BREAKING: Gov. Christie, NJ Administration, Double-Cross Tesla In Last-Minute Regulation

With many of its officials and even the Governor’s office under investigation for corruption and malpractice, the state of New Jersey hasn’t really left the political news headlines since the start of the year. From the George Washington Memorial Bridge scandal to the investigation into the blackmailing of the Mayor of Hoboken, much of New Jersey’s political reputation is on the line.

New Jersey is trying to sneak through anti-Tesla legislation today. Time to act?

New Jersey is trying to sneak through anti-Tesla legislation today. Time to act?

Today it’s the turn of California automaker Tesla Motors [NASDAQ:TSLA] to become embroiled in the New Jersey political whirlwind after Governor Christie’s administration  and the New Jersey Motor Vehicle Commission (NJMVC) turns its back on months of negotiation and tries to push through a new regulation that would make it impossible for Tesla to sell cars to customers in the Garden State.

Proposal PRN 2013-138, the proposed regulation which Tesla believes the NJMVC is trying to stealthily approve later today at a meeting in Trenton, NJ at 2pm EDT, would mandate strict licensing laws requiring all new cars sold within the state to be done so via a third-party, independent franchised dealership. These dealerships would be required by law to have no corporate links to the automakers whose cars they sold, making it impossible for Tesla’s existing business model of selling directly to its customers to continue.

The New Jersey Motor Vehicle Commission has power to control any and all regulations over the motor vehicle industry in the state. Since the proposal was tabled Tesla has been working with the NJMVC and the Christie administration to bring this change into the open and have it debated as state legislature. This would remove the change from the hands of the NJMVC but allow for a more transparent process, allow anyone to have their say on the proposed changes and be a better reflection on free market ideals.

In an official statement posted on its website early this morning, Tesla said that it has been working hard with the Christie administration and the New Jersey Motor Vehicle Commission (NJMVC) since 2013 to defend against proposed ‘anti-Tesla’ regulation sponsored by the New Jersey Coalition of Automotive Retailers (NJ CAR).  The result, says Tesla, was that the Christie administration had given its word to delay voting on the regulation until it could be handed through fair process in the state Legislature.

“Until yesterday, we were under the impression that all parties were working in good faith,” Tesla said in its official statement this morning. “This regulation would be a complete reversal to the long standing position of NJMVC on Tesla’s stores…This is an affront to the very concept of a free market.”

Tesla is under sudden attack in New Jersey

Tesla is under sudden attack in New Jersey

Tesla says that while it already has two licences to operate stores in New Jersey, it experienced more than nine months of ‘unexplained delays’ in the issuing of a new sales license. Also, it points out, without any public or even legislative discussion on the proposed law, New Jersey residents have not had any say in the matter.

Worse still, Tesla only found out about the meeting yesterday, despite being the subject of the regulation.

All hope however is not lost: Tesla found out late yesterday that the meeting at which the fate of its future sales in New Jersey will be decided — the Annual Reorganization Meeting of the Board Members of the NJMVC — will take place today at 2pm at the Commission’s headquarters on 225 East State Street, Trenton, NJ. That leaves a little under nine hours for Tesla fans, owners, and EV advocates — as well as New Jersey Residents — let the Christie administration know their feelings.  If you disagree, perhaps it’s time to contact the  New Jersey Motor Vehicle Commission.

This proposed regulation is the latest in a long line of auto dealer association-sponsored bills across the U.S. which seek to destroy Tesla’s innovative and fresh sales approach and, say many, halt its meteoric rise through the automotive industry.

We’ll keep you posted on any developments as they happen throughout the day, and you’ll find Tesla’s official statement on the story below.

Since 2013, Tesla Motors has been working constructively with the New Jersey Motor Vehicle Commission (NJMVC) and members of Governor Christie’s administration to defend against the New Jersey Coalition of Automotive Retailers’ (NJ CAR) attacks on Tesla’s business model and the rights of New Jersey consumers. Until yesterday, we were under the impression that all parties were working in good faith.

Unfortunately, Monday we received news that Governor Christie’s administration has gone back on its word to delay a proposed anti-Tesla regulation so that the matter could be handled through a fair process in the Legislature. The Administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey. This new rule, if adopted, would curtail Tesla’s sales operations and jeopardize our existing retail licenses in the state. Having previously issued two dealer licenses to Tesla, this regulation would be a complete reversal to the long standing position of NJMVC on Tesla’s stores. Indeed, the Administration and the NJMVC are thwarting the Legislature and going beyond their authority to implement the state’s laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers. This is an affront to the very concept of a free market.

Proposal PRN 2013-138 seeks to impose stringent licensing rules that would, among other things, require all new motor vehicles to be sold through middlemen and block Tesla’s direct sales model. This move comes in spite of discussions with the Governor’s departing Chief Counsel Charlie McKenna and incoming Chief Counsel Chris Porrino as recently as January, when it was agreed that Tesla and NJ CAR would address their issues in a more public forum: the New Jersey Legislature. Instead, rather than engage in an open debate on such a significant policy issue, the Administration has expedited the implementation of a new law that the Commission intends to stealthily approve at a meeting in Trenton today at 2:00 PM EDT.

We are disappointed in the actions of the NJMVC and the Christie Administration, which come on the heels of more than nine months of unexplained delays in the issuing of a new sales license for Tesla, despite our numerous requests, calls, and letters. In addition, the NJMVC has also delayed the annual renewal of Tesla’s current dealer licenses without indication of the cause of the delay. The delays have handicapped Tesla in New Jersey, where, without clear licensing procedures and fair enforcement of existing law, we have been forced to delay our growth plans. This is an issue that affects not just Tesla customers, but also New Jersey citizens at large, because Tesla would be unable to create new jobs or participate in New Jersey’s economic revival.

At the same time, neither Tesla nor the taxpayers of New Jersey have been able to participate in any of the analysis or proposed rulemaking. Despite being the subject of the regulation, we were only able to obtain information about today’s meeting since we became aware of the proposed rules yesterday.

We strongly believe it is vital to introduce our own vehicles to the market because electric cars are still a relatively new technology. 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.

We urge the Christie administration to act in good faith and withdraw the proposed amendment, or amend it so that it reflects the true intent of the Legislature and the people of New Jersey.


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  • Gera Quiroz

    Scared now? bastards.nJust go buy in another state. or did they ban that too?

  • Michael Thwaite

    Is anyone else in NJ able to attend? I’ll be there.

    • Michael, we’ll be keen to hear what’s going on from the ground. Please live-blog it 🙂

    • Stephen Pace

      @michaelthwaite:disqus Thanks for going. If you get to speak, one point I’d make is that Tesla can’t make an exception for NJ because if they have even one third-party dealer representing them, it opens them up in other states suggesting that third-party dealers could be hurt. Since Tesla has no third-party dealers, no existing dealer is being harmed. If NJ says they need companies to fund little league teams and bowling leagues, Tesla can certainly do that. Existing dealer laws were put in place to protect franchisees from being disenfranchised, but they are now twisting the law to try to be protectionist. Let them compete in the free market. Good luck!

  • 1. NJ’s political reputation is on the line? Really?!? NJ politics has been like “The Sopranos” my whole life.n2. NJ is a small enough place that Tesla can have showrooms in NY and PA and nobody would have to travel more than 90 minutes to get to a showroom.

    • Michael Thwaite

      The problem would be that, in the absence of showrooms, the general population might start to believe that Tesla was disappearing and that they might not be a good choice.

    • John Tamplin

      Isn’t all of NJ just a bedroom community for NYC anyway? At least all the people I know there work in NYC but can’t afford to live there. Personally, I say any state that doesn’t want the best car sold there should get what they ask for.nnWhat it is really about is Tesla isn’t lining the pockets of corrupt politicians like the status quo. I mean the whole idea of independent dealers for consumer protection is silly – have you ever felt “protected” interacting with a dealer?

      • I have felt many things interacting with a dealer. Much more along the lines of “bent over” or “pissed off for wasting my time” than “protected” from the big, bad car manufacturers.

      • Oluseyi

        *Northern* New Jersey is a bedroom community for NYC. *Southern* New Jersey is a bedroom community for Philly.nnnWestern NJ is a whole other thing, thoughu2026

  • Oluseyi

    This is just the opening volley in the long-awaited clash between Tesla and Dealer Associations around the notion. It’s really got zero to do with the political reputation of New Jersey.

    • ivyespalier (Randy)

      This has been going on for quite a while, long before it happened in NJ

    • hmike

      It has a lot to do with corporate interest in politics however

  • This is an ironic move by the New Jersey administration (NJ). In 1914 President Woodrow Wilson who was previously governor of NJ established the Federal Trade Commission (FTC). Wilson initially designed the FTC to combat against trusts which were being used by businesses to create monopolies to eliminate competition.nnThe FTC was created to review mergers and investigate business practices, especially practices that eliminate any competition. Making sure that monopolies do not exist and that all businesses have healthy competition also protects the consumers because businesses will compete with respect. nnThe only difference in 2014 is that the New Jersey Coalition of Automotive Retailers (NJ CAR) is being used to eliminate competition vs. what business trusts did prior to 1914. The NJ CAR is attempting to become a sole monopoly in NJ. In addition the New Jersey Motor Vehicle Commission (NJMVC) placing interests of NJ CAR ahead of consumers within the state of NJ.nnWhatever the outcome of today’s ruling; the mire actions of the NJ auto coalition and state administration undermines the FTC Act and the Sherman Act. Effectively the NJMVC is seeking to exclude any business the right to sell to consumers unless the business does so through a member business of NJ CAR. These actions (even if not successful) demonstrate an attempt to restrict interstate commerce and eliminate healthy competition by an individual business. Perhaps it’s time to seek federal clarification over a states ability to create monopolies?nn

  • Dudenhofer

    From Germany : I`ll support you. We need innovation in that obsolete car buiseness. nnUSA country of boundless possiblities? I won`t by not only my smart phone or computer directly.nnI only would by a Tesla Motors car- directly.nnNikola Tesla said: “Who`s burning oil for production of energy is a brute.”

  • ACR

    Competing franchised dealers have forced a higher level of attention and service throughout the history of the automobile.nFor Tesla to intentionally spurn the existing network and attempt to go it alone is clearly driven by greed alone.

  • leo smith

    Why should Tesla be exempt from regulations that effect every other car retailer.

  • Jake

    Well an issue for Tesla is if they disallow direct sales to NJ residents, can Tesla directly “sell or vend” electricity to residents in their charging stations? Even though charging is free? That would be a real problem as you need a charging station close to justify a Tesla…