Pub. 5 Issue 2

20 Issue 2 2019 www.lslcpas.com | (714) 672-0022 Brea Sacramento “We have a fantastic relationship with the LSL team. They keep our interests top of mind and maintain a positive reputation in the industry.” Santa Ana -Craig Whetter, President, David Wilson Automotive Group, firm relationship since 1983 Donald Slater, CPA Automotive Services Partner donald.slater@lslcpas.com Mike Mangold, CPA Automotive Services Partner mike.mangold@lslcpas.com David Myers, CPA Automotive Tax Partner dave.myers@lslcpas.com license. But within four months, the state agreed to a settlement in which it said the company hadn’t violated the law. “There is simply no justifiable basis for the State to continue to permit Tesla’s conduct here,” the lawsuit states. “Indeed, the only explanation for the settlement agreement between the State and Tesla is the State’s affinity for Tesla versus other automotive retailers.” Spokespeople for the Attorney General’s Office and the MVC both declined to comment on the lawsuit. Angelo Genova, an attorney who filed the suit for NJ CAR, said the trade group had tried to avoid litigation by pressing the state to force Tesla to “play by the same rules as every other auto dealer in our state.” “We have seen no meaningful and tangible government action protecting consumers and competitors from Tesla’s business practices at issue in this case,” Genova said. The suit comes after Tesla began ramping up its lobbying efforts in Trenton since Gov. Phil Murphy, a Democrat, took office last year. POLITICO reported last year that representatives for the company met directly with the governor and, more recently, had contacted many state lawmakers in an effort to get a new law that would allow it to open more than four direct-sales locations. Tesla‘s four direct-sale stores are in Cherry Hill, Paramus, Short Hills and Springfield. Since its inception, a core focus of Tesla’s business model has been reaching consumers directly by building its own retail locations, an approach that’s led to regulatory fights in statehouses from Michigan to New York. Car dealers, often an economic driver for states, have fought aggressively against Tesla’s attempt to cut out dealers, which NJ CAR says helps consumers by creating competition and inserting a layer of independence between sales people and the manufacturer. The group argues dealerships give consumers access to warranty and safety recall repairs that manufacturers would prefer to avoid. But Tesla has accused the traditional dealerships of being out for their own gain, writing in a 2014 blog post – a direct response to rules prohibiting their gallery locations – that state officials were 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.” 