Tesla Appeals New Jersey Motor Vehicle Commission Regulations

Tesla Motors has filed an appeal in New Jersey Superior Court against the Mar. 11 decision by the New Jersey Motor Vehicle Commission’s (MVC) which tightened the way applicants are reviewed for licenses.

The California-based electric car maker is sticking to its guns that it deserved two prior licenses granted in 2012, and was seeking to stall the rules which would reverse that decision, and prevent it from getting more.

It has accused in its appeal the MVC of breaking the law, a 180-degree opposite interpretation previously stated by the Christie administration and New Jersey Coalition of Automotive Retailers (NJ CAR) which said on the contrary, the MVC was upholding the law.

NJ CAR said again today Tesla was never eligible for the licenses in state, and the rule that was discussed publicly October 2013 and settled unanimously last month was only a reaffirmation of pre-existing law.

The update to the MV code on Mar. 11 changed the way the MVC will review applicants, and it was agreed that Tesla merely slipped through somehow and this was to make sure it would not happen again.

Tesla issued the following statement:

Tesla has filed a notice of appeal against the New Jersey Motor Vehicle Commission’s actions changing the standards for auto dealer licensing. The MVC’s actions, which ban Tesla from selling cars direct to consumers through its stores in New Jersey, are not legally permissible and directly harm New Jersey consumers. As the MVC itself recognized when it licensed two Tesla locations in 2012, New Jersey law was clearly written to prevent car manufacturers from exploiting their greater market power to compete unfairly against dealership franchises that sell their cars, something that simply doesn’t apply to Tesla because it has no dealership franchises. The MVC’s decision to reverse itself, done at the behest of New Jersey’s franchise dealer special interest lobby, exceeded its regulatory authority and circumvented both the New Jersey Legislature and the people of New Jersey.

 

A NJ CAR spokesman, in turn spoke on behalf of the the organization’s president, Jim Appleton:

“Clearly, Tesla is not happy with the law in the State of New Jersey and, initially, they simply ignored it by starting up operations here without appointing franchisees,” said Appleton. “When the issue was raised by the regulators, Tesla asked the Administration to ignore the law. When the Administration refused to ignore the law and acted to enforce the prohibition on direct factory sales, Tesla asked the Legislature to change it. Now they are petitioning the courts for relief. This is America. Everyone has a right to petition their government for redress of grievances.”

Appleton added New Jersey’s law is far from an anomaly.

“Tesla’s attack on the franchise system fails to recognize that it has been mandated by law in New Jersey — and at least 32 other states across the nation — because this extensive network of independent franchisees promotes vigorous price competition and protects the public interest in highway safety,” said Appleton. “The Tesla business model, on the other hand, eliminates price competition and limits consumer access to warranty and safety recall services, which has a detrimental impact on public and highway safety.”

Online comments over this issue have overwhelmingly sided with Tesla and some misinformation has been reported here and there.

Appleton said NJ CAR’s attitude is in no way an attack singling out the electric carmaker, or its technology.

“No one wants to see Tesla out of business in New Jersey. But the NJMVC must fairly and equitably enforce the law and Tesla should be required to play by the same rules as everyone else,” said Appleton.

He added a note of compromise the New Jersey auto dealer association is willing to accept over this contentious issue in the public spotlight.

“NJ CAR is committed to working with members of the Legislature who are seriously exploring options that would allow a startup electric carmaker, like Tesla, a reasonable period of time to ramp up operations before they conform their operations to the franchise business model,” said Appleton.

A response to further questions from Tesla Motors was not given.