New Jersey governor signs bill to allow Tesla to sell cars direct to customers
19 Mar 2015
New Jersey governor Chris Christie yesterday signed a measure yesterday that would allow the sale of Tesla and other zero-emission cars in the state.
The new law comes a year after the New Jersey Motor Vehicle Commission issued regulations requiring the sale of cars through dealerships.
Tesla CEO Elon Musk had protested the New Jersey regulations last year, as the company markets its vehicles directly to consumers.
Musk says Tesla chose not to sell through franchisee dealerships because most of the revenue of franchises came from gasoline-powered cars, leaving them little incentive to sell electric vehicles.
Under the legislation, companies that sold cars directly to consumers would need to maintain a service facility and report sales figures to the state.
Last year, Christie promised to sign legislation that would allow companies like Tesla to sell directly in the state.
Yesterday he said in a statement, "We're pleased that manufacturers like Tesla will now have the opportunity to establish direct sales operations for consumers in a manner lawfully in New Jersey.''
Diarmuid O'Connell, Tesla's vice president of corporate business development, said in a statement, ''We are proud to tell New Jersey that we are open for business.''
Tesla had sold over 600 Model S sedans in New Jersey, but the state's Motor Vehicle Commission, in March 2014 had in a unanimous vote barred direct sales.
Last year's decision saw Tesla turn its shops into ''galleries'' that referred would-be buyers to stores in Pennsylvania and New York.
Musk, in a blog post last year, criticised the argument that dealers protected consumers from car manufacturers.
''Unless they are referring to the mafia version of 'protection,' this is obviously untrue,'' he wrote on the company's blog addressed to New Jersey residents. ''Consumer protection is pretty much the furthest thing from the typical car dealer's mind.''
The New Jersey Coalition of Automotive Retailers continues to oppose the legislation signed by Christie, saying that Tesla's model created a vertical monopoly and eliminated competition.
''The factory store model advocated by Tesla generates jobs, tax revenue and economic benefits in Silicon Valley and on Wall Street, but not here in New Jersey,'' James B Appleton, the group's president, said in a statement.
