Tesla's battle with auto dealers goes on. Today, the New Jersey Motor Vehicle Commission is expected to vote on a proposal that would require car manufacturers to enter a franchise agreement in order to sell their vehicles. According to reports, the proposed rule change would also require car companies to "maintain facilities of at least 1,000 square feet with room to display two cars."
Tesla, of course, generally eschews the car dealership model and instead opts to sell its vehicles directly to consumers online. Sometimes it opens showrooms, where potential buyers can test drive vehicles like the award-winning Model S. Only these spaces are typically much smaller than New Jersey's proposed 1,000-foot mandate, and tend to operate in places like high-end shopping malls.
If the proposed rule change is signed and passed when the commission votes on it this afternoon—as it is expected to—New Jersey would become the fifth state to essentially ban Tesla sales, alongside Arizona, Colorado, Virginia, and Texas. This despite evidence from the Department of Justice's antitrust research group, which found in 2009 that state bans on manufacturer direct sales of vehicles are unequivocally bad for fueling economic engines such as competition and innovation. But, hey! Look on the bright side, New Jersey: At least you'll still get to deal with pushy car salespeople?
What do you think, does the NJMVC have a point or is their argument running on fumes?
Update 3:51 p.m. ET: Yup—it happened. New Jersey's Tesla ban will go into effect on April 1st.