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.
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 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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