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Assembly passes bill that would keep Tesla operating in N.J.

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Tesla manufactures a line of electric vehicles that start around $70,000.
Tesla manufactures a line of electric vehicles that start around $70,000. - ()

The Assembly voted to pass a bill Monday that would permit zero-emission vehicle manufacturers to directly buy from or sell to consumers, effectively affirming the direct-sales business model practiced by Tesla Motors and allowing the American electric carmaker to continue operating in the state.

Sponsored by Assemblymen Tim Eustace (D-Paramus), Lou Greenwald (D-Voorhees) and Paul Moriarty (D-Turnersville) and Assemblywoman Pam Lampitt (D-Voorhees), the bill would allow zero-emission vehicle manufacturers to operate at up to four locations statewide with at least one retail facility reserved for vehicle service.

The legislation, which was advanced earlier this month by the Assembly Consumer Affairs Committee, was approved with 77 votes and one abstention. It seeks to overturn a March ruling handed down by the state Motor Vehicle Commission that effectively banned Tesla from operating in New Jersey by requiring that franchised dealers be used in new car purchases. Following the decision, the MVC and Gov. Chris Christie’s administration were heavily criticized for what some perceived to be a bow to special interest groups and the New Jersey Coalition of Automotive Retailers, which has lobbied against Tesla and claims its business model presents an unfair advantage over car dealers.

Shortly after the MVC’s ruling in an open blog post on the company’s website, Tesla CEO Elon Musk claimed the auto dealer lobby “cut a backroom deal” with Christie in order to “circumvent the legislative process and pass a regulation that is fundamentally contrary to the intent of the law.” Christie later blamed the decision on the Legislature, saying that he’s not responsible for crafting laws, just enforcing them.

Prior to Monday’s vote, Eustace and other bill advocates rallied on the steps of the Statehouse in support of the measure.

“We need to encourage American companies and American entrepreneurs to create jobs, businesses and revenues here in New Jersey,” Eustace, an electric car driver himself, said.

John Galandak, president of the Commerce and Industry Association of New Jersey, added that the state needed to “send a loud and clear message to entrepreneurs that it will not stifle a free market approach to innovation.”

Tesla currently operates two in-state showrooms in Short Hills and Paramus and a service facility in Springfield. The legislation would allow the company to double its presence in New Jersey.

“Hindering New Jersey consumers from deciding for themselves how to purchase a car makes no sense in the free market — especially when the purchase of more electric cars would be so beneficial for the environment and our economy,” added Naved Husain, consumer rights advocate for New Jersey Citizen Action.

The bill will now have to move through the Senate before it reaches the governor’s desk.

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Andrew George

Andrew George

Andrew George covers the Statehouse from NJBIZ's Trenton bureau. Born and raised in N.J., Andrew has also spent time as a reporter in D.C., Texas and Pa. His email is andrewg@njbiz.com and he is @AndrGeorge on Twitter.

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