Ahead of today’s earnings call for Tesla Motors, there’s some positively good news to report. The company has opened a few new stores, set up a new Supercharger station, and there may be a ray of light allowing Tesla to continue selling cars in New Jersey.
According to NorthNewJersey.com, Assemblyman Tim Eustace, D-Paramus proposed a bill that would allow Tesla to operate four showrooms in New Jersey so long as the company operated a service center in the state. That seems like an easy feat for Tesla to accomplish, especially given the service center Tesla already operates in Springfield Township.
The article quotes James Brian Appleton, President of the N.J. Coalition of Automotive Retailers (NJCAR), as saying that while he hasn’t closely read the bill he opposes it. The issue isn’t Tesla Motors, but the fact that Tesla wants to flout the Dealership system. If automakers were to be allowed to sell cars directly the Dealership system would break down, and according to Appleton that would destroy customer’s protection against price gouging and other bad practices.
One of the co-sponsors, Assemblyman Louis Greenwald, D-Voorhees, would have let a manufacturer of “zero emission vehicles” sell vehicles directly to the public, so long as their sales were not over 4% of New Jersey’s automotive market.
While this is all a ray of hope, the bills also constrain Tesla Motors. The earlier bill would say effectively that so long as Tesla is small potatoes they can operate as they choose, but as soon as Tesla becomes a major force (4%) they’ll have to abide by Dealership laws. The newer bill effectively says New Jersey will let Tesla play through four stores, but beyond that they have to abide by Dealership laws.
A month ago, Tesla Motors made a deal in New York where that state now allows Tesla to sell cars directly through their existing stores, but any other sales have to happen through a Dealership. At the time I wrote that it looked like Tesla had lost the argument over the question of continuing to sell cars directly. Further, that the Auto Dealers Association(s) would be emboldened by the New York decision, and replicate the deal in other states.
The content of the proposed legislation in New Jersey seems to confirm the idea that Tesla is losing the argument.
At the same time, Tesla Motors is expanding sales operations in California. I’ve received press releases concerning store openings in Walnut Creek and Corte Madera (Marin County). Both are opening on Saturday.
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