Elon Musk, the always-outspoken CEO of Tesla Motors, is the latest to take shots at New Jersey’s embattled Governor Chris Christie, accusing the possible 2016 Republican presidential candidate of using a “backroom deal” to keep the battery-carmaker out of the Garden State.
Earlier this week, NJ regulators announced that they would bar Tesla from going ahead with plans to open factory-owned dealerships in the state. The carmaker has been hoping to radically change the automotive retail process with its direct sales approach but has run into hurdles across the country as various dealer groups fight back.
Gov. Christie’s Administration ruled in favor of a state requirement that new cars must be sold through licensed franchises a rule proposed last October by the New Jersey Motor Vehicle Commission, about the time Tesla opened two of its own stores in the state.
In its corporate blog Tesla quickly warned that it would not be able to sell cars in the State as a result of the decision, though the decision would actually allow it to enter NJ through a traditional franchised approach.
(NJ pulls plug on Tesla’s plan for company-owned showrooms. Click Here for the original story.)
On Friday, Tesla CEO Musk turned up the heat on Christie whose administration has been taking heat for alleged bullying of opponents – several former high-ranking officials facing potential criminal charges for a stunt last year in which they ordered lanes approaching the George Washington Bridge closed, creating a traffic nightmare in the community of Ft. Lee, whose mayor didn’t support Christie’s re-election.
In a new blog post directed to “The People of New Jersey,” billionaire Tesla founder Musk claimed Christie’s administration again played dirty politics after seeming to negotiate a possible solution to the dispute over company-owned dealerships.
“Governor Christie had promised that this would be put to a vote of the elected state legislature, which is the appropriate way to change the law,” Musk blogged.
It was a process the franchised dealer lobby actively opposed, said Musk, and “When it became apparent to the auto dealer lobby that this approach would not succeed, they cut a backroom deal with the Governor to circumvent the legislative process and pass a regulation that is fundamentally contrary to the intent of the law.”
(Tesla plans to have its ‘gigafactory’ up and running by 2020. Click Here to learn more.)
NJ was, in fact, the third state to completely bar Tesla’s planned factory-owned dealerships, following Arizona and Texas.
Automotive dealer groups continue pressing for bans on Tesla’s retail model in New York and a number of other states. The California-based maker has gotten its way in a few states and reached compromise agreements in others, including Colorado where it has been allowed to retain several company-owned stores but can’t open any others.
Critics have argued that Musk might be the bully, however, and that consumers are the ones taking the hits from both sides since those who might truly want a Tesla Model S either would have to trouble extra distances or simply get one of the vehicles which can carry price tags of up to $110,000.
Musk has refused to fall back on the old franchised system which he insists hurts both manufacturers and consumers – especially those looking to make or buy alternative technology vehicles. “Auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none.”
It seems increasingly likely that the regional disputes could wind up eventually being resolved by the federal courts. And some consumer advocates would be pleased to see a serious challenge to state franchise laws.
Over the years, the courts have routinely supported the dealer system and its major advocate, the Washington, D.C.-based National Automobile Dealers Association. But few expect Tesla and its brash and determined founder and CEO Elon Musk to roll over – as he has shown by taking on the once seemingly invincible Christie.
(Tesla snags Nissan Motors VP Simon Sproule as much-needed new PR chief. Click Here for the news.)