Christie Allows New Jersey Agency To Block Tesla Store Sales

March 11, 2014
Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Just as New Jersey governor Chris Christie is struggling to distance himself from one scandal, he’s becoming embroiled in another polarizing controversy—by expediting a rule proposal that would effectively block electric-car maker Tesla Motors’ direct-sales model in the state.

The language of the proposal, which was pushed ahead today and broadly reported just yesterday, appears to force Tesla—or any other automaker intending to use a direct-sale model—to use motor-vehicle dealership franchises instead. It would require that facilities be at least 1,000 square feet, with space to display at least two cars, and that they have the capability to service cars on site.

All of this goes against Tesla’s model, of small, information-oriented ‘stores’ located in high-foot-traffic locations like shopping malls. Buyers complete the sales transaction directly with Tesla, while service depots are located elsewhere.

Analysis, public comment has all happened

Tesla maintains that any discussion over the new rules should go through the NJ state legislature—or be granted a hearing or be allowed to contribute analysis. It also mentions that the move comes after months of discussions with the Christie administration. And, Christie spokesman Kevin Turner confirmed to us, Tesla took part in submitting comment on the proposed rule. 

Furthermore, the Christie office maintains,Tesla was given a full year to work for what it terms "a legislative fix to the problem" as the company was granted licenses—with the governor's office encouraging Tesla to work with the legislature.

But now the clock has run out, and those two retail licenses that the state had issued to Tesla will both would be placed in jeopardy by the new rule, limiting the way the electric-car company could sell vehicles in the state.

“In addition, the NJMVC [New Jersey Motor Vehicle Commission] has also delayed the annual renewal of Tesla’s current dealer licenses without indication of the cause of the delay,” said Tesla, in a release statement.

Tesla added: “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.”

The Christie administration, however, sees it a different way.

Christie: Legislation needed to change this

“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," Governor Christie's office stated to us. "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."

After the decision, Tesla said that it would be calling the two stores in New Jersey “galleries” where sales would not occur—even on computer terminals—on site.

Following efforts in Texas and Arizona, New Jersey is now the third state to have completely blocked Tesla’s direct-sale model.

UPDATED-- Story was updated later in the day to include statement from Christie's office, and to correct some errors—especially, that Tesla had been 'given' a year by the administration.


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