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New Jersey Senate Panel Approves Rule Allowing Tesla Direct Sales

March 10, 2015
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This week started with some good news for Tesla Motors Inc. The New Jersey Senate Commerce Committee approved a bill that will allow direct customer purchases, making the automaker one step closer to again selling its vehicles directly to consumers in the state.

The rule was passed unanimously by the Assembly in June last year. After it was approved by the committee, it will head on over to the full Senate before reaching Republican Governor Chris Christie.

Tesla has been unable to sell its vehicles in New Jersey since April 1 after the state Motor Vehicle Commission passed a rule that requires all new cars to be sold through auto dealerships. The electric automaker sells its vehicles directly to customers through its own stores. The ruling not only required Tesla to stop sales at its two New Jersey establishments, but also banned the company from opening other establishments in the state.

At present, the Palo Alto, California-based vehicle manufacturer is using its two New Jersey locations as “galleries.” The establishments in Paramus and Short Hills display the company’s vehicles, but do not sell them. Interested buyers are redirected to other states that allow direct car sales, such as New York.

The ruling made New Jersey the third state to ban Tesla’s direct sales business model, trailing behind Texas and Arizona. It also caused a feud between Gov. Christie and Tesla co-founder and CEO Elon Musk. In a blog post, the latter accused the former of supporting major automakers and backtracking on his promise to allow Tesla to present its argument on a public forum. Prior to the ruling, Tesla has been in talks with Gov. Christie’s counsels, and both parties agreed that the automaker and the state’s coalition of auto retailers would address the issue through the New Jersey Legislature.

Gov. Christie previously said he had no issue with Tesla, but mentioned that the company would only be able to operate in New Jersey if the state’s direct-sales prohibition is lifted.

In other Tesla news, the automaker has confirmed that it is cutting jobs in China. The move is mostly due to lackluster sales in the world’s largest auto market. Spokesman Gary Tao revealed that the automaker will eliminate some jobs as part of its business restructuring efforts in the country.

Tesla did not provide other details about the job cuts but local media reported that the electric vehicle manufacturer will cut 180 of 600 positions in China, reducing its local staff by 30 percent.

Photo credit: rklopfer/ Flickr/ CC BY-SA

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