On Wednesday, New Jersey Gov. Chris Christie signed into law a bill that allows Tesla to sell its electric cars directly to consumers, no dealers necessary.
“I said last year that if the Legislature changed the law, I would sign new legislation put on my desk and that is exactly what I’m doing today,” Governor Christie said in a statement. “We’re pleased that manufacturers like Tesla will now have the opportunity to establish direct sales operations for consumers in a manner lawfully in New Jersey.”
According the governor’s office, “the bill changes the law in New Jersey and removes the prohibition on direct sales by auto manufacturers who do not have franchise agreements, giving manufacturers of zero emission cars, including Tesla, the ability to sell directly to New Jersey consumers at up to four locations in the state.”
The law stipulates that manufacturers will have to maintain service centers at locations where they conduct direct sales. Tesla has been waging an ongoing battle against the very entrenched network of car dealers in the U.S. Franchise laws prohibit automakers from selling the cars directly to buyers.
Instead, car dealers act as middlemen, holding cars in inventory, providing financing and insurance services, marketing in their regions, and servicing vehicles. Each state has its own laws on the books, so Tesla has been fighting its battle on a state-by-state basis. With the New Jersey bill becoming law, Tesla buyers can now go to one of the company’s stores in the state and actually place an order for a car.
Technically speaking, Christie’s action on Wednesday altered the existing law—and restored Tesla’s legal right to use a direct-sales model in New Jersey that it had been forced to abandon in early 2014. It remains to be seen whether New Jersey will be an isolated case—or spur other states to change their dealer franchise laws.
In late 2014, Tesla seemed to have conceded that the company might have to pursue a hybrid of direct sales and dealer franchising as it expands.