Pub. 18 2019-2020 Issue 2

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 3 , 2 0 1 9 8 new jersey auto retailer President’s MESSAGE | BY JAMES B. APPLETON Suing the State - The Tesla Problem NJ CAR filed a lawsuit against the State of New Jersey on September 9, 2019, claiming the Office of the Attorney General, Motor Vehicle Commission and Division of Consumer Affairs have ignored Tesla’s reckless disregard for consumer protection and dealer licensing laws and failed to enforce the laws those agencies are responsible for upholding. The Coalition attempted to address a variety of concerns with Tesla’s business practices for more than a year, hoping to avoid litiga- tion, but the State repeatedly turned a blind eye to numerous instances of Tesla breaking the law and ignoring rules and regulations that are intended to protect New Jersey consumers and ensure an even playing field among all New Jersey auto retailers. Every single one of New Jersey’s 510+ main street dealers are subject to strict enforce- ment of New Jersey motor vehicle licens- ing and consumer protection laws. They aren’t asking for special treatment, like that afforded Tesla. They just want the law to be applied even-handedly, regardless of wheth- er you are a Silicon Valley and Wall Street player like Tesla or a neighborhood new car or truck dealership. In 2015, the legislature granted Tesla a limited exemption from New Jersey’s mo- tor vehicle franchise and dealer licensing laws, allowing the then start-up company to open four direct sales locations. It was understood, at the time, if they needed more retail locations, they would appoint qualified franchisees, the same as all other automakers are required to do. Tesla, with a market capitalization over $64 billion, ( larger than General Motors and Ford ), is no longer a start-up, yet the company contin- ues to receive special treatment from the State of New Jersey. The lawsuit details Tesla’s long history of violating laws at the expense of New Jersey consumers, including: • Operating illegal locations; • Employing “Bait-and-switch” tactics; • Engaging in deceptive advertis- ing; and • Ignoring numerous motor vehicle advertising regulations. If any neighborhood new car or truck dealerships did these things, the State would – and has – taken action against them. But the State has re- fused to enforce the law and put a stop to Tesla’s unlawful business practices. As we’ve said repeatedly, this uneven application of the law places local dealers at a competitive disadvantage, puts consumers at risk from shady business practices and encourages bad behavior in the new car marketplace. NJ CAR has spent decades training and advising dealers to comply with the laws to keep consumers safe and ensure fair competition in the motor vehicle marketplace. The Coalition takes its responsibility very seriously and expects everyone in the industry to play by the same rules and operate by the highest standards. NJ CAR and the dealer members we represent were frustrated to the point of exas- peration, which is why the lawsuit was filed. NJ CAR hopes that this suit will raise awareness with the public that bad actors like Tesla are given a free pass by the current Adminstra- tion at the publics’ expense. Clearly, Tesla doesn’t respect the law in New Jersey and neither the Motor Vehicle Commission nor the Attor- ney General appear willing to hold them accountable. Powerful Silicon Valley and Wall Street players like Tesla should never get a pass while Main Street businesses, like New Jersey’s new car and truck dealers, are required to play by the rules. This undermines the rule of law which, in turn, creates a race to the bottom in the marketplace, harming consumers. That is the driving message behind the lawsuit filed by NJ CAR on behalf of its dealer members. Dealers just want the State to do its job.