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Assembly Panel Could Help Put Tesla Back on the Road in Garden State

Draft legislation would let electric carmaker sell directly to NJ consumers

Tesla

Tesla Motors Inc. may get an opportunity to sell its high-priced electric vehicles in New Jersey after all.

Legislation that would overturn a decision by the state Motor Vehicles Commission preventing the electric car manufacturer from directly selling its vehicles to consumers in New Jersey won approval from the Assembly Consumer Affairs Committee yesterday.

The decision to block Tesla's direct sales this spring came under fire from both clean-energy proponents and free-market advocates, who wanted to know why the state would try to stop the sale of vehicles that could help reduce pollution contributing to global climate change and undercut efforts to promote cleaner-running cars.

But pushed by the New Jersey Coalition of Automotive Retailers, the state sided with the dealers who argued that Tesla was ignoring state laws requiring vehicles to be sold through licensed franchises -- typically dealerships that are members of the trade organization.

Under the bill, Tesla, whose midrange cars sell for about $70,000, would be allowed to sell directly to consumers at up to four licensed locations in New Jersey. The electric carmaker hopes to begin marketing a $35,000 vehicle in the state within the next three years, according to Diarmuid O’Connell, a vice president of business development for Tesla.

“This is an important issue for use in New Jersey and nationwide as well,’’ O’Connell told the committee. He also disputed assertions that Tesla’s sale of its electric vehicles would represent a threat to automotive dealers, saying its efforts to sell 100,000 electric cars would represent only a fraction of the 17.5 million cars sold in the U.S. each year

Assemblyman Timothy Eustace (D-Bergen), a driver of an electric vehicle and a sponsor of the bill (A-3216) agreed. “Does it affect the market? I don’t think so,’’ he said. “It’s a small niche.’’

Manufacturers engaging in direct sales also would be required to operate at least one retail facility in the state for vehicle service, thus addressing public safety and consumer protection concerns.

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