Electric carmaker Tesla cries foul after New Jersey Motor Vehicle Commission (NJMVC) confirms ban on direct sales of Tesla cars in the state.
The U.S. based electric car manufacturer sells cars directly rather than getting a dealer involved. However, several states in the U.S. say that Tesla should use the traditional model of selling cars via dealers.
The NJMVC has recently approved a rule which requires all new motor vehicles to be sold via authorized franchisees only. According to the new rule Tesla, which does not use franchises, will have to close its two stores in New Jersey by April 1.
On Tuesday, March 11, Tesla issues a statement expressing its disappointment towards NJMVC and members of Governor Christie's administration.
"We are disappointed in the actions of the NJMVC and the Christie Administration, which come on the heels of more than nine months of unexplained delays in the issuing of a new sales license for Tesla, despite our numerous requests, calls, and letters. In addition, the NJMVC has also delayed the annual renewal of Tesla's current dealer licenses without indication of the cause of the delay," reads the Tesla statement. "The delays have handicapped Tesla in New Jersey, where, without clear licensing procedures and fair enforcement of existing law, we have been forced to delay our growth plans. This is an issue that affects not just Tesla customers, but also New Jersey citizens at large, because Tesla would be unable to create new jobs or participate in New Jersey's economic revival."
The closure of Tesla stores in New Jersey means that potential customers will have to go out to test-drive Tesla cars outside the state, which may result in a major blow to the company's sales.
New Jersey is not the only state where Tesla is facing opposition from car dealers regarding its direct sales policy. Car dealers in Texas and Arizona have also been successful for toughest restrictions on Tesla's direct sales to consumers. Moreover, similar rules are also pending in other states in the country such as Ohio, New York, Georgia and Minnesota. However, in North Carolina, the anti-direct-sales legislation failed to be implemented.
It will be interesting to see if Tesla bows down to the anti-direct-sales policy and starts selling cars from dealers in the near term, which may increase the cost of the car to consumers.
