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Tesla Vehicles Could Be On Sale In New Jersey As Soon As July 1st

A Bill before New Jersey lawmakers could allow Tesla to sell their electric cars in the Garden State. The NJ State Assembly Consumer Affairs Committee approved bill A3216 by a vote of 4-0. This piece of legislation requires further advancement in the legislature before it could go to the desk of Governor Chris Christie. This could happen as soon as July 1st, with the bill going into effect immediately. This bill would allow zero emissions vehicle manufactures to operate no more than 4 retail locations to sell directly to consumers in NJ. It also stipulates that the manufacturer operate at least one location for servicing those vehicles.

New Jersey is one of five states in the U.S. that currently bans the sale of Tesla vehicles, and their direct-to-consumer model. This method that has caused concern for auto dealers, including one organization in that state that wants to see Tesla adopt the dealership model. Jim Appleton who is the President of the New Jersey Coalition of Automotive Retailers spoke out on this issue. He said that, “NJCAR is committed to working with members of the Legislature who are exploring options that would allow a start-up electric car maker, like Tesla, a reasonable period of time to ramp up operations (or sales volume) before they conform their business operations to the franchise model.”

Here you have a dealer association wanting Tesla to adopt the franchise model, however Tesla’s founder, Elon Musk is not likely going to do that, ever. In March of this year, Musk spoke on the issue of the direct-to-consumer sales model before a group of shareholders and Tesla supporters and said that, according to polling, “the percent of people in favor of allowing Tesla to do direct sales varies from a low of 86% to ninety-nine. In the case of the 86% there was a concerted effort on the part of the auto dealers to get everyone they could to vote against it.” Musk doesn’t want the dealership model. If this bill for zero emissions car manufacturers passes, it will be a large victory for Tesla and would represent a large pushback on their part towards their goal of using the direct sales model everywhere.

Will Elon Musk ever have a change of heart and take on the franchise model?

 

Comments

This is interesting. Thanks for sharing DS!

Jun 11, 2014

The dealership model doesn't work for Tesla at all. Tesla doesn't subsidize ad buys for dealers because Tesla doesn't advertise. Tesla doesn't make service a profit center because its cars need less service (esp routine service like oil changes, tune-ups, etc that gas cars do). Tesla doesn't do large, out-of-the-way dealerships on the edge of town, but rather does little tiny boutique stores in malls like Apple. Tesla has no inventory unlike dealers, and all cars are built-to-order. So why in the world would Tesla be interested in franchise dealers, but even more, why would franchise dealers ever wanna work with Tesla?

Seems to me that the dealers just don't want competition, and these old laws put into place to protect dealers from manufacturers (long before Tesla existed) turned out to conveniently be usable as a competitive weapon against new entrants like Tesla from coming in and selling their cars.

January 26th (Last Edited: 2016-01-26 04:56:35)

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