Is Tesla Getting SCREWED? NJ Becomes The THIRD State To Ban Direct Sales To Consumers

Though Tesla has been selling its wares at two New Jersey locations for approximately a year now, it turns out the company is going to have to shut its retail operations in the Garden State. Jeez, and with the state being known for that nickname, one would assume it would be open to an electric vehicle automaker.

According to dealership associations, Tesla's business model of skipping the middleman removes price competition in the market. Oh, and it's against New Jersey state law. That can't be debated.

Do I feel sorry for Tesla for starting up two retail stores without trying to change the law? No. Though Tesla claims it thought it was working with several parties in "good faith" that doesn't seem like good business because anyone knows that "good faith" isn't a reality when it comes to dollars and cents. I do think it's a bit slimy that Tesla was not provided with 24 hours notice of the meeting that went down yesterday.

It is a bit of a bummer to see its direct sales model get another bump on the noggin because, let's be honest, if franchised dealerships were so good to customers our sister site — DealerRater.com — wouldn't exist. One can argue dealers provide price competition, but they also rip people off everyday.

That said, we're a bit curious what YOUR take on this is: is Tesla getting screwed?


**Shopping for new wheels and looking for the BEST dealer to take care of you? Point your browser to AutoSpies' sister site, DealerRater.com, to get the treatment you deserve!

...Tesla's practice of selling its Model S electric sedan directly to consumers is unusual and has run into problems before. Chief Executive Officer Elon Musk has tangled with dealership associations in various states including Texas and New York.

The change agreed to by the New Jersey commission Tuesday, "simply conforms their regulation with state law," said Jim Appleton, the president of the New Jersey Coalition of Automotive Retailers, also known as NJ Car...

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iamdabest1 - 3/12/2014 10:24:29 PM

+1 Boost

considering this is a different type of car, and its not like like people are dying for this thing, i dont see why it cant be sold in limited places.

TheSteve - 3/13/2014 1:56:41 AM

0 Boost

Article: "...According to dealership associations, Tesla's business model of skipping the middleman removes price competition in the market..."

So in New Jersey, it's against the law for someone to figure out how to do something better? We must cater to the lowest common denominator? Wow, talk about anti-competitive laws!

jeffgall - 3/13/2014 5:51:31 AM

+3 Boost

So much for Chris Christie being a conservative. Yes, let's protect the antiquated dealer association model.

Agent00J - 3/13/2014 7:08:52 AM

+2 Boost

The amazing thing about a Free Market society is that people will figure out a way around the stupid rules being forced down the throat of Tesla by others who are threatened by their sales model. The simple solution is to simply buy the car in another state and have it transported to NJ. Of course, the people/staff/employees etc. who help execute a sale that way in the other state stands to benefit while NJ residents who could've worked at Tesla can sit home and reflect on how lucky they are to have a dealer group "looking out for the consumers best interest".

-00J

mre30 - 3/13/2014 7:53:03 AM

+2 Boost

Elon Musk should use his oratorical gifts and get out in public to push that these stupid dealership laws get changed. They are clearly antiquated, but they do happen to still be on the books as laws in many states.

These laws came up during the GM/Chrysler bailouts and were impediments to closing Oldsmobile, Saturn, Saab, Pontiac, and Plymouth. Basically a way for locally-owned dealers to extort money from the corporate parent.

Now that the "exploding Tesla" crisis has abated, Elon should take to the airwaves about this dealer issue. He should be the leader in getting these laws repealed, since the Big 3 don't have the guts to do so.

MattDarringer - 3/13/2014 6:59:02 PM

0 Boost

Direct sales to consumers = price fixing.

Tritonx - 3/14/2014 2:31:12 AM

+1 Boost

holy crap. I guess Apple can't have apple stores then. Not enough competition that way. You gotta go to best buy or walmart to buy apple stuff. Totally hypocritical to limit this logic to only cars. I can't think of any other product I buy where the manufacturer is precluded from directly selling to its consumers.

MattDarringer - 3/14/2014 8:53:09 AM

+1 Boost

Apple products are NOT sold only by Apple stores.

LexSucks - 3/14/2014 10:31:10 AM

-2 Boost

So much for the "Free Market". BTW It's your republican buddies that made this possible. Some Texas car dealers bitched and moaned about Tesla and complained to their congressman. And Tadaa.... Tesla is being limited where they can sell cars, while no such restriction is in place for other car makers. So much for the "Free Market"? Such Hypocrites. It's all about who lines their pockets with $$$, the all mighty dollar.

LexSucks - 3/14/2014 4:50:34 PM

0 Boost

Guess you've never heard of the Koch Brothers? And all the millions of dollars that they funnel to the GOP. Not to mention Sheldon Adelson. I could go on but why bother. Amazing the Hypocrisy that you guys exhibit.

I didn't know about those specific dealer laws. But they do need to be evaluated. Thanks

HughJass - 3/14/2014 8:53:02 PM

+1 Boost

Since its the law to have someone pump your gas, that's a lot of people who might be put out of work if Tesla's 3rd Gen car takes off.

Tesla can't setup corporate dealerships where every sales person works for Tesla, not some local fat cat? Since Tesla's don't come with much and everything is an option, can't they make it up by giving the sales force a bigger cut of profit from the options? Most are bought loaded anyways.

What if they have "showrooms" and let people setup an account, then go home and order the car online to be delivered to the showroom?