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New Jerseyites can still buy Tesla Model S, despite new ban on Tesla car sales

Tesla Motors sells cars through company owned stores whose real purpose is education.
Tesla Motors sells cars through company owned stores whose real purpose is education.
Tesla Motors

On Tuesday, New Jersey put up a road block preventing Tesla Motors from selling cars in that state. On Friday, Tesla CEO Elon Musk issued a blog post saying Tesla customers in New Jersey will still be able to buy Tesla's cars, still get service on their cars, and laid the blame on anti-competitive antiquated laws governing automobile sales.

Tesla Motors sells their cars through company owned stores, and via their website. The stores act more as education centers than traditional car dealerships, and are usually located in shopping malls unlike regular car dealerships. The problem is the laws across the U.S. require car sales via franchised car dealerships, and make other requirements, like on-site service shops, that result in the shape of "regular car dealerships".

According to Musk's blog post, Tesla had been negotiating with New Jersey regulators over legislation to be brought to the NJ Legislature. Instead, according to Musk, the Christie administration caved in to demands from the "the New Jersey auto dealer lobby" who sought to "protect its monopoly" over the car sales process. As a result "the New Jersey Motor Vehicle Commission, composed of political appointees of the Governor, ended your right to purchase vehicles at a manufacturer store within the state."

What Musk did not say in the blog post is that the laws also, theoretically, protect customers. An automaker with a monopoly over servicing the cars they sell could, theoretically, turn evil and start gouging customers for service. Musk claims this won't happen because Tesla's policy is to not treat service as a profit-making business, but instead a means to build goodwill.

The good news for prospective Tesla Model S or Model X owners in New Jersey is that, after jumping through a couple hoops, you'll still be able to buy cars. Musk wrote: "Our stores will transition to being galleries, where you can see the car and ask questions of our staff, but we will not be able to discuss price or complete a sale in the store. However, that can still be done at our Manhattan store just over the river in Chelsea or our King of Prussia store near Philadelphia."

Tesla is already following this model in other states, like Texas, where local laws prevent personnel from discussing prices.

Because the changes only affect car sales, Tesla will keep their New Jersey service centers open.

In short the changes are an inconvenience to Tesla, and their customers, by complicating the sales process. In the short term customers can just go to the next state over, but what if the New York or Pennsylvania auto dealers associations manage to erect similar bans in those states? In the past, Tesla Motors has said they're looking to take this fight to the Federal level as well.

In the meantime, Musk urged Tesla's fans to contact NJ State Legislators:

There are also two related petition drives on the White House website:

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