Slow to come out of the recession and plagued by government policies that have led business groups to rank Governor Martinez last or next-to-last in private sector job creation, New Mexico was bolstered by news that Tesla motors is considering building a new battery factory in the state, and bringing up to 6,500 jobs with it.
However, Tesla just got bad news from none other than Martinez BFF Chris Christie and that has us wondering whether Tesla will think twice about rewarding Martinez and New Mexico with their multi-billion dollar investment.
New Mexico and three other Republican-led states (Arizona, Texas, Nevada) were recently announced as front-runners for a new $2 billion battery plant to supply Tesla’s expanding market. However, the company has never ruled out an expansion in California where it is currently based.
The company initially announced plans to build its massive production plant in New Mexico but later pulled out after California offered a more lucrative incentive package.
[New Jersey Governor Chris Christie] came back to New Jersey and signed off on a cold, hard government regulation that blocks Tesla from selling its cars in the state.
The rule change prohibits automakers from selling directly to consumers, as Tesla does. Instead, it requires them to go through franchised, third-party dealerships, as the big, traditional car companies do. In other words, it requires that the middle-men get their cut. The Christie Administration made the move unilaterally, via the New Jersey Motor Vehicle Commission. It was urged on by lobbyists for the state’s existing car dealerships, which fear the competition. The upshot is that Tesla will be forced to stop selling cars at its two existing dealerships in the state, and drop its plans to build more. It’s unclear what will happen to the employees of those dealerships.
New Jersey is the third state to effectively block Tesla by banning automakers from selling their cars directly. The other two are Texas and Arizona.
In a blog post, Tesla blasted the Christie administration for enacting the rule change administratively, rather than waiting for the legislature to resolve the ambiguity in existing law. A spokesman for Christie, on the other hand, told me the governor views the new rule not as a policy change so much as a clarification of the status quo for car sales in the state. He added that the governor might be open to approving a law overturning that ruling, but noted that the legislature has not presented any such bill so far.
Tesla, needless to say, is not thrilled.…
If there’s a silver lining for Tesla, it’s that when bills banning direct sales do make it to state legislatures, they tend to get defeated. It turns out the public likes being able to buy cars from whomever it wants, rather than having its choices constrained by Republican governors and their bureaucrats.
Now the question: If Republican governors keep squashing competition and eliminating markets for Tesla (and putting Tesla employees out of business in the process), why would Tesla reward another Republican governor with a huge investment and potential political job creating victory?