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New Jersey Bans Direct Tesla Sales to Consumers

by Jacob Kleinman | March 12, 2014March 12, 2014 6:00 pm PST

tesla dealership

The New Jersey Motor Vehicle Commission pushed through new legislation on Tuesday blocking all car-makers from selling their vehicles directly to consumers and effectively banning Tesla Motors from the state. Most automakers use dealerships to sell cars, but Tesla sells direct. The news caught Tesla by surprise after Governor Chris Christie reportedly turned on the company, breaking a promise to delay the amendment in favor of a fair process and instead allowing a final vote to take place on March 11.

The new amendment was reportedly backed by the New Jersey Coalition of Automotive Retailers, which lobbies for franchised car deals who were being cut out of the equation by Tesla. The electric car company prefers to sell its vehicles directly to consumers in an effort to educate potential future owners about the benefits of its new technology.

New Jersey is the third state to push through similar laws blocking Tesla’s business model following Texas and Arizona, but the northeast state represents a significantly larger luxury car market. Tesla was quick to respond with outrage, issuing a public letter condemning Governor Christie’s administration, while CEO Elon Musk claimed that car dealers were “subverting [the] democratic process” on Twitter.

Despite growing outrage over the decision, especially from electric car supporters and Silicon Valley figures, it seems unlikely the decision will be reversed anytime soon. For now, New Jersey residents who want to buy a Tesla car will have to travel outside the state.

Tesla Motors

Jacob Kleinman

Jacob Kleinman has been working as a journalist online and in print since he arrived at Wesleyan University in 2007. After graduating, he took a...