Tesla Motors secured a crucial victory in its fight against car dealerships as New Jersey's Gov. Chris Christie signed a bill that allows the electric vehicle company to establish four dealerships in the state.
Last year, Tesla was banned in New Jersey from selling its vehicles directly to customers. At the time, Christie said that if there will be a change in the law, then he would sign it once it comes to his desk.
With Christie signing the new bill, manufacturers such as Tesla are now given the opportunity to legally put up operations for direct sales in New Jersey.
"A huge victory in New Jersey for consumer choice: We are open for business!" tweeted Tesla Motors, showing the company's appreciation for Christie's signing of the new law.
Tesla's business model is different from other car companies because it sells its electric vehicles directly to customers, foregoing the third-party franchised dealerships that most car companies use. This has caused Tesla to get locked into legal battles with dealership associations state-by-state, as there are laws that prevent automobile manufacturers from making such direct sales.
Dealerships, which mostly have high levels of influence among lawmakers, are strongly against the idea of Tesla selling its cars directly to customers. The Federal Trade Commission, however, launched its own criticisms against the car industry, calling its strategy of selling to customers as "protectionist."
Tesla CEO Elon Musk believes that electric vehicles, being newcomers to the car industry, should not be covered by the standard procedures and laws for automobile sales. Musk has also criticized the practices of car dealerships, stating that they push for customers to purchase items that they do not need or steer them to purchase vehicles that are more expensive for bigger commissions. Musk has even called the opposition from dealerships to the company's business model as a "mafia version of 'protection.'"
Musk believes that Tesla should be allowed to sell its electric vehicles similarly to how Apple sells its devices, which is in specialized stores dedicated to the product line.
The conflict has caused a ban on the sales of Tesla's Model S in the states of Arizona, Maryland, Michigan, Texas, and previously, New Jersey.
The new law signed by Christie now allows automobile manufacturers which produce zero-emissions cars to operate a maximum of four dealerships in New Jersey. A similar bill passed last year in New York allowed Tesla to establish five dealerships in the state.
