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New Jersey becomes the fifth state to ban direct Tesla sales

Detailed by Reuters today, the New Jersey Motor Vehicle Commission voted in a measure that bans Tesla from attempting to sell the company’s line of electric automobiles directly to consumers within the state. If Tesla wants to continue selling automobiles in the state, the company will be forced to sell the cars through traditional franchised dealerships. This vote makes New Jersey the fifth state in the U.S. to ban direct sales of Tesla automobiles, followed by Arizona, Texas, Colorado and Virginia. According to the details of the measure, the direct sales ban will start on April 1, 2014. 

Speaking negatively about Governor Christie’s administration on the official Tesla blog, a company official wrote “This new rule, if adopted, would curtail Tesla’s sales operations and jeopardize our existing retail licenses in the state. Having previously issued two dealer licenses to Tesla, this regulation would be a complete reversal to the long standing position of NJMVC on Tesla’s stores. Indeed, the Administration and the NJMVC are thwarting the Legislature and 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.”

It’s possible that Tesla could close the two New Jersey store locations due to the shift in policy by New Jersey lawmakers. Tesla used these stores to teach consumers about the benefits of owning an electric vehicle over a gas powered car as well as directly sell the vehicles to customers.

However, Tesla could use the two stores in a similar fashion to a Virginia location, basically showing off the automobiles and directing interested consumers to locations in other states to make the final purchase. Of course, this will be detrimental to the state where the showroom exists as any taxes obtained from the purchase will be lost to another state.

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