Will New Jersey Make The List For Tesla's New Battery Plant?
There’s no doubt that the State of New Jersey made Tesla (NASDAQ: TSLA) a little angry. The company made that perfectly clear in a blog post in response to a New Jersey’s ruling Tuesday.
Here’s the story.
Tuesday, the New Jersey Motor Vehicle Commission voted to ban the direct sale of automobiles in the state. This means that any company wishing to sell a car within the state’s borders has to do it through the traditional dealership model—the model that consumers love to hate. Every other major manufacturer sells through dealerships already, but Tesla not so much.
Tesla, not one to do things the old-fashioned or traditional way, tried to cut out the middle-man and sold directly to customers -- but the New Jersey commission said that without an act from the state’s legislature, that practice wasn’t allowable.
As a result, Tesla will stop selling cars in New Jersey on April 1, 2014.
This is a thorn in the side of billionaire founder Elon Musk. New Jersey has a healthy luxury car market and being kicked out of the state is certainly a blow for Tesla.
In a blog post on the company’s website, Tesla didn’t bother to use the normal muted, politically correct language that other companies would use after a ruling doesn’t go their way.
The blog post included lines like “Governor Christie’s administration has gone back on its word to delay a proposed anti-Tesla regulation so that the matter could be handled through a fair process in the Legislature,” and “The Administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey.”
It’s clear that Musk isn’t happy, especially after publicly accusing the state of not having “clear licensing procedures” and unfairly imposing current laws, but New Jersey isn’t the first state to give Tesla the boot.
Texas and Arizona have already officially banned Tesla’s sales model, but the auto community has pointed out an interesting coincidence. Tesla plans to build a $5 billion battery plant somewhere in the U.S that would create 6,500 jobs. States are fighting for the plant, but two of the finalists include Texas and Arizona. Other states include New Mexico and Nevada.
Both states have said that they would be happy to have the factory but they have no plans to revisit their ban on Tesla’s business model.
Will New Jersey make the list? Not likely.
Disclosure: At the time of this writing, Tim Parker had no position in the company mentioned.
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