Tesla Appealing NJ Direct Sales Ban Ruling

Cameron Aubernon
by Cameron Aubernon

With the Ides of April fast-approaching before direct sales come to an end, Tesla filed an appeal with the New Jersey Superior Court asking to overturn a government ruling that banned the automaker from directly selling vehicles to consumers in its two New Jersey stores.

Automotive News reports Tesla proclaimed the action by the New Jersey Motor Vehicle Commission is not legal and harms consumers in the state:

As the [Motor Vehicle Commission] itself recognized when it licensed two Tesla locations in 2012, New Jersey law was clearly written to prevent car manufacturers from exploiting their greater market power to compete unfairly against dealership franchises that sell their cars, something that simply doesn’t apply to Tesla because it has no dealership franchises.

In response, New Jersey Coalition of Automotive Retailers president Jim Appleton felt confident that “the courts will recognize the compelling state interest in regulating the sale and distribution of new motor vehicles,” and that Tesla would fail to overturn the ruling. He added that NJCAR wasn’t out to push the EV automaker out of the state, but only wanted Tesla to play by the same rules as those in the state’s franchise dealer network.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Schmitt trigger Schmitt trigger on Apr 03, 2014

    Isn't this a moot point? What prevents NJ residents from crossing the state line into NY, PA or CT and purchasing a Tesla there?

    • Ruggles Ruggles on Apr 03, 2014

      Nothing keeps New Jersey residents from buying from buying direct and taking delivery from Tesla sites in other states. In TX there are at least 3 retail locations. They call them "showrooms." They can't talk price. A friend in Dallas owns a leasing company in Dallas and is leasing them all along. There are a LOT of Tesla's on the road in TX, considering the brand's overall low volume. While I don't think Tesla should receive any special treatment I think dealers and dealer organizations do themselves a disservice by opposing Tesla's direct sales model. And Elon Musk is able to create an "us versus them" mentality to rallye loyalists. What is amazing to me is that there are many in this country who have never heard of Tesla. If one judged the overall population by these blogs one would think there is a really large battle taking place. It isn't, at least not yet.

  • Jpolicke Jpolicke on Apr 03, 2014

    Why can't Tesla beat the restriction against factory stores by simply saying that no "selling" takes place there? Call them something completely non-retail related, like "discovery centers" or "display exhibit", not "showroom" because of its long connection to traditional dealers. The First Amendment says I can open a storefront and tell you all about my old bathtub if I want. If no offer to sell is made it's not selling. The purchase process is done electronically with a location where it's legal.

    • See 3 previous
    • Wumpus Wumpus on Apr 04, 2014

      My first instinct would be to put a Tesla "non-showroom" in NYC (and possibly one near Philly, not all Jersey is that close to NYC) and cut out the state taxes. I know there is at least one Tesla repair shop in Maryland, but I don't know where the "non-showrooms" are (probably near the beltway due to VA issues). They would have to keep the repair shops (hello, towing costs) out of state as well.

  • BklynPete BklynPete on Apr 04, 2014

    Cheap shot of the day: I feel like Tesla would have no problem if Chris Christie could fit into one.

  • Janet Kirst Janet Kirst on Apr 18, 2014

    A republican governor that is imposing job-killing regulations? Like in Texas and Arizona? States that are open for business? Big believers in the free market? How can that be? Oh right, big Republican car dealer campaign donors trumps ideology. http://www.cdl4sure.com/blog/dealership-vs-direct-sale-cars-in-new-jersey/

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