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Politics

Chris Christie's Transportation Troubles Continue

Tesla Motors has accused the New Jersey governor’s office of not acting “in good faith” in their business negotiations.

(Justin Sullivan/Getty Images)

photo of Marina Koren
March 11, 2014

The Christie administration is creating more car problems.

That's at least according to Tesla Motors, which could lose its right to sell vehicles in New Jersey because of a regulation proposed by the governor's office.

The electric car company wrote in a post on its website Tuesday that Gov. Chris Christie's administration has backed out of a deal that would delay licensing legislation, passing it instead to the state Legislature, which is expected to approve it later Tuesday.

 

The rule would require all new car dealers to sign a franchise agreement with automobile manufacturers in order to receive a license from the state. However, as Stephen Edelstein explains at Green Car Reports, since Tesla is both the manufacturer and distributor of its cars—which means there's no middleman—such an agreement would be impossible.

"The administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey," Tesla Motors explains. In months previous, the company had been "working constructively" with the administration and the New Jersey Motor Vehicle Commission. "This new rule, if adopted, would curtail Tesla's sales operations and jeopardize our existing retail licenses in the state."

Tesla called on Christie to withdraw or change the proposed amendment. The company's existing two locations in New Jersey would be in violation of New Jersey law if it passes. The regulation would be a win for the New Jersey Coalition of Automotive Retailers, which favors the use of a third-party dealer.

A Christie administration spokesman told Business Insider Tuesday that Tesla Motors has it all wrong: The car company is the one trying to skirt legislative procedure, not the other way around. "This administration does not find it appropriate to unilaterally change the way cars are sold in New Jersey without legislation and Tesla has been aware of this position since the beginning," he said in a statement.

Tesla Motors' direct-sales model has faced resistance in other states as well. The company has defeated legislation that would curtail its business in Massachusetts, Minnesota, New York, and North Carolina. In Ohio, car dealers have pushed for regulations that would ban manufacturers from selling cars directly to consumers, and Arizona, Colorado, Texas, and Virginia have banned new Tesla-owned stores altogether.

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