Tesla has recently pushed to expand its retail presence in New York. Last year, the company voiced support for a bill that would allow Tesla to open 20 new stores in New York. | Getty Tesla renews lobbying efforts to open more retail stores in New Jersey

Tesla, the California-based electric carmaker, is revving up its lobbying efforts in New Jersey to open new retail store locations, arguing that additional brick-and-mortar presence aligns with the clean energy goals of the Murphy administration.

A 2015 law signed by former Gov. Chris Christie only allows Tesla to operate four direct-sale stores in the entire state. With new leadership in Trenton, the company is pushing lawmakers to consider legislation that would increase Tesla’s dealership cap, a Tesla representative told POLITICO.


The move is bound to draw the ire of the state’s powerful car dealership lobby, which has staunchly opposed Tesla’s efforts to circumvent the traditional dealership model by selling directly to customers.

“When consumers are evaluating over whether they can make this transition from an internal combustion car to an electric vehicle, it takes a great deal of education,” Ryan Barnett, a policy adviser for Tesla, said in an interview. “We think expanding our brick-and-mortar and improving access to consumers is critical to seeing any of these [electric vehicle] goals realized.”

A Tesla representative first met personally with Gov. Phil Murphy during the Democrat’s first week in office in 2017, POLITICO previously reported. That same year Tesla signed a $60,000 contract with the River Crossing Strategy Group to lobby in New Jersey on “transportation and renewable energy issues,” according to lobbying disclosure documents. Those lobbying efforts include the push to expand Tesla’s existing retail presence, Barnett said.

Since then, River Crossing has met with some of the state’s top Democratic leaders to lobby on “pending legislation” for “electric vehicle policy” on behalf of Tesla, according to lobbying disclosure documents.

In the second quarter of 2018, the firm met with state Sen. Paul Sarlo, chairman of the Senate Budget and Appropriations Committee, according to lobbying disclosure documents. A few months later, River Crossing met with the governor’s office and state Sen. Vin Gopal, the majority conference leader. The lobbying group also met with state Sen. Joseph Lagana — a Democrat whose district includes Paramus, the location of one of Tesla’s four existing stores — in the second quarter.

Lagana said a portion of his conversation with Tesla included the company’s desire to expand its retail locations in the state. Lagana said he isn’t opposed to Tesla expanding “if it’s done the right way,” but isn’t working on a bill to revisit the cap.

“I’m obviously pro-business and will do anything I can to encourage business to grow in the state, of course, in an era where people can’t wait to leave,” Lagana said. “I think we have to be fair and even-handed on how you deal with a traditional dealership as opposed to a dealership run by a company.”

Gopal said Tesla did bring up its desire to expand its retail presence in the state during their meeting, but that he had some concerns with the proposal.

“It was an introductory meeting to tell me more about Tesla and what they do and that they would like to have a further presence in New Jersey,” Gopal said. “When it comes to the economy, we have a lot of jobs right now that rely on the automobile industry. So all of these pieces need to be weighed, need to be considered, and I would like to look a bit further into the other states.”

Sarlo said Tesla also met with him to discuss retail expansion and said “it’s something to consider” as the electric vehicle market grows and Tesla works on making its cars more affordable. Tesla in 2017 unveiled its first mass-market sedan, the Model 3, that starts at $46,000.

“I mean, listen, of course our friends in the traditional car dealership industry would be vehemently opposed to that,” Sarlo said. “But I understand where Tesla is coming from. That market is growing fast.”

Sarlo added he hasn’t committed to backing legislation that would raise the cap on Tesla stores.

A spokesperson for the governor’s office didn’t return requests for comment about Tesla’s outreach.

Barnett declined to comment on how many more stores Tesla hopes to open in New Jersey but said he would like to see Tesla increase its presence in central New Jersey, as its current stores are primarily located in the northern part of the state.

Tesla has four direct-sale stores in Cherry Hill, Paramus, Short Hills and Springfield. Tesla also has a service center at the Garden State Plaza in Paramus.

“We’d like to have the ability to respond to consumer demand as any other company would,” Barnett said.

Since its inception, a core focus of Tesla’s business model has been reaching consumers directly by building its own retail locations. But the move has caused fights in statehouses from Michigan to New York. Car dealers, often an economic driver for states, have fought tooth-and-nail against Tesla’s attempt to cut out dealers.

So far, Tesla only has direct-sale stores in 13 states and D.C., according to its website. Some states — like New Jersey and New York — only allow Tesla to operate a limited number of stores. Others, like Michigan, have outright banned Tesla from opening retail locations but still allow the company to set up galleries where consumers can view the cars in-person.

Tesla’s multiyear battle to cut out the middleman comes down to the automaker’s desire to have more direct contact with customers and to control costs, said Michelle Krebs, an executive analyst for Autotrader.

“They are trying to figure out ways where they can have direct contact with a customer and more control over the process,” Krebs said. “One of the issues around the dealer franchise system is the automaker loses some control over customer service access … and Tesla wants that control. There’s also ... an issue of cost.”

The New Jersey Coalition of Automotive Retailers, a lobbying group representing car dealerships, is opposed to raising Tesla’s dealership cap.

“When this law was passed four years ago, it was well understood it was a special accommodation to Tesla,” said Jim Appleton, NJCAR president. “The special accommodation is that any future stores Tesla was to seek to open in New Jersey would be franchised locations — not because that’s a favor to the car dealers, but that’s what needed to protect the public interest and the consumers.”

Dealerships are necessary to protect consumers by providing them with access to warranty and safety recall repairs, Appleton said. There’s always a risk automakers could go out of business, like Saab and Pontiac, leaving dealerships behind to handle any safety issues with the cars still on the road.

NJCAR signed lobbying contacts in 2017 with the Princeton Public Affairs Group, the state’s largest lobbying firm, and Impact NJ. Both contracts total $90,000 and call on the firms to “monitor legislation having an impact on franchised new car and truck retailers in New Jersey.” NJCAR has signed similar lobbying contracts the past several years.

In 2013, NJCAR spent $155,000 lobbying politicians to limit Tesla’s ability to sell its cars directly to consumers without using a traditional car dealer. Those efforts initially paid off, as the state Motor Vehicle Commission in 2014 adopted a rule that banned Tesla from selling directly to New Jersey customers.

Tesla criticized the rule in a blog post, accusing the Christie administration of going “beyond their authority to implement the state’s laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers.”

In 2015, Christie signed into law a bill that reversed the ban and allowed Tesla to operate the four dealerships that are currently running today.

Tesla has recently pushed to expand its retail presence in New York. Last year, the company voiced support for a bill that would allow Tesla to open 20 new stores in New York. The legislation, which never made it out of committee, had been sponsored by former Assembly Majority Leader Joe Morelle, who has since been elected to Congress.

Expanding the company’s retail presence aligns with Murphy’s clean energy goals as the company also sells battery storage packs and solar panel products, Barnett said. Tesla in 2016 acquired SolarCity, a solar-panel maker.

Murphy has pledged to put New Jersey on a path to 100 percent renewable energy by 2050. To further that aim, he signed legislation in May that mandates the Board of Public Utilities procure 600 megawatts of energy storage by 2021 and 2,000 megawatts by 2030. That bill also requires the state to derive 50 percent of the state’s electricity from renewable energy sources by 2050.