Tesla Motors chief Elon Musk has some choice words for New Jersey Governor Chris Christie over new regulations, passed earlier this week, that prevents Tesla from selling its cars directly to consumers in the state. Spoiler alert: he doesn't like it.
In a statement posted to Tesla's website earlier today, addressed "to the people of New Jersey," Musk all but accused Christie of corruption, saying he cutting a shady "backroom deal" with the powerful auto lobby. He writes:
On Tuesday, under pressure from the New Jersey auto dealer lobby to protect its monopoly, the New Jersey Motor Vehicle Commission, composed of political appointees of the Governor, ended your right to purchase vehicles at a manufacturer store within the state. 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. 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.
In his blog post, Musk answered some of the questions raised by the controversial ban. Predictably, he believes the auto lobby is too strong and the rules hurt consumers.
Musk explained that the current franchise laws, designed to protect independently-owned dealerships, are being twisted to harm his company. "The intent," he writes, was "not to prevent a new company that has no franchisees from selling directly to consumers," but to simply protect existing franchisees from automakers. According to Musk, Tesla must sell cars directly to consumers because dealerships aren't properly incentivized to sell electric cars: "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." Car dealerships also profit from servicing gas cars, and Tesla has made it a point not to make car servicing costly for consumers. Plus, traditional car salesman — who musk is clearly not a fan of — might not have the expertise necessary to answer questions by potential Tesla customers. "As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind," says Musk.
Of course, he also got in some traffic jabs at Christie:
The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection”. If you believe this, Gov. Christie has a bridge closure he wants to sell you!
And sort-of referred to him as a mobster:
Unless they are referring to the mafia version of “protection”, this is obviously untrue
Musk added "we are evaluating judicial remedies to correct the situation." Until then, Tesla will transition their Jersey showrooms to galleries, "where you can see the car and ask questions of our staff, but we will not be able to discuss price or complete a sale in the store." Cars can then be legally purchased (for now) in New York.
This article is from the archive of our partner The Wire.
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