New Jersey v. the Electric Car – Is this a National Issue?

Last month, March 11th, the New Jersey Motor Vehicle Commission (NJMVC) voted to enforce an age old ruling that prohibited car manufacturers from selling cars directly to the consumer. The target of that act was Tesla Motors Inc.

Tesla, who has been selling cars in New Jersey for some time now, had been doing so on a license granted by the New Jersey Motor Vehicle Commission (NJMVC). On March 11th, on what seemed to be very short notice, a Proposal, PRN 2013-138 was agreed on to reject Tesla’s license renewal, effective April 1st. As of April 1st, Tesla would no longer be able to sell cars directly to the public in New Jersey.

What could have brought about this change of heart?

The New Jersey Coalition of Automobile Retailers (NJCAR) is an automotive trade association that can’trace its roots back to the inception of the auto industry. It stands for fair play in the auto dealer market in NJ and has lobbied the NJMVC to recognize the long established franchise laws in the state and hence, to decline Tesla s request to renew its license to operate its two stores. The franchise laws, enacted decades ago, exist to protect the mom and pop dealers in the state from price undercutting by the auto manufacturers directly. This has merit that can be argued on both sides.

So far, the story seems all okay, (especially if you overlook the oddly short, 24-hour notice that Tesla was given that the NJMVC would be deciding on the renewal application). But, what did NJCAR give as reason to support the application of the law? Well, I along with a dozen or more Tesla owners, owners-in-waiting, enthusiasts and Plug In America’s Tom Moloughney attended the March 11th event at the NJMVC offices in Trenton. There we heard Jim Appleton, president of NJCAR allege that the law existed to “protect the consumer” and, that “Without dealers, the manufacturers would not be motivated to honor maintenance, warranty claims and necessary recalls – the consumer would suffer.” he concluded.

At this point, NJCAR’s position began to crumble badly. A procession of enthusiasts, owners and even reservation holders for upcoming models, each took their turn to give an impassioned plea to the assembled NJMVC members to reconsider. They each cited superlative sales, service and support experiences. Comments and questions came up – “Show me the list of disgruntled owners.”, “I’m embarrassed to call this state my home.” and even, “You’ve taken away my ability to show my children how to do the right thing.”

The public outcry grew. NJ residents seem surprised at how the government was interfering with commerce whilst at the same time leaving the first new American car company in decades to flounder. The dealers, who I’m sure run the gamut from good to bad were being tarred with the same bad brush – it wasn’t complimentary.

The accusation was that Tesla, if given the right to deal directly with the consumer would not be a responsible steward. Let’s take a look at Tesla s recent actions and weigh that up. Recently, there have been two accidents involving Tesla s Model S sedan, each drove over road debris at highway speeds – chunks of metal barriers and a three-way tow hitch from a truck. These caused significant damage to the low-riding Model S – they ripped open the cars battery pack – it’s fuel tank if you will. Each car, alerted the owner to trouble, guiding them to stop and get out both drivers did (though one went back for his belongings) and, in due course, both cars sucumbed to the devestating blows and began to slowly catch fire. Both fires were exhausted by fire crews, safely and under control.

How did Tesla act? Well, – and I confess to being a long-time Tesla owner and enthusiast, so take that into consideration – they denied nothing, they sent out an over-the-air update to raise the ground clearance of all Tesla Model S cars overnight, they contacted the National Highway Transportation Safety Administration and they looked into the issue.

The National Highway Traffic Safety Administration (NHTSA) concluded that there was no unusual risk and that the 5-star rating of the Model S still stood.

Tesla, reworked the design of the battery front-end and introduced titanium reinforcement to ensure that, Model S owners will now be able to drive over three-way tow hitches, concrete pillars and discarded steel car alternators with nothing more than a repair bill. See example here and the full blog post from Tesla here.

I’m purely speculating here but, would other manufacturers do the same? Might they simply fall back on the 5-star rating? You decide.

So how do we make a change?

The residents of New Jersey need a voice in this debate, and Governor Christie must pass legislation to effect a change.

The change begins with two new bills put forth in the New Jersey Legislature – S1898 and A2986 brought by New Jersey Sen. Shirley K. Turner and Assembly Members Timothy J. Eustace and Bonnie Watson Coleman. These bills seek, in unison, to amend the franchise laws to include specific exclusions for companies that only sell electric vehicles. Today, that only fits Tesla but, these bills are intended to support any and all companies seeking to introduce zero emission electric vehicles into our state.

The good news is that the NJMVC has already agreed to relax the April 1st deadline and extend that to the 15th – we still have time to act and to have our voices heard.

The next step is for Governor Chris Christie to sign it into law. We may have a problem with that. On March 6 of this year, at a Conference in Maryland, Governor Christie said “We need to talk about the fact that we are for a free-market society that allows your effort and ingenuity to determine your success, not the cold, hard hand of the government.” Yet less than a week later that cold hard hand of the government came down against Tesla and that free market.

Tesla is the first successful new American car manufacturer in decades. Their cars run on 100% domestic energy, much of which is renewable and completely emission-free. They are exporting cars to Europe and Asia – there is global demand for this American product.

The restrictions imposed in New Jersey go beyond the state, they are of national concern.

If you feel that this is unacceptable, please join us by challenging Chris Christie to support the future:

Act now. Challenge Chris Christie to support the future!

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