Tesla: Chris Christie’s administration just blocked us from selling our cars in New Jersey
posted at 8:01 pm on March 12, 2014 by Allahpundit
All I know about this subject comes from a half-dozen stories I read during the past few hours, so I earnestly defer to commenters who know better. But am I right in thinking that this is nothing more than pure, sweet, 200-proof special-interest cronyism at work? The sticking point, as some of you already know, is that Tesla sells directly to the public through its own stores, not through third-party dealerships. Car dealers obviously have a strong incentive to make sure that that business model doesn’t catch on. Solution: Keep Tesla off the market, especially a market like New Jersey where there’s high demand for luxury cars among well-heeled Manhattan commuters. Tesla lobbied Christie’s administration to block a new rule being kicked around by the state’s Motor Vehicle Commission that would require all cars in Jersey to be sold through dealerships. Let it play out in the legislature, they argued, where they’d have more of a chance of defeating a bill along similar lines. Team Christie allegedly agreed; Tesla claims they’ve already been granted two licenses to sell their cars in state. Then, boom — suddenly the MVC turned around and passed the dealership rule. No more Tesla sales in New Jersey starting on April 1st.
The company’s unhappy:
Having previously issued two dealer licenses to Tesla, this regulation would be a complete reversal to the long standing position of NJMVC on Tesla’s stores. Indeed, the Administration and the NJMVC are thwarting the Legislature and going beyond their authority to implement the state’s laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers. This is an affront to the very concept of a free market…
We are disappointed in the actions of the NJMVC and the Christie Administration, which come on the heels of more than nine months of unexplained delays in the issuing of a new sales license for Tesla, despite our numerous requests, calls, and letters. In addition, the NJMVC has also delayed the annual renewal of Tesla’s current dealer licenses without indication of the cause of the delay. The delays have handicapped Tesla in New Jersey, where, without clear licensing procedures and fair enforcement of existing law, we have been forced to delay our growth plans. This is an issue that affects not just Tesla customers, but also New Jersey citizens at large, because Tesla would be unable to create new jobs or participate in New Jersey’s economic revival…
We strongly believe it is vital to introduce our own vehicles to the market because electric cars are still a relatively new technology. This model is not just a matter of selling more cars and providing optimum consumer choice for Americans, but it is also about educating consumers about the benefits of going electric, which is central to our mission to accelerate the shift to sustainable transportation, a new paradigm in automotive technology.
Jersey’s not the first state to spike Tesla. The two others, if you can believe it, are Arizona and Texas, where the auto-dealer lobby is also extremely influential. They haven’t quite kept Tesla off the market there but they’ve done the next best thing — they’ve made it a Kafkaesque hassle for interested consumers to actually purchase a car. Seriously:
Store employees, for example, may not tell visitors how much a Model S costs. They can’t give test drives. They can’t discuss financing, leasing, or purchasing options.
Employees are not even allowed to refer interested people to an out-of-state store. No sales-related activity is permitted…
When we called the Austin store, the young lady who answered the phone would say only that the Model S was priced like similar luxury sedans, and referred us to the Tesla website…
Service centers are not allowed to display the Tesla logo or advertise that they do Tesla warranty work or service.
Christie’s team defends the new rule on grounds that, right now, all cars in Jersey are sold through dealerships and therefore they’re merely preserving the status quo until the state legislature weighs in. Unless I’m missing something, though, there’s no current law stating that cars must be sold that way; that’s why Tesla was able to obtain a few licenses before the NJDVM shut them down. Essentially, the Christie administration had a choice between protecting the current cronyist model or opening up the market up to competition and letting the legislature act to reverse that if it wanted to. It chose cronyism. Or am I missing something? This isn’t a shoddy fly-by-night operation they’re trying to protect consumers from; the Tesla Model S is the highest-rated car that Consumer Reports has ever tested. (“If it could recharge in any gas station in three minutes, this car would score about 110.”) If electric cars and the company’s direct-sales model are a bust, why can’t we let the market tell us that? And why doesn’t ostensibly conservative Chris Christie see it that way?
Actually, it may be the market that eventually sorts this out. Tesla is shopping around for a state in which to open its new $5 billion battery plant. Let the bidding begin.