New Jersey Auto Dealers Don't Want to Face Tesla

cartechboy writes "It feels like this story is becoming repetitive: X state is trying to ban Tesla stores, or the ability for an automaker to sell directly to a consumer. Either way, it's all aimed at Tesla. Now it's New Jersey's turn as a hearing today could end up banning Tesla stores in the state. Naturally Tesla's displeased with this and is crying foul. A rule change that is expected to be approved today would require all new-car dealers to provide a franchise agreement in order to receive a license from the state. Obviously Tesla (the manufacturer) can't provide a franchise agreement to itself (the distributor). The proposed rule would also require dealers to maintain a 1,000 square foot facility, the ability to show two cars, and service customer cars on site. Tesla doesn't meet that last requirement at any of its galleries, and most of the Tesla stores are located in shopping malls which mean they are smaller than 1,000 square feet. Tesla's arguing the New Jersey Motor Vehicle Commission is overstepping its bounds. Will Tesla be able to defeat this new rule in New Jersey as it has overcome issues in many other states?" (Also covered by the Wall Street Journal.)

Re:Feds...

[mosb1000]

A company based in CA selling cars in NJ most certainly is interstate commerce.

Re:hehe

[Anonymous Coward]

- why don't we just let the free market do what it always does, eliminates bad products.

Yeah, that really worked well with Microsoft.

Re:Why can't they make an independent dealer compa

[Anonymous Coward]

Laws in Texas for example:
http://www.statutes.legis.state.tx.us/Docs/OC/htm/OC.2301.htm#2301.4671

(c) Except as provided by this section, a manufacturer or distributor may not directly or indirectly:
(1) own an interest in a franchised or nonfranchised dealer or dealership;
(2) operate or control a franchised or nonfranchised dealer or dealership; or
(3) act in the capacity of a franchised or nonfranchised dealer.

Re:Feds...

[daninaustin]

You overstate it. It was originally meant to prevent states from taxing commerce moving through their state. Of course the courts have rewritten it out of whole cloth to mean that the feds can regulate anything they want, but in this case there is no way they will intervene. Car dealers are powerful in most states and it's perfectly rational (but bad) that they manipulate the govt into propping up their businesses. Maybe Tesla has deep enough pockets to fight it in the legislatures, but i doubt it.