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Bill allowing Tesla to operate in N.J. advances

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Tesla Vice President for Business Development Diarmuid O'Connell testifies Thursday before the Assembly Consumer Affairs Committee.
Tesla Vice President for Business Development Diarmuid O'Connell testifies Thursday before the Assembly Consumer Affairs Committee. - ()

The Assembly Consumer Affairs Committee voted unanimously Thursday to release a bill that would permit manufacturers of zero-emission vehicles to directly buy or sell to consumers and thus uphold the business model of Tesla Motors and allow the maker of electric cars to continue operating in New Jersey.

Under the bill, which is sponsored by Assembly Majority Leader Lou Greenwald (D-Voorhees) and Assemblyman Tim Eustace (D-Paramus), any zero-emission vehicle manufacturer would be permitted to operate at a total of up to four locations across the state with at least one additional retail facility that would be used for vehicle service.

The bill would allow Tesla, which currently has two in-state showrooms in Short Hills and Paramus, and an additional service location in Springfield, to double its number of stores in New Jersey.

The bill speaks to a controversial decision made by the state Motor Vehicle Commission in March to require that all new cars be sold through franchised dealers rather than directly through their manufacturers, effectively banning Tesla and its direct-sales business model.

At the time, the decision was criticized by some as a yield to special interest groups and in particular, the New Jersey Coalition of Automotive Retailers, which has opposed Tesla’s business model on the grounds that it gives the company an unfair advantage over traditional dealers.

Eustace, an electric car driver himself, testified Thursday that the Legislature “would be mistaken” if it did not work to reverse the MVC’s decision.

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“I thought we were the people who made the laws,” Eustace said.

Following the vote, Eustace added in a statement that he believes the bill “will incentivize entrepreneurship, create jobs, promote environmental protection and address the important concerns of consumers in our state.”

“Tesla is an innovative company that has produced a top-rated, environmentally conscious product,” Greenwald added in a statement. “Their commitment to innovation, job creation and consumer satisfaction is precisely the kind of entrepreneurial spirit we should be encouraging in New Jersey. Unfortunately the Motor Vehicle Commission’s decision threatened to hamstring those efforts, but this bill fixes that wrong.”

The committee also heard testimony from Diarmuid O’Connell, Tesla’s vice president of business development, who spoke to the importance of allowing the company to continue its direct-sales business model.

O’Connell also touched on some of Tesla’s future plans, which include producing more affordable vehicles and selecting a site for a planned $5 billion “gigafactory” that would produce battery packs for its vehicles.

Though New Jersey is not a potential landing spot for the factory, Assemblyman and panel chair Paul Moriarty (D-Turnersville) lightheartedly threw the Garden State’s hat into the ring.

“I’d be happy to drive you around South Jersey,” Moriarty quipped to O’Connell.

Afterwards in a statement, Moriarty affirmed his support for the measure.

“We need New Jersey to be at (the) forefront of advancing technology if we want to put ourselves into position for strong economic development and job creation, and we also need to promote clean energy and the health benefits it brings to our residents,” Moriarty said. “This bill ensures New Jersey will not be left behind.”

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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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