Tesla Sales Banned in New Jersey... hopefully not for long!

[VolkerP]

Fret not. Tesla will take care of you, somehow.

Shaken your belief is, young Tesla owner. Fear not. Free market a powerful force it is. The internet! The internet you must use!

 

[gg_got_a_tesla]

Tesla Sales Ban in NJ - please merge.

No Tesla employees showed up at the hearing.

Hmm... that's something unexpected after all the urging Tesla did to make Tesla fans go there. It's almost like Tesla wants us owners and fans do the heavy-lifting for them, marketing-wise and politics-wise.

 

[rjcbox]

Its like preventing me from having my own burger joint because its not fair to McDonalds franchises owners.

and the NJ Department of Health adds this to their meeting agenda less than 24hrs before voting on it, doesn't allow the burger joint owner or it's customers to speak before vote

 

[FANGO]

Hmm... that's something unexpected after all the urging Tesla did to make Tesla fans go there. It's almost like Tesla wants us owners and fans do the heavy-lifting for them, marketing-wise and politics-wise.

They only had about 12 hours notice....plus Tesla was working with the legislature, this was a blindside action by the NJ executive.

 

[Norbert]

The piece on Fast Money just now was spot on. Phil Lebeau clearly stated that the franchise laws are to protect the franchises from a manufacturer from selling directly but since Tesla doesnt have any franchises, they arent hurting anyone which makes the law not pertain to them.

Its like preventing me from having my own burger joint because its not fair to McDonalds franchises owners.

I dont understand what they think isnt "fair" about it. What advantages do Tesla stores have?

Or like claiming that the existence of rental laws (specifying the rights and obligations of landlord and renter) would imply that those who own an apartment can't live in their own apartment. Because that wouldn't be fair to the renters.

The dealer association seems to argue that the franchise laws contain regulations (supposedly meant for the protection of the consumer, not just the franchisee or franchisor), such as that a service center must be within a certain distance of the dealership, which would not apply to a direct sales shop that is not a franchise. And that would be unfair. Meaning, in their view there would be something like a loophole in the law, regarding those obligations. However, simply making up regulations (see my previous posts) that suddenly require a franchise agreement (and pretending that would be existing law) is not a viable way to fix such a loophole. And not fair to Tesla.

And, there doesn't seem to be anything really important in those obligations, that Tesla wouldn't actually address (for example with service centers and service-at-home), as can be seen in Tesla's comments here: http://www.state.nj.us/mvc/pdf/About/9b_Licensing_Service_Final_Adoption_March_2014.pdf .

I think the right thing would be that the dealer associations have to tolerate this rather irrelevant loophole (if that were a meaningful way to describe it), until the lawmakers address any franchisee obligations that should also apply to direct sales shops. I don't see any valid justification to use legal acrobatics to keep Tesla from selling in their shops. Especially since the effect is that the situation for the consumer just gets worse, by any measure. Tesla will still sell directly, but it will be more difficult for both Tesla and the consumer (which seems to be fine with the dealer association).

 

[Username]

Just buy your car from another state?

 

[adiggs]

Tesla probably could ultimately take this to the Supreme Court and wipe out dealer franchise laws across the board on the basis of Interstate Commerce. However, the lack of dealers is a huge competitive advantage that Tesla currently enjoys. Freeing Big Auto from these chains is not the objective.

Right now dealers hamper the competition to Tesla so thoroughly that with Tesla's limited production and temporary lack of an affordable offering for the mainstream it is actually worth the loss of a few States to leave the dealer system hanging around the necks of Big Auto.

The universal dismantling of franchise laws would unleash Big Auto on the path of recovering declining margins on the sale of ICE vehicles. Much better timing to wipe out franchise laws when it becomes absolute that the only battleground for the consumer market as a whole is EVs, playing entirely to Tesla's years of first mover advantage.

The TSLA investor in me agrees with this sentiment.

The part of me that wants to see competitive EV offerings, and widespread conversion of the car industry away from gas to electric doesn't want to see the dealer franchise laws delaying the conversion.

I guess if I look at it right, I win either way!

 

[wcalvin]

You'd think, given the current scrutiny they are under from press and prosecutors, that Christie and Co would punt rather than forcing the issue now, e.g., another year extended.

After all, their action vs Tesla is bound to make people speculate about "Tesla just hasn't paid its dues like the car dealers" and so forth.

I didn't expect them to lack good political judgment and fan the flames. Anything that happens to Tesla is news these days, and they should have known it.

 

[rlang59]

In New Jersey ironically there is NOT sales tax for purchasing EV vehicles. The thing is... You CANNOT buy them in NJ anymore!!! So you would have to pay the sales tax in another state equal to 7%. If it is less than 7% then you must pay NJ the difference and THEN pay taxes for bringing back in to NJ and all of that junk (titles, fees, and so on.) You may refer to this: http://www.state.nj.us/mvc/pdf/About/GU30_Revised.pdf

So in the end it would be way to annoying for any NJ resident to purchase a Tesla vehicle at the moment.

There are agreements with NJ, PA, DE if you buy a car in any of those states from a licensed dealer they handle everything. So in this case the only inconvenience is you may have to go to NY to pick up the car if you live up north. In my case I had to go to PA to pick mine up anyway since it is the closest service center to me, so for those in the south they are already going to PA to get it.

 

[apvbguy]

They only had about 12 hours notice....plus Tesla was working with the legislature, this was a blindside action by the NJ executive.

this goes back to an earlier comment that I made, which was elon is not playing the game properly. if he was he'd have hire a professional trentonite to be his eyes and ears in trenton that person would have alerted telsa to the troubles ahead and could have been a counter to the BS the NJ dealers group was spreading around town,

 

[AlMc]

this goes back to an earlier comment that I made, which was elon is not playing the game properly. if he was he'd have hire a professional trentonite to be his eyes and ears in trenton that person would have alerted telsa to the troubles ahead and could have been a counter to the BS the NJ dealers group was spreading around town,

I disagree. I think Elon is playing this perfectly. He knows that the politicians and NADA types that are aligned are all looked at with suspicion by the general public. He lets the media and some loyal Tesla owners point out the easily picked apart NADA arguments. Free advertising, media attention about "david vs goliath'; 'free market/personal choice vs special interest/'beloved' car dealerships.
He merely sends out a tweet/blog and keeps busy building TM.

 

[MikeC]

this goes back to an earlier comment that I made, which was elon is not playing the game properly. if he was he'd have hire a professional trentonite to be his eyes and ears in trenton that person would have alerted telsa to the troubles ahead and could have been a counter to the BS the NJ dealers group was spreading around town,

If Elon did what the status quo thought was "proper", there would be no Tesla.

 

[SteveG3]

If Elon did what the status quo thought was "proper", there would be no Tesla.

+100

 

[Krugerrand]

I disagree. I think Elon is playing this perfectly.

+1 More than one way to play the game and if you don't like the rules, change them. That about sums up Elon Musk.

 

[SwedishAdvocate]

I disagree. I think Elon is playing this perfectly. He knows that the politicians and NADA types that are aligned are all looked at with suspicion by the general public. He lets the media and some loyal Tesla owners point out the easily picked apart NADA arguments. Free advertising, media attention about "david vs goliath'; 'free market/personal choice vs special interest/'beloved' car dealerships.
He merely sends out a tweet/blog and keeps busy building TM.

He did however get emotional about this issue at the 2013 shareholder meeting.

At 4:17:

 

[brianman]

You'd think, given the current scrutiny they are under from press and prosecutors, that Christie and Co would punt rather than forcing the issue now, e.g., another year extended.

After all, their action vs Tesla is bound to make people speculate about "Tesla just hasn't paid its dues like the car dealers" and so forth.

I didn't expect them to lack good political judgment and fan the flames. Anything that happens to Tesla is news these days, and they should have known it.

It might be a (questionable) strategy to open this wound well before 2016.

 

[100thMonkey]

not sure if folks saw this:

"Chris Christie's Administration Outraged Both Liberals And Conservatives With This 1 Move"

http://www.huffingtonpost.com/2014/03/12/nj-tesla-ban_n_4951571.html

 

[neroden]

To my knowledge the corporate person, Tesla, has not granted rights in its trade name, trademarks, service marks, or other characteristics to any real or corporate person in NJ. If correct, the rules for franchisors should not apply, the exec branch has overstepped, and the judiciary needs to correct it. Get thee to court!

(Put another way, it's not just any manufacturer that is a franchisor, but only those that grant franchises. If one grants a franchise, one cannot also go direct and thereby undercut what had been granted).

You seem to be correct. The NJ code is a mess, so I may have miseed something.

But I skimmed through it and there seem to be NO laws in New Jersey requiring dealers to be franchisees. There are also NO laws in New Jersey requiring motor vehicle manufacturers to be franchisors.

Nor is the Motor Vehicle Commission given the power to make such regulations.

So this is an "ultra vires" act by the Motor Vehicle Commision, and as such void.

Tesla is simply not a franchisor.

The New York State law is similar (though much shorter and clearer) and IIRC the New York State courts have already ruled on this matter, in favor of Tesla.

IMHO Tesla should immediately file a lawsuit to overturn the MVC ruling on the grounds that it is ultra vires. I think this has to be pled against the officials on the MVC in their official capacities, and I forget what the suit type is called. Tesla should be able to get an immediate order prohibiting enforcement of the illegal regulation (I forget what kind of order is wanted).

I'm not a lawyer or even a paralegal. I do seem to be better at law than the incompetent jokers on Tesla's legal team.

 

[rjcbox]

I'm not a lawyer or even a paralegal. I do seem to be better at law than the incompetent jokers on Tesla's legal team.

How are their attorney's incompetent??

 

[aznt1217]

He did however get emotional about this issue at the 2013 shareholder meeting.

At 4:17:

He did get very emotional and for good reason. its an unnecessary hurdle for achieving EV adoption en masse and it's a whoring of democracy. Elon got into this country by pushing tooth and nail and believes in the freedom. Democracy that he believes in is fundamentally broken.

- - - Updated - - -

Hmm... that's something unexpected after all the urging Tesla did to make Tesla fans go there. It's almost like Tesla wants us owners and fans do the heavy-lifting for them, marketing-wise and politics-wise.

it would look worse if employees were there... too much of a direct conflict of interest. The PR is stronger if you have your customers advocate for you.