In March, Tesla Motors Inc (NASDAQ:TSLA) sharply criticized New Jersey Governor Chris Christie’s administration after the state banned the company’s direct sales model. The EV maker accused Christie of cutting a “backroom deal” with the auto dealer lobbyist. Christie told corporate leaders at the Delivering Alpha conference that Tesla’s criticism was “complete crap.”
Christie allowed Tesla to operate outside the law for a year
The San Francisco-based automaker has two showrooms in New Jersey. But the company can’t sell vehicles directly to customers in the state. New Jersey law, passed in 1970s requires automakers to sell vehicles through the traditional dealership model. Gov. Christie said at the conference that a previous governor had signed the law. Then came Tesla with its new direct sales model,
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Christie said the company operated completely outside the law for a year. The administration looked away to allow the automaker to do what it was doing. During that period, the Governor told Tesla Motors Inc (NASDAQ:TSLA) that the company needed to “get together with the legislature.” He told Tesla that he won’t enforce the law vigorously, giving the company plenty of time to work with the legislature to get a law to the Governor’s desk. The company didn’t do anything for a year, and the administration couldn’t tolerate it any longer.
Tesla makes some progress in NJ
The Elon Musk-led company says that the old-fashioned dealership model doesn’t work with electric vehicles. That’s because dealerships make a big chunk of their money from maintenance, and Tesla cars require far less maintenance than traditional vehicles. Moreover, electric vehicle is a new technology, so the company needs to educate customers.
Anyway, Tesla Motors Inc (NASDAQ:TSLA) has made some progress in New Jersey in the last couple of months. New Jersey’s Assembly Consumer Affairs Committee has passed a bill that would give Tesla the right to sell cars directly to consumers through two of its existing stores, and open two more stores in the state. However, the bill is yet to be passed by full Senate.
Tesla Motors Inc (NASDAQ:TSLA) shares fell 0.55% to $215.97 in early trading session Thursday.