How can New Jersey deny Tesla Motors TSLA -1.57% a license to sell cars when it doesn't have any franchises to compete with ("New Jersey Pulls the Plug on Tesla," Marketplace, March 12). The law was set up to protect franchises from competition from the auto maker.
I bought a Tesla easily and painlessly in Arizona, which also requires that automobiles be sold through franchise dealerships. Tesla has a store in Scottsdale staffed by pleasant and knowledgeable people who answer questions about the vehicle on display there. As they are banned from any selling activity, they scrupulously refuse to answer any questions about price or financing. You can test drive the car by appointment, which can be arranged online. When you're ready to buy, you do so online. You pick up the car at another Scottsdale location.
Before placing my order, I made another trip to the store to have one more look. The manager asked me what options I had selected. He explained that several of them were a waste of money. He saved me $10,000. When was the last time that happened at a franchise car dealership?
Stephen R.S. Martin
Cave Creek, Ariz.
The regulation adopted by the New Jersey Motor Vehicle Commission on March 11 isn't an attack on Tesla or an attempt to put the car maker out of business in New Jersey. It simply requires Tesla to conform its business model to existing state law. The Tesla factory-store model is unlawful in New Jersey because the statute, on the books for more than a decade, prohibits an auto maker from owning a dealership, being licensed as a new-car dealer or directly retailing cars in the state.
The law serves the public interest in competitive pricing, convenient warranty and safety recall service and highway safety. The franchise system of independent new-car dealerships promotes aggressive price competition, while the factory-store model advocated by Tesla creates a vertical monopoly and limits competition.
James B. Appleton
N.J. Coalition of
There is no circumstance in which reduced choice or the inclusion of a sales commission to a dealership helps the consumer.
West Orange, N.J.
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