Boston, MA 06/09/2014 (wallstreetpr) – In the month of April 14, the state of New Jersey had banned the electric car manufacturer Tesla Motors Inc. (NASDAQ:TSLA) from selling its cars through ‘Direct-Sales’ route in the State. Dominic Chu of CNBC reports that a new bill has been passed by the Consumer Affairs Committee in the State of New Jersey, which brings a ray of light for the company. As per Chu, The bill has been passed on a unanimous four to zero vote with a provision to allow the company to open 4 stores in the state, as long as the company opens a service centre as well in the state.
‘Galleries’to turn to ‘Stores’
As of now Tesla Motors Inc. (NASDAQ:TSLA) has its presence in the state in the form of ‘galleries.’ These are different from stores in that the galleries just showcase the model to prospective customers. Chu says that cars cannot be purchased through these galleries, and they do not even provide information on cost of cars. Stores would allow the company to sell cars. As per the Vice President, Diarmuid O’Connell of Tesla Motors Inc. (NASDAQ:TSLA), the direct sales model aligns with the core strategy of the company and is, therefore, very important.
Chu further says that in a conversation with one of the assembly men suggest that the bill is most likely to reach the Governor for clearance by the July 4. This development was termed ‘positive step’ by the company, which is now looking forward to opening its stores in New Jersey. The shares of Tesla Motors Inc. (NASDAQ:TSLA) had doubled over the last year and with this further development, it is going to be interesting times for the company.
Dealer Model versus Direct Sales Model
The condition in the bill that the company should set up a service centre seems to have stemmed from intent to create some additional jobs. However, it remains to be seen as to whether the creation of this service centre would solve the issues. The debate between dealers versus direct sales model had been going on for a long time, and it will only be known with time as to which of the two models is a better one.
It also remains to be seen whether other states will follow this example and lift the ban on Direct-Sales by Tesla Motors Inc. (NASDAQ:TSLA).
