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Tesla must stop selling cars without a dealer, New Jersey agency rules

  • Tesla (TSLA) will end all electric car sales in New Jersey starting April 1, after it failed to head off a state regulatory proposal making it illegal for it to sell vehicles to consumers without a dealer.
  • The New Jersey Motor Vehicle Commission approved a rule change today that requires auto retailers to have a franchise agreement with an auto manufacturer to be granted a license to sell cars in the state, joining Arizona and Texas by insisting TSLA follow the traditional formula of selling vehicles through licensed dealer franchises.
  • TSLA's VP of business development said today during a conference call that Gov. Chris Christie's administration "abrogated" an agreement to hold off action on the proposal.
  • TSLA fell 1.8% during regular trading, mostly in the final two hours; shares -0.4% AH.
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Comments (107)
  • Esekla
    , contributor
    Comments (3671) | Send Message
     
    Yes, I just commented on it here along with the admistration's apparent ignorance of basic legal principles:

     

    http://seekingalpha.co...
    11 Mar 2014, 05:24 PM Reply Like
  • fact_checker
    , contributor
    Comments (111) | Send Message
     
    I just started a simple petition after I saw the report on here. I don't expect it to make any difference but thought I might as well try.
    http://wh.gov/lVq03
    11 Mar 2014, 06:22 PM Reply Like
  • Stephen Tips
    , contributor
    Comments (411) | Send Message
     
    This is a result of Big Oil and their tight grip on Jersey. Glance at all the petro tanks along the NJ Turnpike and you can comprehend the influence of flammable bituminous hydrocarbon liquid.

     

    The many tangled webs involved with ICE at work. Their objective - crush EVs.
    11 Mar 2014, 06:35 PM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1471) | Send Message
     
    I hope all fans of Tesla and all fans of American made products flood Chris "Crispy Cream" Christie's inbox full of messages protesting this action.
    Pathetic. Who knew Christie was in the pocket of big oil and big auto.
    Just lost a lot of respect for a guy I used to admire. No longer!
    11 Mar 2014, 08:49 PM Reply Like
  • Skeptic84
    , contributor
    Comments (759) | Send Message
     
    I hope the fans of common sense sit back and watch as Tesla spends massive sums to open up the automotive market so that all the other automakers can dissolve their franchise systems as well. Thanks Tesla! The next Porsche I buy will be from a factory store instead of a dealership.
    11 Mar 2014, 09:02 PM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    That makes two of us, and I think his actions today will translate into millions of disappointed never vote for the guy again people. I have to admit that I never thought he would stab all of America in the back after all his goody, goody two shoes talk of how he was so concerned for the American people.

     

    He just stepped on an American made auto company without blinking or wondering where his votes were going to come from next time. I guess he figures he will get in with all the money he will get from big oil.
    11 Mar 2014, 09:48 PM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1471) | Send Message
     
    The established automakers will have a tough time as they already have a franchise system in place. They chose to run their businesses that way. It would cost them billions to unravel it all.
    Tesla has never had such a system and they shouldn't be penalized because they don't want to run the same dinosaur system.
    If the people don't want it they should not be forced to endure it!
    I agree that big auto should be free to drop the dealers too though if they want to.
    12 Mar 2014, 01:35 AM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Ho Joe,

     

    Look, we all know what this is.

     

    But, to predict a voter revolution is crazy.

     

    There are far, far more voters that benefit from this (dealers, mechanics, car sales people, etc.) than the few that might be employed by TSLA in NJ or the few that will buy a TSLA.

     

    So, though a disappointment for TSLA supporters, it is a win for all other manufacturers and their dealers. Given the market penetration of TSLA, the losers are outnumbered 1,000 to one.
    12 Mar 2014, 08:41 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1178) | Send Message
     
    The loser group includes more than just a few Tesla employees. Bypassing the dealership and going straight to the consumer is a huge benefit to the consumer and the manufacturer. If it happens, and I hope it will, the event would be on par with Apple's IPhone breaking the tight grip that the carriers had over the cell phone market. Apple invented a product that far outstripped the capabilities of the cell phones that the carriers were allowing to be sold to their customers. Consumer demand forced the carriers to open up. Can Tesla accomplish a similar coup?
    12 Mar 2014, 09:31 AM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi Lakeaffect,

     

    Let me start out by saying I root for TSLA to succeed. But I do my best not to let my bias interrupt my thoughts.

     

    Your statement that bypassing the dealership is a big benefit to the consumer and the manufacturer is, as of yet, untested theory. It may well be the case, but there are plenty of people that don't see it that way.

     

    I for one, really have doubts as to whether the model that is successful for TSLA is translatable to other manufacturers. Some, maybe, but most, or all, doubtful.

     

    So let's try to bemoan what the "forces" are doing to TSLA, while refraining from casting speculation as if it were fact.
    12 Mar 2014, 09:36 AM Reply Like
  • SA FAN
    , contributor
    Comments (76) | Send Message
     
    Many years ago my brother as a teenager had a summer job as a gopher in the service department of a car dealership. The service manager ordered him to swing a sledgehammer and bend a perfectly good driveshaft. He refused and was fired. A mechanic performed the dirty deed instead.
    13 Mar 2014, 12:00 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5787) | Send Message
     
    And why didn't he report it to law enforcement? I'm sure he could have won in court if the manager did not have a good explanation.
    13 Mar 2014, 12:11 PM Reply Like
  • SharkDude
    , contributor
    Comments (693) | Send Message
     
    Corrupt govt at its best.
    11 Mar 2014, 05:29 PM Reply Like
  • Boris Marjanovic
    , contributor
    Comments (880) | Send Message
     
    Couldn't agree more!
    11 Mar 2014, 11:49 PM Reply Like
  • WallStreetDebunker
    , contributor
    Comments (3054) | Send Message
     
    Did Tesla not pay the Sopranos waste management tax? Fuggetaboutit.
    11 Mar 2014, 05:38 PM Reply Like
  • DanoX
    , contributor
    Comments (2847) | Send Message
     
    Where's are the wing nuts?, Tesla should go to court as long you pay taxes on the sale why do you need a dealer. Make those who believe less government is more stand by it.
    11 Mar 2014, 05:38 PM Reply Like
  • chopchop0
    , contributor
    Comments (3934) | Send Message
     
    They are. I think most libertarian-leaning folks would be outraged by this. Unfortunately, "republicans" have dirtied the term "conservative"
    12 Mar 2014, 08:12 AM Reply Like
  • Stephen Pace
    , contributor
    Comments (545) | Send Message
     
    Many stories reported on this said that Tesla would be closing their stores in NJ, but I think that is unlikely. I believe they'll just convert them to "galleries" like they have in Texas and move forward that way. I'd still like to use NJ as the test legal case, though--I figure this has to reach the Supreme Court at some point, might as well make NJ the example. IMNAL, but having previously approved a dealership license for them and taking it away abruptly as they have, it seems like it might strengthen Tesla's case.
    11 Mar 2014, 05:40 PM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    Dealers they are a Greedy bunch of bastards.......I will never buy a new car through one of them again.
    11 Mar 2014, 09:53 PM Reply Like
  • Boris Marjanovic
    , contributor
    Comments (880) | Send Message
     
    Dealers only make car buying more expensive. Eliminate the middleman!
    11 Mar 2014, 11:51 PM Reply Like
  • wilson1100
    , contributor
    Comments (15) | Send Message
     
    Aren't they doing this in AZ, OH, MN, TX as well? Government corruption and cronyism at its best and certainly not limited to one political party.
    11 Mar 2014, 05:41 PM Reply Like
  • jstack6
    , contributor
    Comments (80) | Send Message
     
    AZ and others want to keep the old last century dealer and sales person setup. Tesla is looking to build a 5 Billion dollar factory and AZ will never get it!
    AZ also imports every drop of oil they burn in 20% or less efficient vehicles to make the Brown cloud over the State ! I drive electric but they drive us crazy.
    11 Mar 2014, 05:57 PM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    No it's across the board, their all corrupt, and it's because greed runs deep, and I hope this case does get to the supreme court.

     

    What bothered me tonight on CNBC Cramer said "We want Tesla, & Netflix to go down, we just don't want them to take the rest of the market down with them". He has always been against Tesla saying it's a "Cult Stock"
    How do ya like them apples???
    11 Mar 2014, 10:03 PM Reply Like
  • microsrfr
    , contributor
    Comments (15) | Send Message
     
    Tesla will not sell in NJ. Might end up at Supreme Court

     

    They cannot afford the dealer mark-up and dealers will not sell them even if Tesla did use them as there is not enough service to make it profitable. They will do everything to switch customers to a conventional car.
    11 Mar 2014, 05:41 PM Reply Like
  • 2puttwo
    , contributor
    Comments (577) | Send Message
     
    Buy the dip! NJ has no skin in the game. No sales tax on Tesla's. It's always politics. Won't mean a thing. I bought mine on line, just like everyone else.
    11 Mar 2014, 05:42 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4375) | Send Message
     
    I did not realize that Arizona was another problem state for Tesla. That makes two of the four states on the gigafactory short list states where Tesla needs a law change in order to actually "sell" the cars in the storefronts.

     

    None of the three states are likely to hinder very many Model S sales because most of the selling takes place online anyway. Tesla can still offer test drives without "selling" the vehicles, and they can deliver vehicles ordered online. They just can't discuss financing or accept cash or checks at the storefronts.
    11 Mar 2014, 05:43 PM Reply Like
  • jgren
    , contributor
    Comments (14) | Send Message
     
    what happened to free market, capitalism ???

     

    NJ is so corrupt - moved out, never looking back!

     

    Buy and drive my Tesla elsewhere.
    11 Mar 2014, 05:44 PM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    Don't vote for fatty
    11 Mar 2014, 10:07 PM Reply Like
  • Miro Kefurt
    , contributor
    Comments (692) | Send Message
     
    When you are fighting 25,000 dealers and laws that are in effect making the Franchise System the only way to sell cars to Public, you will ultimately lose.
    About 25 other States will eventually make it Illegal for TESLA to sell vehicles direct to consumers. With as many "friends" as Mr. Musk has, strange no one of them has any money to open a TESLA dealership in States where it is required by current law. And if they are real friends they will operate the Dealership as a charity non profit for the benefit of TESLAITES everywhere !!!
    There is NO LAW that specifies that any business has to be "profitable" that is unless you are a monopoly that has 30% of the market or more.
    But then one can argue that TESLA is a monopoly in the EV car business and thus would have to show PROFIT. The dealer however does not need to if one chooses to sell vehicles at loss that is their business.
    11 Mar 2014, 05:46 PM Reply Like
  • Stephen Pace
    , contributor
    Comments (545) | Send Message
     
    @Miro: Tesla can't cave on this at the moment because if they have even one third-party dealer anywhere, it will be used as a legal argument that Tesla indeed has third-party dealers that could be hurt by them selling direct. However, Elon has said on quite a few occasions that Tesla might open up to dealerships by Model E. It wouldn't surprise me in the least if they did as you suggest and they only licensed 'friend of Tesla' dealerships in 2017, and then they could still maintain a few flagship 'galleries' in high end malls to help with the educational aspect.
    13 Mar 2014, 09:41 AM Reply Like
  • Humble Value Miner
    , contributor
    Comments (440) | Send Message
     
    Why this? Is USA still libertarian?
    11 Mar 2014, 05:46 PM Reply Like
  • MOTU
    , contributor
    Comments (6) | Send Message
     
    I would like to understand the intent and the rationale behind this change of rule by the New Jersey Vehicle Commission. Where can one read about the reasoning behind this move?
    11 Mar 2014, 05:50 PM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    I read this Governor when over the heads of the State Legislature, a lesson he learned from Obama, when he pushed through affordable care act without having the funds to pay for it. Moral of the story, crooks learning from other crooks.
    11 Mar 2014, 10:23 PM Reply Like
  • jmf3210
    , contributor
    Comments (107) | Send Message
     
    Sleazy Christie crony capitalism.
    I suppose Tesla could still open museums and display centers of electric cars, then provide shuttle access across the GW Bridge to a Tesla, for instance, electric auto dealer.
    Also, I suppose there is nothng illegal in Tesla operating service centers in New Jersey, or do the Sopranos object to that, too?
    11 Mar 2014, 05:53 PM Reply Like
  • a alto
    , contributor
    Comments (216) | Send Message
     
    Hum , I guess racketeering laws don't apply to governments , just citizens . Government now tells you how you can buy things ,rock on tea party !
    11 Mar 2014, 05:53 PM Reply Like
  • Dan Fichana
    , contributor
    Comments (1921) | Send Message
     
    Technically, you can't buy a Tesla from a Tesla "store".

     

    You do all the paperwork and everything with Tesla in CA.

     

    The NJ stores are just information centers.

     

    So what exactly did Christie's little stunt accomplish?

     

    Well- got people POed at him and will not vote for him during a presidential primary
    Lost maybe 50-100 jobs in NJ
    Lost business for NJ dealerships- already heard a few people say they are boycotting buying cars (not Tesla) in NJ and going to another state. (More job loss)

     

    So really this was a lose, lose, lose situation.

     

    Not to mention loses taxable revenue from those lost incomes and they may eventually have to fight it in Supreme court- interstate commerce issue.

     

    I think we live in an Idiocracy sometimes.
    11 Mar 2014, 05:54 PM Reply Like
  • daveruns2win
    , contributor
    Comments (22) | Send Message
     
    Frustrating, but in the real world this does not matter much. People in Texas, Arizona, and other states with similar rules still buy Teslas. You can't really buy a Tesla at a dealer any way. You purchase them on the Tesla web site and they deliver them to your house. That is how I purchased mine. Even if you go to the Tesla showroom and want to buy one, they simply take you to a computer and help you complete the order. Tesla has four showrooms and four service centers in Texas and many others in states with these rules. Car dealerships are so out of step that they don't seem to understand the business model. I think in the short run, this baloney actually helps Tesla, as it really makes them different from car dealers (almost everybody hates car dealers). Of course in the long run as they really try to penetrate the market with lots of different models, it will be an issue. But for now, it does not change much if anything, in my opinion.

     

    Also, Christie lost my vote a few months ago, so this does not change that either. Although I may send some money to other Republican nominees should he manage to get into any local primaries.
    11 Mar 2014, 06:07 PM Reply Like
  • Cliff Hilton
    , contributor
    Comments (2005) | Send Message
     
    @daveruns2win,

     

    We have a Tesla showroom in the Westin Galleria in the Uptown part of Houston. I live a block away and do stop to show some out of town visitors the showroom. Pretty interesting. Let's hope Texas don't start doing "stupid". I live in one of the high-rises. I am allowed to install a 240V charger in my parking space since I purchase my electricity from the wind farms here. I found this out last week.
    12 Mar 2014, 09:15 AM Reply Like
  • Masscreation
    , contributor
    Comments (25) | Send Message
     
    The crazy thing is Tesla doesn't need dealers to sell their cars. Don't people order them online?
    11 Mar 2014, 06:08 PM Reply Like
  • User 22628091
    , contributor
    Comments (2) | Send Message
     
    corrupted NJ government......as an american, I have the right to choose to buy from a dealer/middleman or the manufacture...The government don't have the right to disrupt consumer decisions...
    11 Mar 2014, 06:14 PM Reply Like
  • dogeared
    , contributor
    Comments (24) | Send Message
     
    No big deal! We drove 2 hours to get ours in MA. I'm sure everyone in NJ is within 2 hours of PA or NY
    11 Mar 2014, 06:14 PM Reply Like
  • Dan Fichana
    , contributor
    Comments (1921) | Send Message
     
    Don't forget Delaware too.
    11 Mar 2014, 06:22 PM Reply Like
  • jctrinkle
    , contributor
    Comment (1) | Send Message
     
    Welcome to Pennsylvania!!!!

     

    The New Jersey buyer can purchase their Tesla @ The King of Prussia, PA mall.

     

    If a New Jersey purchaser wants a Tesla - it's right over the NJ/PA border.

     

    At the King of Prussia Mall Tesla is next to the Apple Store which is next to the Louis Vuitton store. How about that - three winners in a row!!!!!

     

    As a resident of PA i ask myself - why is NJ being stupid?????
    11 Mar 2014, 06:14 PM Reply Like
  • just an average guy
    , contributor
    Comments (2) | Send Message
     
    When automobiles were being sold a century ago a dealer was needed. With todays online shopping a dealership is not a necessity. If I put together an order for a car with the options I want and can get and do it online then why should I line the pockets of someone who only gets rich for not doing anything. Tesla only needs service centers for repairs or maintenance issues.
    11 Mar 2014, 06:15 PM Reply Like
  • dcharletta
    , contributor
    Comments (38) | Send Message
     
    I designed my Tesla online, but had to actually see the paint, leather, fabric and dashboard trim samples first-hand at the Tesla store before pulling the trigger, which was easy to do on the PC's at the store. I wouldn't recommend making such a large purchase based on the photographs on the website, but to each his own.

     

    BTW, if you have to leave NJ in order to visit a Tesla store, be sure to avoid the GWB...
    11 Mar 2014, 07:06 PM Reply Like
  • future tesla owner
    , contributor
    Comment (1) | Send Message
     
    Can I buy it in NY (only 30 min from me) or another neighboring state, and then register in NJ where I live.?
    11 Mar 2014, 06:15 PM Reply Like
  • Dan Fichana
    , contributor
    Comments (1921) | Send Message
     
    You can buy it at your home in NJ and have it delivered in NJ.
    You buy it via the internet.

     

    That is how stupid this was. All it did was put a few Tesla employees out of work (maybe).
    11 Mar 2014, 06:21 PM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    It actually may have given Tesla some FREE ADVERTISING in the FREE MARKET i.e. (God Bless the internet) and maybe they will sell a bunch more Model S's who knows? But I don't think this will hurt Tesla in the long run.
    11 Mar 2014, 10:31 PM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1471) | Send Message
     
    Are you sure Tesla will still be able to deliver to you directly in NJ? I thought that is what might have been blocked here.
    Easy enough to get around though. Have it delivered to someone in the next state or freight forwarder on to NJ. Easy.
    Pretty sure they will still be able to have a store and service centres as they do in other states that have banned Tesla "sales".
    12 Mar 2014, 02:37 AM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1471) | Send Message
     
    If I lived in NJ it would certainly motivate me to go out of my way, buy a Tesla, and park it on Mr. Christie's front lawn. Do a few doughnuts on it before I left as well! Not the doughnuts Christie would prefer though!
    12 Mar 2014, 02:39 AM Reply Like
  • mikehart
    , contributor
    Comments (73) | Send Message
     
    We can't expect the auto industry to sit on its hands and not put up a fight. They can't compete with Tesla in the EV space, but they can pull some political strings. I think that if a customer in NJ wants a Tesla, they will get it in a neighboring state as mentioned by others here. Eventually I think these barriers will go away when it becomes apparent that they are not effective.
    11 Mar 2014, 06:32 PM Reply Like
  • Grant Payne
    , contributor
    Comments (326) | Send Message
     
    So couldn't a buyer in NJ simply go into NY, PA, or some other state, buy a Tesla, and then drive it home?
    11 Mar 2014, 08:13 PM Reply Like
  • bwmaki
    , contributor
    Comments (469) | Send Message
     
    Not sure how the tax situation works in New Jersey but States generally discourage their residents for purchasing cars out of state as its big tax revenue. They sock you when you try to title and license it in your state of residence with sales tax/fees.
    11 Mar 2014, 09:16 PM Reply Like
  • Grant Payne
    , contributor
    Comments (326) | Send Message
     
    yeah this is true, i'm thinking people will view this as a negligible impediment to getting their hands on a Tesla if they really want one. Bet sales spike before they close stores in NJ this April, too.
    12 Mar 2014, 02:20 AM Reply Like
  • juicejack
    , contributor
    Comments (88) | Send Message
     
    Stupid action, stupid law. I just wonder how many Teslas have been sold in NJ. Probably not many. The State is very small (minded). Anyone wanting to look at one before purchase need only go a few miles to New York or Pennsylvania. A nice day's outing, and with buying a car out of state, stopping for a meal, etc. NJ gets what it deserves -- nothing.
    11 Mar 2014, 08:36 PM Reply Like
  • JD in NJ
    , contributor
    Comments (1498) | Send Message
     
    I don't know the numbers, but I will say this: NJ may be physically small, but there is a great deal of money here, particularly in the suburbs of New York City. Certainly in my neck of the woods it's a prime market for higher end cars.

     

    That being said, I've seen only a few Teslas around so far.
    12 Mar 2014, 11:07 AM Reply Like
  • jackl1956
    , contributor
    Comments (116) | Send Message
     
    Have you signed the White House petition?

     

    Inform New Jersey that markets should be free for Tesla Motors and for everyone

     

    http://1.usa.gov/1lxAZWp
    11 Mar 2014, 08:59 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5787) | Send Message
     
    In order to present a logical argument against this law, we must find why dealerships started in the first place. Dealerships are there for a reason. So, why did dealerships start?
    11 Mar 2014, 09:11 PM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    Michael Bryant,

     

    To answer your question, they started because we needed a place to get a new car serviced during the guarantee, and especially after when things start to go wrong.

     

    The second reason is there was no internet back then, now there is and cars are sold on it everyday by car dealerships and manufacturers, that's what makes this so wrong, and possibly illegal, so I hope this case does go to the supreme court.

     

    My son bought his Subaru on the internet, he just picked it up at a dealership, and for that they charged him $100.00. He asked what for, they said we had to vacuum and wash it, he said you were going to give me a brand new dirty car?
    The $100.00 fee stands, and he had to pay, these dealers are crooks, there is no other word that describes them best.
    11 Mar 2014, 10:42 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5787) | Send Message
     
    Seems like the problem is not the (TSLA) can't sell directly, but that dealers need to be investigated for unfair practices. Side-steping dealers would cost many many jobs in the long run. It's a double-edged sword.
    12 Mar 2014, 03:42 AM Reply Like
  • Jon P
    , contributor
    Comments (49) | Send Message
     
    Dealerships currently make about 40% of their profit on repairing and maintaining their ICE vehicles. I've had my S for a year and am sending it in tomorrow for an "annual checkup"; I'm sure no maintenance or repairs will be needed. If you're a dealer and have a choice between selling a car that will produce 40% in future repair and maintenance profits vs. a maintenance-free Tesla, which car would you push?

     

    Tesla only makes one model, and the prices are fixed. What purpose would a dealership serve, besides adding a layer of expense? You go in to pick your color and battery size?

     

    I don't think the dealers will prevail. Enough states will allow direct sales of the car so buyers can simply buy the car out-of-state, like Texans do now.

     

    Dealerships, like the internal combustion engine, are dinosaurs.
    11 Mar 2014, 09:22 PM Reply Like
  • just an average guy
    , contributor
    Comments (2) | Send Message
     
    The advent of the internet has changed the way buyers of products do business. You can take a base vehicle and add whatever options that are available to make your vehicle personal. Dealerships do nothing for the savvy buyer.
    Vehicle dealerships have been a way to increase the sales price without adding value. Dealerships will sell you unnecessary options and services that are generally overpriced just to pad the dealers pockets.
    11 Mar 2014, 10:27 PM Reply Like
  • alkmaar
    , contributor
    Comments (30) | Send Message
     
    Down with governments, NJ or elsewhere!
    11 Mar 2014, 10:47 PM Reply Like
  • Greencuda440x6
    , contributor
    Comments (25) | Send Message
     
    The one thing that is gonna bite Christie in this is the statement from Elon Musk that Chistie abrogated an agreement they had between the two. So one more time Christie shows his colors. In any respect this is a simple example of that darn internet scaring the "conventional way" people to death. Either accept it or be left behind NJ.
    12 Mar 2014, 12:17 AM Reply Like
  • surferbroadband
    , contributor
    Comments (2739) | Send Message
     
    Christie is not gonna get the nomination in 2016 and there is nothing he can do to save his fat tail.
    12 Mar 2014, 01:33 AM Reply Like
  • Hoang6
    , contributor
    Comments (321) | Send Message
     
    This is stupid! You cannot sell books without a bookstore in NJ either?
    12 Mar 2014, 02:02 AM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1471) | Send Message
     
    This will hurt Christie more than he thinks. He is supposed to be for free markets. Politicians will bring up his ban on Tesla, the highest rated American made automobile, as completely against everything he claims to stand for.
    I hope he burns for it. He deserves to.
    12 Mar 2014, 02:48 AM Reply Like
  • BTcom
    , contributor
    Comment (1) | Send Message
     
    Here in Toronto, Canada all MERCEDES BENZ dealership are own by the mother company M. Benz Germany. Is it not the same in U.S.? Check it out.
    12 Mar 2014, 04:15 AM Reply Like
  • david freese
    , contributor
    Comments (82) | Send Message
     
    Most real bulls in TSLA are up 300% plus from the bottom. Everybody else is believing their bs. GL all.
    12 Mar 2014, 04:59 AM Reply Like
  • Fel-D-1
    , contributor
    Comments (56) | Send Message
     
    As a Tesla bear, even I find this news disgusting. The stock is way overheated, but the company deserves to be able to sell its cars directly. Christie is the one going up in flames!
    12 Mar 2014, 06:02 AM Reply Like
  • bdarken
    , contributor
    Comments (492) | Send Message
     
    In NJ it's illegal to pump your own gas.
    Makes San Francisco seem like Texas.
    12 Mar 2014, 08:35 AM Reply Like
  • chopchop0
    , contributor
    Comments (3934) | Send Message
     
    nah, they're both pretty kooky, and so is TX For also blocking direct-to-consumer TSLA sales.

     

    I think CO is probably the best state, politically.
    12 Mar 2014, 09:35 AM Reply Like
  • toneroner
    , contributor
    Comments (214) | Send Message
     
    Doesn't Christy have more important tasks than protecting the interest of lobbying? doesn't sound like a free market when you can buy virtually everything else online.
    12 Mar 2014, 08:47 AM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi tonerunner,

     

    Sure, Christie has many other tasks... closing bridges, strong-arming political adversaries and generally playing whatever position casts him in the most favorable light.

     

    I hope you're tongue-in-cheek about politicians protecting lobbyists.
    12 Mar 2014, 09:42 AM Reply Like
  • toneroner
    , contributor
    Comments (214) | Send Message
     
    Hi Reel Ken I'm from Canada and only see headlines. Not trying to troll I just don't understand why a low volume product has created this ruling. I just see this as pressure from big auto who refused to get into EV's and make it work. Instead they had successful programs and shelved them (who killed the electric car documentary on YouTube). Now that Tesla has a market cap the size of GM the big auto is creating barriers. I guess my comment is more about the power of corporate interest. Free market is only allowed if it benefits the old money.
    12 Mar 2014, 11:03 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi tonerunner,

     

    TSLA didn't, as you say, "...create this ruling...."

     

    The law was on the books for many years and Tesla was in violation. What happened is the Dealership Association Group pushed for enforcement of the law.

     

    The "ruling" simply acknowledged that Tesla was in non-compliance.

     

    Tesla was annoyed, because they were trying to get the law changed.
    13 Mar 2014, 06:59 AM Reply Like
  • toneroner
    , contributor
    Comments (214) | Send Message
     
    Thanks for that information reel ken. I must have misunderstood what the intent of the article was. But for someone who can afford them. I'm sure they will have it
    13 Mar 2014, 09:27 AM Reply Like
  • TAS
    , contributor
    Comments (2496) | Send Message
     
    As predicted. Many more states to come.

     

    TESLA should be sold to another company with the infrastructure to physically marketand service the vehicles. The Amazon.com approach will not be adequate in the minds of state regulators to protect what for most folks is their largest investment.

     

    Like it or not, the era of Big Government voted for my a majority of low information folks is here. Cradle to grave hand holding whether you like it or not.
    12 Mar 2014, 08:55 AM Reply Like
  • toneroner
    , contributor
    Comments (214) | Send Message
     
    Or partnership
    12 Mar 2014, 11:04 PM Reply Like
  • AMBIII
    , contributor
    Comments (4) | Send Message
     
    America is a decaying country with no reason to be doing so, except that apathy and the rush people get from control of every aspect of our lives through taxation and regulation, its in the cards folks, more people riding in the wagon than pulling it, prepare folks for the collapse, it is not if it is when. I don't get it, voting is our only power against this and until people put down the x-box and start taking an active role in what these people are shoving down out throats it will not change only get worse. People should be in the streets now or our future as a free nation built on hard work and the promise of a better life for all that are willing to work is failing fast. Look at the American Indian and then tell me the government will take good care of us, what a terrible joke, sorry just stating the facts.
    12 Mar 2014, 09:39 AM Reply Like
  • cyberexplorer
    , contributor
    Comments (8) | Send Message
     
    This is just like saying Amazon can't sell books online, eBay can't sell anything at all in the name of preserving local classified ads, but wait, yes you can sell pot. I wonder what the various government policy makers are smoking. :-(
    12 Mar 2014, 11:14 AM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    HI cyberexplorer,

     

    Unfortunately it's not just like selling books, etc.. Automobiles (and many other products) are in regulated industries(for many very good reasons).

     

    The legal issues run very deep and a simplistic assessment totally misrepresents the real issues.
    12 Mar 2014, 11:51 AM Reply Like
  • User 13732852
    , contributor
    Comment (1) | Send Message
     
    If it is now legal to sell weed without a dealer, but in NJ you must have a dealer to sell a car...What would you expect from a state with no "left turns" nor "self-service" gas pumps?!
    12 Mar 2014, 11:14 AM Reply Like
  • YONSU
    , contributor
    Comments (206) | Send Message
     
    Funny Amazon sells all kind of product online and doesn't need a dealership or showroom in NJ, power groups reign in government with the inclusion of lobbyist, its simple.
    12 Mar 2014, 11:18 AM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi yonsu,

     

    There are a number of items that Amazon is prohibited from selling on-line. Haven't you noticed?

     

    Products in many regulated industries are not sold on line.

     

    You're missing the bigger picture in your simplistic approach.
    12 Mar 2014, 11:52 AM Reply Like
  • JD in NJ
    , contributor
    Comments (1498) | Send Message
     
    Please, Reel Ken, enlighten me with your less simplistic thoughts on why automobiles are regulated into sales only by dealerships. I would very much like to understand this. Can you give me at least the broad outlines of this bigger picture of which you speak?
    12 Mar 2014, 11:55 AM Reply Like
  • YONSU
    , contributor
    Comments (206) | Send Message
     
    ok, so they can't sell hazardous materials, what else? I can see shipping is an issue, so whats the bigger issue, franchisers with car dealerships under law can't do online sales to protect GM or Ford from selling direct, I get it. Tesla has no franchise dealerships so that argument is out. So explain where you stand, or is it too complex?
    12 Mar 2014, 12:31 PM Reply Like
  • Rik1381
    , contributor
    Comments (1420) | Send Message
     
    There are other regulated industries where both independent franchises and corporate-owned retailers co-exist -- gas stations and restaurants, to name a couple. I haven't heard a reasonable argument for why the legitimate interests of car dealer franchises can't be adequately protected the way these other businesses are, through franchise agreements. I don't see the justification for protectionist state laws that ban corporate-owned retailers when private contracts work in other industries.
    12 Mar 2014, 12:38 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi JD,

     

    Sure. Books don't have to be registered and are not subject to various regulations. Cars are subject to many regulations.

     

    For instance, autos must be registered, insured and in some states cannot be bought by unlicensed drivers. They are also subject to inspections and governmental oversight for safety. They must have seat belts, etc.. Some may deem them to be over-regulated, but these are the laws.

     

    Now, that brings us to NJ. The law is that cars must be sold through dealerships. This is not unique to cars. Guns, prescription drugs, chemicals and other items also carry this burden. It is the law.

     

    For instance, in NY , Ebay, Amazon and other on-0line stores are not permitted to sell Guns, except through dealers. To argue that one can buy a book through Amazon, why not a Gun, is not an effective counter to the law.

     

    Now, we can argue that the law is not fair or even appropriate, but arguing the merits of the law means you must argue the reasons for its existence.

     

    For instance, in the formation of NJ's law, consideration was given to protecting the substantial investment dealerships must make. It was determined that it is in the public interest to protect them, in that way.

     

    Now, if you want to argue that the bad outweighs the good, that's fine. But to say simply that one can buy something through Amazon, why not everything through Amazon, is not how an effective argument is proposed.

     

    If you have a problem understanding or accepting this, just say so, and I'll give you as many example as you need.
    12 Mar 2014, 05:15 PM Reply Like
  • Rik1381
    , contributor
    Comments (1420) | Send Message
     
    The sale of some chemicals is regulated, but they don't have to be sold through franchised dealerships.

     

    There's no ban on chemical manufacturers selling directly to end users. Oil companies have sold gasoline directly to motorists through company-owned gas stations, and they also sell through independently-owned franchised gas stations that carry the same name brand as the company-owned stations.

     

    The issue with auto dealerships is the laws banning auto makers from selling directly to end users, not whether the product being sold is subject to regulations.
    12 Mar 2014, 05:27 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    HI Rik1381,

     

    I understand what you say, but must disagree with your interpretation.

     

    I said that many items cannot be sold on-line. That was to refute those that claim that one can buy anything on-line.

     

    By definition, laws cannot prohibit or restrict the use of any item that is not regulated. There is significant public interest behind regulating autos. Otherwise anyone could just buy, sell, manufacture or drive whatever they want, anyway they want.

     

    That brings us to the dealership issue. The NJ law requires dealerships and this is for a reason. If you disagree with the law, then argue the reasons for its existence. But the arguments being put forth in this thread are along the lines of "..why can't I have a cookie, Johnny has one?"

     

    If the law sets the speed limit at 55mph and one is given a ticket for going 65mph, can they argue that many others exceed 65mph and some states allow 65mph? Of course not.

     

    So, if you want to argue the non-dealership reasons, then argue the merits of the non-dealership method, don't just cry foul and hope for a sympathetic ear.
    12 Mar 2014, 05:53 PM Reply Like
  • Rik1381
    , contributor
    Comments (1420) | Send Message
     
    JD's question was " why automobiles are regulated into sales only by dealerships". I have no issue with the sale of new autos being regulated (emissions laws, safety laws, lemon laws, etc.) But I haven't heard a valid reason why a state law would limit these sales to independent franchised dealerships, and ban an automaker from selling directly to consumers.
    12 Mar 2014, 06:24 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Rik,

     

    Just read my previous comment. I gave one of many reasons.

     

    If you need a second and a third and a fourth, I'd be happy to supply them.

     

    Here it is, again......

     

    "...For instance, in the formation of NJ's law, consideration was given to protecting the substantial investment dealerships must make. It was determined that it is in the public interest to protect them, in that way..."
    12 Mar 2014, 07:00 PM Reply Like
  • Rik1381
    , contributor
    Comments (1420) | Send Message
     
    Franchise investments by independent dealers can be protected by contracts enforced through civil court procedures as needed.

     

    State laws can also protect existing franchise agreements.

     

    But some auto dealer protectionist laws go much further than this, and force auto makers to establish franchise relationships even where none currently exist in order to sell their vehicles. This is not about protecting existing investments, since none exist in that scenario. Tesla's direct sales model threatens no dealer's investment because no Tesla franchised dealer exists anywhere.
    12 Mar 2014, 07:09 PM Reply Like
  • JD in NJ
    , contributor
    Comments (1498) | Send Message
     
    Reel Ken,

     

    When you said "many good reasons" I didn't expect that those reasons would come down to "because that's the law".
    12 Mar 2014, 08:01 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi Rik,

     

    Franchise protection laws were enacted before TSLA was founded and pre-dated any thought of on-line auto marketing. So, clearly, that was not, then, perceived as the threat.

     

    If you look at the history, the franchise method was determined to be of value and to be encouraged and protected.

     

    One situation, often cited was the possibility of a manufacturer recall, which could be mandated by Federal or State authorities.

     

    The argument was that consumers needed to have a dealership, close by, to take the car. Therefore, it was deemed appropriate to encourage franchisee as a distribution method. So, the reason for protecting the investment was not just to encourage the investment, but to facilitate consumer interests.

     

    Another reason, often cited has to do with warrantee work. It was determined that the dealership/manufacturer model provides protections that a one-has-it-all system lacks.

     

    It was also often cited, that the territorial nature of many dealerships, pre-empts most manufacturers from entering direct sales. So, allowing direct-to-consumer sales would be disruptive to established dealerships. Some have argued that Tesla would actually be a monopoly-of-one (not sure you can have a monopoly of one, but its a thought provoking concept).

     

    Now, you can agree/disagree with the rationale, or even the sincerity, but it was not just about protecting one franchisee from another.

     

    So, I think one needs to argue that a direct-to-consumer model can accomplish all this, if you want to repeal the law. Keep in mind that we are talking, not about Tesla, specifically, but something that would need to accommodate all manufacturers.

     

    Maybe the law shouldn't have been enacted in the first place, but since it is in place, one should argue the reasons for the law, not is impact on Tesla.
    12 Mar 2014, 08:09 PM Reply Like
  • Rik1381
    , contributor
    Comments (1420) | Send Message
     
    RK,
    This is not just about online sales, it's more generally about direct sales -- a sale directly from a manufacturer to the end user, without being forced to go through a dealer middleman.

     

    There are laws in some states that bar automakers who have franchisees in that state from engaging in direct sales. These laws also allow automakers who have not had franchises in that state to engage in direct sales, since no existing franchised businesses are threatened by direct competition. I believe this is still too protectionist as the franchise relationship should be defined in private contracts and not state law. But it's probably a reasonable compromise position.
    12 Mar 2014, 08:25 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    "Hi Rik,

     

    The evolution is, in my opinion, not fitting to the times. It has always been about direct-to-consumer, until Tesla opened new doors.

     

    People are fighting legal battles to avoid becoming obsolete. I think it's non-productive, as the consumer will ultimately dictate what's obsolete and what's not.

     

    I don't see how you can allow some companies direct-sales and bar others. Establishing criteria would be some battleground.

     

    I favor innovation and think all roadblocks should be removed. "Superstes de fittest"" . But I accept that the "weak" have plenty of "hired muscle" and "hired muscle" seems to work nowadays.
    12 Mar 2014, 08:38 PM Reply Like
  • Dan Fichana
    , contributor
    Comments (1921) | Send Message
     
    Ken
    As an example- Let me say I bought a Bugatti- rare car, no dealerships in NJ, no place to take it. Yet I can purchase it via phone and online via a dealership in another state. Why would that be any different than what Tesla is doing?

     

    There is not much difference.

     

    If you have direct sales for those that do not have dealerships, that is fair and just, If ZAPX came along and said I don't want dealerships, I would have supported that decision too. They are not cross competing with existing dealerships so it is not an economic disadvantage.

     

    Now if a company decided to make a "deal with the devil" decades ago, that is a legacy cost that they will have to bear. Lots of companies make insanely stupid decisions that come to bite them in the end. Short term gain, long term pain. They were aware of it and failed to fight it.
    16 Mar 2014, 04:49 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi Dan,

     

    First, let me state that I think the whole restriction is stupid. I believe in open markets that are regulated against fraud, crime and other similar activities.... I do not see competition as one of those.

     

    That said, there's certainly a distinction between your example and what the law intends. You are taking an independent action to buy a car. That is different than a car company entering into a planned program to market to buyers.

     

    Instead of comparing to such a select example, think of a Korean Car Manufacturer setting up showrooms and on-line such as Tesla has done. That's what the law was intended to restrict... the law preceded Tesla.

     

    So, I think its not about a few people buying obscure cars, but rather express market penetration. It's not so much "you go to them" as in your example, but "they come to you" as in Tesla's case.

     

    I don't see why this is any different than the threat, say, Amazon has to mom/pop stores. If someone can innovate a successful marketing plan, they should be allowed to succeed.

     

    I am reminded of a decades old Car Dealer's ad..."Money Talks, Nobody Walks". Unfortunately, that's what Tesla is up against.
    17 Mar 2014, 10:18 AM Reply Like
  • Dan Fichana
    , contributor
    Comments (1921) | Send Message
     
    Ken,
    a better example would be buying a BMW or VW right off the floor in Germany and shipping it over.

     

    The Korean company should not have to set up dealers either if they did not have any dealers to begin with.

     

    It's kind of odd the way the laws are set up in NJ and Texas is even backwards.
    Essentially in NJ, they are not allowed to give test drives or talk about price- that is it.
    Texas, from what I've heard is Tesla is not allowed to deliver to customers in that state if they sell more than 5,000 units per year.

     

    Essentially the laws serve no purpose but to give potential buyers headaches during the car service.

     

    As a resident of NJ and having bought other cars in NJ before and buying a Tesla, even if I had to drive 2 hours, it would still have been faster than buying the car at a dealership (sounds stupid, but when I went I was at a dealership from 5:30 -11:30 PM, knew the car I wanted, negotiated for 3 hours, paperwork, etc, etc. Tesla, 30 minutes ordering, 5 minute phone call, 30 minutes setting up the NVP, and 1 hr getting a car loan)
    17 Mar 2014, 06:20 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi Dan,

     

    What pushed the Auto Dealer Association this time was Tesla setting up a NJ showroom. That's the problem they were fighting. I think if Tesla just stayed with online, it wouldn't have surfaced.

     

    The Dealers insist if you are going to have a presence "in the state" then it needs to be through an independent franchise. There is no problem with people ordering from out-of-state or out-of-country, its physical presence they want eliminated.

     

    This is simply protectionism, with all the trimmings.
    17 Mar 2014, 06:37 PM Reply Like
  • Dan Fichana
    , contributor
    Comments (1921) | Send Message
     
    Ken,
    The timing is also a little odd.

     

    The Garden state Tesla store was opened October 12th, 2012

     

    Short hills opened November 2nd, 2012

     

    This is where it becomes a problem. They (NJCAR) let them stay open and did not push the issue immediately, but once it became a success, that it becomes a problem for the dealers.

     

    If it was out of principle or protectionism, they had over 1 year to shut them down.

     

    I think they one year and change of being opened unchallenged sets Tesla up for a good precedent.
    17 Mar 2014, 06:51 PM Reply Like
  • Reel Ken
    , contributor
    Comments (4638) | Send Message
     
    Hi Dan,

     

    My understanding is that this has been festering for a while. The NJCAR was pushing and Tesla was working with Christie to over-ride. So it wasn't a last minute thing.

     

    The "surprise" wasn't the ruling, but that it shot dead Tesla's attempts to over-ride. Up until the ruling was released, the thought was that Tesla would prevail.

     

    I don't know when it all dates back to, but it's unlikely it was too recent.
    17 Mar 2014, 07:33 PM Reply Like
  • marshgre
    , contributor
    Comments (673) | Send Message
     
    I purchased my current car at an auction - saved thousands. I bought my truck from an importer that brought it in from japan - locally available vehicles did not meet my needs.

     

    I don't think I'll bother having a dealer try to "add value" to any of my future automotive purchases. After all Walmart sells floor mats for $15 rather than $150.
    12 Mar 2014, 11:20 AM Reply Like
  • marshgre
    , contributor
    Comments (673) | Send Message
     
    Does the governor of New Jersey happen to know the mayor of Toronto. Mr ford likes dealers too.
    12 Mar 2014, 11:55 AM Reply Like
  • kills hot
    , contributor
    Comments (6) | Send Message
     
    You have made a precise argument as to why this law should not apply to Tesla. The law was created to protect dealers who make a substantial investment in their business from subsequently being undercut by the manufacturer "they represent" should that manufacturer decide to set up shop later next door. OK, maybe there is justification in such a law as it is unfair for a manufacturer to "muscle out" a dealer who developed the business for them. Although many industries deal with this without government intervention which I feel is a better structure.

     

    The point is, in the Tesla scenario, there has never been a dealer network representing them so there is no harm to dealers (how can there be when they are non-existent) by Tesla selling direct. It is mostly shameful that politicians (like the folks in NJ) don't have the intelligence to understand this distinction.

     

    I also find it a blatant lie by the dealer association that they are protecting the best interests of the consumer. They are only trying to protect themselves and restrain trade. I own a Tesla model S and service from dealers for the various ICE cars I own is pathetic in comparison to the exception treatment from Tesla.
    12 Mar 2014, 10:07 PM Reply Like
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