After failing to win a legal battle in New Jersey, Tesla will no longer be able to sell its Model S electric vehicles directly to consumers within the state starting on April 1. Tesla attempted to fight back against new regulations that had been proposed but the New Jersey Motor Vehicle Commission (NJMVC) eventually ruled to ban Tesla stores just as Texas and Arizona have already done.
Depending on the state, Tesla has been active in regulatory discussions and has blocked this type of proposal, while in some cases it has actually helped to change previous regulations that would have prevented Tesla from opening dealerships.
The only option that Tesla now has if it would like to keep its locations open in New Jersey would be to revert the stores to galleries, but no car sales would be allowed and layoffs would still be inevitable.
This is at the very least disappointing, if not outright outrageous what’s going on with our business in N.J. right now, – Diarmuid O’Connell, VP of business development, Tesla
According to Tesla, it had only found out about the meeting 72 hours before it took place, leaving the company little time to speak up for itself and attempt to stop the ban from passing.
Clearly, a decision was made rather abruptly and certainly without any consultation with us…There are a couple levels of bad faith and surreptitious behavior. – Diarmuid O’Connell
The primary complaint that Tesla has continued to have during this process is that the NJMVC decided not to put up the rule change to a public vote and instead chose to simply write it into law.
In order to actually fight the ban now that it has all but become a reality, Tesla could technically make the case that it violates the US Constitution’s Commerce Clause which gives the power to regulate interstate commerce to the US Congress. However, prior to today’s decision, it did not seem likely that Tesla would go that route.
We’ve pursue if we have to. We don’t want to be in these dust-ups. We are fundamentally an engineering company. We are not interested in legal or legislative strategies as a preference. – Diarmuid O’Connell
Summary: New Jersey has decided to ban any direct sales of Tesla cars within the state. This will require Tesla to close its two NJ stores and layoff employees.
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