous lobby. Keep watching those TV news channels, folks. You’ll get someone’s idea of news – no critical thinking required.

  • avatar
    VoGo

    Is this a real issue? I doubt there is a potential Tesla buyer in Jersey who isn’t 30 minutes from NYC or Philly.

  • avatar
    Ion

    Didn’t Chrysler or Fiat get one of their mall show cases shut down because of laws like this? Why is it OK for Tesla to pick what laws to follow and not the other makes? What stops Tesla from buying their own dealer?


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