New Jersey Bans Tesla!

Less than three months have passed since the infamous George Washington Bridge – Port Authority traffic scandal exploded across the headlines. Despite Governor Chris Christie’s attempts to move beyond the controversy, political and criminal investigations are imperiling his political future.

Wouldn’t it be reasonable, then, to expect the Governor to steer clear of any controversial transportation industry decisions? Instead, Christie’s administration leaped into a national debate last week by banning electric automobile pioneer Tesla from maintaining company stores in the Garden State.

Apparently, New Jersey requires automobile manufacturers to sell their products through independent dealership networks. Tesla, as a relatively young firm with no such network in place, has opted to distribute its electric automobiles through “Apple style” company owned retail stores instead. Many of these outlets are actually located in luxurious shopping malls!

Tesla founder Elon Musk, outraged by New Jersey’s ban, charged that Governor Christie “cut a backroom deal (with) the auto dealer lobby.” Then, referring to the GWB / PA scandal, he added “If you believe (him), Gov. Christie has a bridge closure he wants to sell you!”

The dealership lobby claims that restrictive sales laws are needed to prevent unfair competition and ensure consumer protection. It is difficult to imagine, though, why a Tesla company store would be any more threatening to the economy or to consumers than an Apple company store.

Interestingly, New Jersey has also banned self-service gasoline stations from its territory for the past 65 years. Claiming that such stations create safety hazards, the state requires that all filling stations offer full service gasoline pumps only.

So it appears that the Garden State has been promulgating unusual transportation policies for a very long time. But would the general public experience an economic and social benefit, or a commensurate risk, if the State continues to do so?

If you were Jessica Rich, the Director of the Bureau of Consumer Protection of the Federal Trade Commission, would you support New Jersey’s right to ban Tesla company stores? As well as all self-service gasoline stations?