Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comFirm Insights
Will New Jersey Lawmakers Give Tesla the Green Light?
Author: Dan Brecher
Date: June 20, 2014
Key Contacts
Back
Tesla Motors sells the most widely acclaimed electric car on the market, most recently being named Consumer Reports’ car of the year.
However, a dispute between the carmaker and the state threatens to make the Tesla S virtually impossible to purchase in the state of New Jersey.
The issue is that Tesla currently does not satisfy any of the state’s new franchise requirements. It typically sells its vehicles in “galleries,” which are frequently located in malls or similar shopping centers and only feature one vehicle.
On March 11, the New Jersey Motor Vehicle Commission (MVC) passed new rules governing the licensing of motor vehicle dealers in the State of New Jersey. Under the amendments to the New Jersey Franchise Practices Act, applicants for a new-car sales license, or for license renewal, must submit “a copy of the applicant’s franchise agreement(s) with the motor vehicle manufacturer(s) whose makes and models the applicant is franchised to sell.” The amended rule also requires dealerships to be at least 1,000 square feet in size, showcase at least two vehicles, and include equipment for performing vehicle maintenance.
The rationale is that such laws promote price competition and provide a local point of contact should the vehicle be recalled and need repair. However, they effectively outlaw Tesla’s current business model, something the company alleges Gov. Chris Christie assured would not happen.
The Legislature is currently working to craft a solution that will allow Tesla to stay in New Jersey. The state Assembly recently passed a measure (A-3216) that would allow any a zero-emission vehicle (ZEV) manufacturer to directly or indirectly buy from and directly sell, offer to sell, or deal to a consumer a ZEV if the manufacturer was licensed by the MVC on or prior to January 1, 2014. It specifically preempts any rule or regulation that restricts sales exclusively to franchised dealerships.
To appease regulators, the bill does require Tesla to own or operate at least one retail facility in New Jersey for the servicing of its vehicles. The carmaker is also limited to four retail locations in the state.
It will now be up to the Senate to act. Please check back for updates.
If you have any questions about this post or would like to discuss New Jersey’s franchise laws, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Will New Jersey Lawmakers Give Tesla the Green Light?
Author: Dan Brecher
Tesla Motors sells the most widely acclaimed electric car on the market, most recently being named Consumer Reports’ car of the year.
However, a dispute between the carmaker and the state threatens to make the Tesla S virtually impossible to purchase in the state of New Jersey.
The issue is that Tesla currently does not satisfy any of the state’s new franchise requirements. It typically sells its vehicles in “galleries,” which are frequently located in malls or similar shopping centers and only feature one vehicle.
On March 11, the New Jersey Motor Vehicle Commission (MVC) passed new rules governing the licensing of motor vehicle dealers in the State of New Jersey. Under the amendments to the New Jersey Franchise Practices Act, applicants for a new-car sales license, or for license renewal, must submit “a copy of the applicant’s franchise agreement(s) with the motor vehicle manufacturer(s) whose makes and models the applicant is franchised to sell.” The amended rule also requires dealerships to be at least 1,000 square feet in size, showcase at least two vehicles, and include equipment for performing vehicle maintenance.
The rationale is that such laws promote price competition and provide a local point of contact should the vehicle be recalled and need repair. However, they effectively outlaw Tesla’s current business model, something the company alleges Gov. Chris Christie assured would not happen.
The Legislature is currently working to craft a solution that will allow Tesla to stay in New Jersey. The state Assembly recently passed a measure (A-3216) that would allow any a zero-emission vehicle (ZEV) manufacturer to directly or indirectly buy from and directly sell, offer to sell, or deal to a consumer a ZEV if the manufacturer was licensed by the MVC on or prior to January 1, 2014. It specifically preempts any rule or regulation that restricts sales exclusively to franchised dealerships.
To appease regulators, the bill does require Tesla to own or operate at least one retail facility in New Jersey for the servicing of its vehicles. The carmaker is also limited to four retail locations in the state.
It will now be up to the Senate to act. Please check back for updates.
If you have any questions about this post or would like to discuss New Jersey’s franchise laws, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.