Tesla kicked out of New Jersey by Chris Christie administration
Zachary Shahan/CC BY-SA 3.0
Update: The Christie administration has now passed the rule making it illegal for Tesla to sell its vehicles within the state of New Jersey. Rather than bring the issue to the New Jersey Legislature, this has been done through a surprise executive order. Long live free markets and democracy, right?
From what I've seen, New Jersey Governor and likely Republican presidential candidate Chris Christie is quite good at convincing people of things that aren't true. Now, it seems that Christie himself hasn't met with Tesla representatives about anti-Tesla legislation in the state, but people from his administration have been meeting with the Tesla crew and they seem to have just pulled a Christie switcharoo.
Quickly, a little backstory: Tesla sells its vehicles through dedicated Tesla stores and galleries rather than conventional auto dealerships because selling electric vehicles would go against the business model of auto dealerships, and such dealerships would do an absolutely horrible job of selling Tesla's vehicles. (I've read countless customer horror stories showing examples of this with the big-auto electric cars that are on the market.) As part of that, "Tesla's philosophy is to not make profits on servicing its cars (which aligns its interests with the EV owners -- they now have incentives to make cars that don't break down)," but that approach severely cuts into the profits of the conventional dealership model. So, Tesla sells its vehicles on its own. But this threatens an entire monopolistic middle-man dealership model that was created for a different time and could use a scrapping. As a result, auto dealership associations around the country have been trying to block Tesla from selling its vehicles in their states. Texas, ironically, is the most notable state that is blocking this free-market option, despite massive popular support for a less regulated system that lets Tesla into the state.
Back to the story of the day: New Jersey is one of the latest states in which the auto dealership lobby is pushing to kick Tesla out of the state. Tesla, working with Christie's administration, hasn't been asking for the dealership association to be ignored. Nope, it has simply being asking that the topic go through the normal legislative process. Tesla thought Christie's administration was on board with that logical request, but news all of a sudden is that Christie's crew is going to push through a rule kicking Tesla out without due legislative process. From the Tesla Motors website:
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.
Just weeks after discussions with Christie administration, in which the plan was to bring the topic to the New Jersey Legislature, the Christie administration has actually expedited a rule that would require Tesla to sell its cars through a middleman.
We'll see what happens. Unfortunately, things don't look very hopeful. Tesla has had a difficult time getting anything positive from the Christie administration in the past year, and this sudden turn in the story was sprung on Tesla in a very impersonal way.
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.
Despite promises to the contrary, Tesla and citizens of New Jersey were given notice of today's meeting with less than 24 hours notice.
Let's hope that the Christie administration comes around at the last minute and withdraws the proposed amendment, but I can't say that I'm hopeful.