New Jersey lawmaker files bill to permit EV direct sales

Article by Christian Andrei, on April 3, 2014

New Jersey Assemblyman Tim Eustace has filed a bill that would allow any electric vehicle maker to sell theirs electrified offerings directly to the public, skirting franchised dealers in the state. Once passed, carmakers offering EVs like General Motors, Ford, Toyota, Nissan and BMW could start direct sales in New Jersey.

AutoNation Inc. chief executive Mike Jackson has warned that the line-in-the-sand defense of some dealers in some states might hurt the franchise system for all dealers. Jackson refers to Texas and Arizona, where strictest laws against factory-owned stores in the US are being implemented and where Tesla had failed to be exempted from those laws.

Recently, however, there is a big change of heart among politicians, mainly because they are courting Tesla to locate its $5 billion gigafactory. Tesla has identified several states – New Jersey, Texas, Nevada and New Mexico – as possible locations for the facility.

Jackson, who favors allowing Tesla chief executive Elon Musk choose the distribution method for the carmaker, remarked that picking a fight with a company who later announced it plans to build a big battery factory, may lead to unintended results.

Dealers against Tesla's direct-sales model argue that the EV maker is breaking state laws promoting price competition and protecting consumers, particularly in areas of warranty coverage and safety recalls.

Tesla, however, said that its licenses were obtained through legitimate manner and dealers are unfairly blocking a sales model that would not hurt them. The dispute in New Jersey sparked after Tesla accused on March 11 the administration of New Jersey Gov.

Chris Christie's administration of going back on its word to delay new regulations blocking its direct-sales model. Tesla's New Jersey stores are set to lose their license after April 15, but new bills are being pushed to give carmakers the right to implement a direct sales model in the state.

Topics: electric car

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