Tesla Sales Banned in New Jersey... hopefully not for long!

[Norbert]

Plug In America just sent an action alert to their email list about the Tesla ban in NJ. They're urging everyone to contact Governor Chris Christie and urge him to sign a bill permitting Tesla to sell directly in the state.

[...]

Legislation is being offered in the New Jersey Legislature to reverse this decision.

NJ A2986 & S1898 will prevent Christie from blocking the bridge to our electric future. The bill opens up the market and allows electric vehicle manufacturers like Tesla to do business in the state.

Please use the form or link below to demand that Governor Christie sign the bill!

[...]

Although I agree with the intent, the wording doesn't convince me:

5. (New section) Notwithstanding the provisions of any law,
rule or regulation to the contrary, a motor vehicle franchisor who
manufactures electric motor vehicles may directly buy an electric
motor vehicle from a consumer and may directly sell, offer to sell,
or deal an electric motor vehicle directly to a consumer if the
franchisor is licensed pursuant to R.S.39:10-19.

With this change, Tesla would still be defined as a "motor vehicle franchisor", yet allowed to directly sell an "electric motor vehicle".

How does it make sense for Tesla to be defined as a "franchisor" if there aren't (and won't be) any franchise agreements? That is at the very least misleading to common sense, and would appear to invite further confusion of terms and definitions, and cause future disagreements about which regulations may apply in which way, or not. I can't imagine that would make much sense to lawyers, either.

Also, for example, there doesn't seem to be anything about reversing the changes to N.J.A.C. 13:21-15, which I suppose would be necessary.

So even though I of course agree with the intended solution in practical terms, it seems rather half-baked in wording and thoroughness. As far as I can tell, having read about the previous changes by the MVC.

 

[Pollux]

Per @DJ Frustration,

Sent requested email to Christie.

Thanks for arranging.

Alan

 

[Lloyd]

You can complete comments without being NJ resident!!

 

[Norbert]

Adding to my post above, another problem (which isn't just the wording) seems to be that 39:10-19 (outside the Franchise Practices Act) will reference 56:10-26 (inside the Franchise Practices Act), in a sense that will imply that the Franchises Practices Act would also apply to manufacturers that do *not* have franchises (i.e. those that sell only Electric Vehicles, and only directly). However the rules in the FPA have no meaning for those manufacturers (and Tesla would be one of them), and that would seem to be an unnecessary larger complication.

Just to clarify my understanding of the situation, what I think should happen is this:

1. Reverse the recent changes in 13:21-15, especially the one requiring a franchise agreement for being licensed as a dealer.
2. Add, if really wanted, a rule that a manufacturer may sell cars other than EVs only to franchisees, under a franchise agreement. (While EVs can be sold directly to the customer, without a franchise agreement).
3. Clarify in the Franchise Practices Act that it applies only to operations taking place under a franchise agreement (and that the term "motor vehicle franchisor" applies to a manufacturer only in the context of actually granting a franchise).

 

[Ven Rala]

Just emailed

 

[chickensevil]

Adding to my post above, another problem (which isn't just the wording) seems to be that 39:10-19 (outside the Franchise Practices Act) will reference 56:10-26 (inside the Franchise Practices Act), in a sense that will imply that the Franchises Practices Act would also apply to manufacturers that do *not* have franchises (i.e. those that sell only Electric Vehicles, and only directly). However the rules in the FPA have no meaning for those manufacturers (and Tesla would be one of them), and that would seem to be an unnecessary larger complication.

Just to clarify my understanding of the situation, what I think should happen is this:

1. Reverse the recent changes in 13:21-15, especially the one requiring a franchise agreement for being licensed as a dealer.
2. Add, if really wanted, a rule that a manufacturer may sell cars other than EVs only to franchisees, under a franchise agreement. (While EVs can be sold directly to the customer, without a franchise agreement).
3. Clarify in the Franchise Practices Act that it applies only to operations taking place under a franchise agreement (and that the term "motor vehicle franchisor" applies to a manufacturer only in the context of actually granting a franchise).

To clarify Tesla is not the only one affected by this anymore. There is a EV motor cycle company that is having trouble selling their products in the US due to the franchising issues. So I think what you have outlined in 2 would counter any claims that EVs in general are hard to sell under dealerships while 3 would clarify that you can't be bound by a law if it does not apply to you.

 

[Norbert]

To clarify Tesla is not the only one affected by this anymore. There is a EV motor cycle company that is having trouble selling their products in the US due to the franchising issues. So I think what you have outlined in 2 would counter any claims that EVs in general are hard to sell under dealerships while 3 would clarify that you can't be bound by a law if it does not apply to you.

I'm not sure about the exact meaning of your comment about (2). (I agree that franchises cannot be expected sell EVs optimally. And EVs do need to be sold optimally. Therefore, a dealership should not have to be a franchisee. For EVS, a manufacturer's direct sales store should also qualify to apply for a license as a dealership.)

In any case, since you are mentioning motorcycles, instead of "cars other than EVs", it could perhaps say "motor vehicles, except for electric motor vehicles,". Or something like "motor vehicles, except those with zero emissions,". Depending on what exactly they want in New Jersey.

Good that you mention it, there are at least two companies selling electric motorcycles.

 

[apvbguy]

FYI
Will New Jersey Franchise Law Slow Down Tesla? | NJ.com

 

[Benz]

The New Yorker: "Shut up and deal".

Link: http://www.newyorker.com/talk/financial/2014/04/21/140421ta_talk_surowiecki

 

[dsm363]

Great article. Nice to see traditional press picking this story up.

 

[apvbguy]

The New Yorker: "Shut up and deal".

Link: http://www.newyorker.com/talk/financial/2014/04/21/140421ta_talk_surowiecki

the article starts out with a falsehood and goes down from there, I didn't even bother to read the whole article

 

[dsm363]

the article starts out with a falsehood and goes down from there, I didn't even bother to read the whole article

The article isn't that long. What is the falsehood? They are technically right that you can't buy one in NJ (assuming regulation not overturned) but can buy it from out of state like in Texas.

 

[apvbguy]

The article isn't that long. What is the falsehood? They are technically right that you can't buy one in NJ (assuming regulation not overturned) but can buy it from out of state like in Texas.

people who write articles like this shouldn't be play so loosely with the facts. the article is tainted by his ideology and his statements of facts are anything but, try reading the article I posted for an objective and well written piece

 

[Doug_G]

people who write articles like this shouldn't be play so loosely with the facts. the article is tainted by his ideology and his statements of facts are anything but, try reading the article I posted for an objective and well written piece

I'm a little baffled by your comments. I've come to expect a lousy error rate in media articles, but I don't see huge problems with that particular article. Can you cite specific sentences where there are "falsehoods", and which are "tainted by his ideology"?

 

[dsm363]

Tesla Sales Banned in New Jersey

people who write articles like this shouldn't be play so loosely with the facts. the article is tainted by his ideology and his statements of facts are anything but, try reading the article I posted for an objective and well written piece

What ideology? The article you posted is pro dealership position and attempts to back up their claim.

The NY article wasn't 'loose with the facts'. It's main point that selling cars via dealers is wrong just because they said so is accurate and unbiased. The Dell and Apple examples are valid. You really think Tesla should be forced to sell through dealerships to 'protect' customers?

 

[apvbguy]

What ideology? The article you posted is pro dealership position and attempts to back up their claim.

The NY article wasn't 'loose with the facts'. It's main point that selling cars via dealers just because they said so is accurate and unbiased.

there is little upside here

 

[dsm363]

there is little upside here

Please clarify. Little upside to what? To selling cars directly? Who cares if there is little upside. If the direct sales model truly is horrible and harms consumers then people will vote with their wallets and buy only through dealerships. Telsa will be forced to go that route then because that's the way customers prefer to buy cars in your model. I doubt that will happen if people are given the choice.

 

[Doug_G]

He means "little upside to engaging with you".

 

[TexasEV]

I thought the New Yorker piece was good. I don't see any factual errors in it. It describes rent-seeking without using that term.

 

[Doug_G]

apbvguy is pro-dealer; that's why he didn't like the article. Apparently he can't engage in debate about the merits; he just discounts anything the other side says as ideology.

Personally, I think the article is fantastic. 100% agree with everything it says.