After a long battle with the state of New Jersey, Tesla Motors Inc (NASDAQ:TSLA) has won another victory there. A bill that would allow the automaker’s direct to consumer sales model has gone on to the state Senate. Bloomberg Businessweek reports that lawmakers in the Assembly approved the bill on Monday.
NJ Assembly approves Tesla bill
New Jersey’s Motor Vehicle Commissioner ordered Tesla Motors Inc (NASDAQ:TSLA) to stop selling cars in the state earlier this year. Officials said at that time, all automakers must have franchise agreements, which meant Tesla’s sales model wasn’t allowed. However, the ban was temporarily reversed in late March, allowing Tesla to keep selling cars there.
However, Tesla CEO Elon Musk was quick to call Gov. Chris Christie on going against what they had been working toward. He said Tesla had been working with Christie’s office and the Motor Vehicle Commission to make it legal for them to do business there and accused Christie of making a “backroom deal” with New Jersey auto dealerships. The governor had previously said the issue about Tesla’s direct to consumer sales model was one for which lawmakers should find an answer.
Environmentalists back Tesla
Advocates for environmental and businesses rallied at the New Jersey Statehouse this week in support of the bill that allows Tesla Motors Inc (NASDAQ:TSLA)’s sales model. They said the bill would create more jobs in the state. The Federal Trade Commission also backs Tesla’s sales model, saying it’s conducive to competition because it gives consumers more choices.
The bill approved by the New Jersey Assembly does include a provision it hopes will satisfy auto dealers in the state. They have been concerned that Tesla Motors Inc (NASDAQ:TSLA)’s direct to consumer sales model would threaten the dealership model in the state. As a result, lawmakers improved a provision to offer dealers better terms when making arrangements with auto manufacturers.
Tesla stock rallies
Shares of Tesla Motors Inc (NASDAQ:TSLA) surged on Monday, climbing by more than 8% on expectations that the automaker may be able to gain a strong foothold in New Jersey thanks to the bill. At this point, however, it’s anyone’s guess whether the bill will make it through the state Senate.