New Jersey Bans Direct Sale of Tesla Cars After April 1

By Jacob Brown | March 12, 2014
The 2014 Tesla Model S is a very different kind of car with its mega-size battery pack and premium pricing. Dealers might be dumbfounded how to sell such a thing, especially when it doesn't have to be regularly serviced quite like a combustion-engine car. In fact, Tesla's management agrees, going so far to open up Tesla stores in malls and have customers order their cars online for delivery. The state of New Jersey doesn't, however. Passed in the New Jersey legislature yesterday was a bill to curb Tesla's direct sales practices, going so far as to stop all sales as of April 1 unless Tesla wants to set up a franchise agreement. Tesla has two showrooms in New Jersey, according to a report from Bloomberg.
The decision was rushed through the legislature, with lawmakers saying that there would be no public comment until after the vote. Kinda fishy if you ask us. Supported by the New Jersey Coalition of Automotive Retailers, the new laws require at least 1,000 square feet of retail space--enough for at least two cars--and an attached service center in addition to needing an independent dealer franchise. Conceived in the early 1900s, dealer franchise laws were originally formed so that a company couldn't come in and undercut its retailers. Thing is, Tesla has no other companies to compete with since it owns the entire supply chain. Also, electric vehicles don't need to be serviced as often as gas-powered cars. Tesla's service centers are typically detached warehouses where service technicians take cars after picking them up from owners. New Jersey will become the fifth state to ban direct sales of Teslas. About a dozen other states are currently hashing out franchise laws. NJCAR President James Appleton told Bloomberg that the "statute is on the books to protect consumers," he said, and "Tesla’s business model crushes competition." We ask: What other cars out there compete with a six-figure electric car with a 265-mile range? Source: Bloomberg via Fox News