Tag Archives: New Jersey

Chris Christie sells out to the car dealers and hurts consumers, blocks Tesla’s direct sales model

tesla cc cc

Why in the world can’t I go to Toyota.com, pick out a new car, customize it, do the financing if need be, and then have it delivered to me in a couple of days? It would save me time, money, and hassle.

The answer: Car dealerships.

They don’t want you or me buying directly from the company even though the cost to me and you would likely be considerably lower. Dealerships make their money on the markup and they are not interested in just closing up shop even if their entire business model is completely outdated. So the dealers have gone to the state governments in an effort to ban direct sales. Sadly for us they have been successful in some places.

Take for instance the regulations New Jersey just approved.

(From The Wall Street Journal)

The New Jersey Motor Vehicle Commission approved a rule change Tuesday that would require auto retailers to have a franchise agreement with an auto manufacturer to be granted a license to sell cars in the state.

Tesla owns its stores, selling directly to consumers, something that dealer groups in New Jersey and other states have fought, primarily through legislation.

A Tesla executive said the move amounts to a “death penalty” to its auto retail outlets in New Jersey and could encourage regulators in other states to follow suit.

The rule, which deals with the licensing of auto dealers, would require that a person have a franchise agreement with an auto manufacturer to be granted a license.

Tesla’s vice president of business development, Diarmuid O’Connell, said during a conference call Tuesday that New Jersey Gov. Chris Christie’s administration “abrogated” an agreement to hold off action on the proposal by the state’s Motor Vehicle Commission.

Click here for the article.