Tesla Motors vs. Chris Christie


Tesla Motors on Tuesday accused New Jersey Gov. Chris Christie’s administration of a political double-cross that could hobble the electric automaker’s growth in the Garden State.

The New Jersey Motor Vehicle Commission on Tuesday adopted a rule that blocks the company from selling directly to consumers in the state. In a post on the Palo Alto company’s blog, Tesla said the administration had “gone back on its word,” claiming two top Christie aides had agreed not to move forward with the regulation.

And the company framed its complaint in a way the Republican Christie would understand.

“This is an affront to the very concept of a free market,” Tesla’s blog post read.

But a Christie spokesman rejected the accusations of a double-cross. The regulation, he said, won’t prevent Tesla from seeking legislation to allow direct sales in New Jersey.

“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,” said spokesman Kevin Roberts. “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 from the beginning.”

As Tesla ramps up sales of its luxury electric sedans, the company has found itself challenged in state after state by auto dealer associations who view direct sales as a threat. Tesla refuses to sell its cars through franchise dealerships the way other automakers do, preferring to set up its own nationwide network of stores. New Jersey already has two, one in Paramus, the other in Short Hills.

Tesla CEO Elon Musk argues that traditional dealerships that also sell gasoline-powered cars would be a bad fit for Tesla. After all, one of the company’s long-term goals is to make those cars obsolete.

“This model is not just a matter of selling more cars and providing optimum consumer choice for Americans,” the company argued Tuesday on its blog, “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 the automotive industry.”

Most states have laws that either require or strongly encourage car makers to work through franchise dealerships. In some states, dealer associations have pushed to tighten those laws to keep Tesla out. Tesla, meanwhile, has sought legislation to open more states to their direct-sales model.

New Jersey law, according to the governor’s office, encourages working through franchise dealerships, but contains ambiguous language. So auto dealers backed the proposed regulation to eliminate that ambiguity — and maintain their place in the market.

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