Tesla - NJ Fence Sitters Coming Out

By Richard Menta 3/17/14

I was only in one of Tesla's two New Jersey showrooms for a few minutes when a middle-aged executive walked up on my right and blurted out "Talk to me about financing" to the salesperson I was sharing a short banter with. With that the two went over to one of the store's monitors and started talking terms.

This was the first time I walked into a Tesla store, spurred by the recent announcement that the state will prohibit the company from selling cars here on April Fools Day. Apart from Tesla's sales model and stores being designed by a former Apple exec, there is nothing here that falls into the domain of a site devoted to digital media. But, since I write about technology in general, and since politics and the judiciary have played a significant role in the drama between disruptive models and the traditional ways of doing things in what I regularly write about, I stretched things to include it.

You see, I found the best way to balance out the extreme opinions of Apple cheerleaders and the naysayers is to walk right into one of their stores and see what the crowd is doing. That is why I walked into this particular Tesla store, to see if it tells a story.

An auto dealership, particularly one that sells a car that when loaded can cost over six figures; will never pack a showroom like an Apple store. Still, here I was in the middle of a work day and small, but steady streams of customers were flowing into the Tesla store. The majority were just curious people who wanted to sit in the Tesla. In the mix were genuine shoppers.

I turned to the other salesperson on the floor that day and asked if actual sales had increased since it hit the press with a fervor that New Jersey would no longer permit Tesla to run a company store. "Oh Yeah!" was the reply with a vigorous head nod in the affirmative.

The salesperson was smart enough not to offer up any figures. It didn't matter, a burst in sales comes as no surprise. For those who don't know the New Jersey market it is a small state with nearly 9 million residents. It also battles with Connecticut for the title of the richest state per capita income. There are a lot of people here who can purchase a new Tesla by simply writing a check.

Another thing about the state, as my daily commute along the New Jersey Turnpike will attest, is that the road here is filled with even more expensive BMWs, Mercedes, Porches, Audis, Lexii, and other like-priced luxury cars. Many which get less than 20 miles to the gallon, all which are used as daily drivers to work. So much ink has been spent on range anxiety when talking about the Tesla, it seems some of the pundits have missed the point. Where the Tesla excels is as the ultimate commuter car for the affluent. The rave reviews in the press vouch for this.

To me, the most important review Tesla has received to date is it's near perfect score in Consumer Reports. That's because Consumer Reports are the ultimate pragmatists of the auto revue space who value a car's ability to schlep your kids to and from school higher than a spectacular 0-60 time. Tesla didn't just build a better electric car, they built a better car period and with technology that is still in its early stages. That is a significant achievement.

If you want risk, buy a Jaguar or a Maserati, which both have dubious reliability and low resale values because of it. With no need for an exhaust system, a cooling system, a lubrication system or muffling apparatus the Tesla seems a less risky choice despite its issues and limitations. So far Consumers Report has found the Tesla to have average reliability.

Yes, the three Tesla car fires that made the front pages probably chilled quite a few potential customers. Range anxiety gives many pause despite the fact that most of those can afford a Tesla have a second gas-powered vehicle in the household at their disposal for long trips. The brutal winter the US has seen this year has also taken a sharp toll on battery efficiency for the Model S. In very cold weather you have to count you kilowatts.

Committing to the new takes sincere, informed thought. Owning a Tesla is not an impulse buy. The Tesla fence sitters have thought about this a long time. They really want the car, but for many of the reasons above they held off pulling the trigger.

The change in New Jersey's stance towards company-owned dealerships is now pushing these Tesla fence sitters to make a decision. Once this burst is done, buyers will still be able to buy a Tesla online, but they will have to jump through several very annoying hoops to get the car. Ordering a Tesla online will still be easy. Taking delivery and paying sales tax will become a headache. That will cool sales in the state, no doubt.

Tesla builds a compelling automobile. The press is saying that Tesla has sold 600 Model S cars in New Jersey to date. I would not be surprised if they take over a hundred orders over the next two weeks alone. After that it waits to be seen how dramatically this will affect new Tesla registrations in NJ.



Richard Menta