Tesla is known for a unique car sales model in which the company doesn’t rely on a car dealer and directly sells its cars to customers. New Jersey has somehow found this absurd and banned such sales in the state.
Tesla’s business model has raised quite a few eyebrows. Given the fact that car dealers have existed for a fairly long time now, it is understandable that they are a powerful lobby and have a say in policy-making. This may be the reason why New Jersey has now become the third state banning Tesla’s direct-to-customer car sales.
The decision in New Jersey comes from the state’s Motor Vehicle Commission and it effectively jeopardizes the car maker’s business in the state. The company has faced similar setbacks in other states such as Arizona and Texas. Every time as a result of such a ban, Tesla has fiercely criticized local political muscle for unfairly siding with the dealerships.
In the case of New Jersey, Tesla has accused Governor Chris Christie of foul play. The company says that the Governor promised to delay the rule and put it up for debate. However, Tesla accuses, Christie buckled under the pressure of the local dealerships and decided to side with them. For dealerships, blocking the path of Tesla is a critical move because Tesla directly threatens their profits by offering tough competition.
The whole affair is fairly absurd and goes on to show how anti-competition regulations are either not working right in the auto industry or they are being twisted to serve a specific group.