Tesla fires back at New Jersey for rule barring direct auto sales

by Reuters
Friday, 14 March 2014 20:05 GMT

March 14 (Reuters) - Tesla Motors Inc is studying "judicial remedies" to fight a New Jersey ruling approved this week that bars the electric car maker from selling cars directly to the public in the state.

In a sharply worded blog post on Friday, Chief Executive Elon Musk fired back against the regulation change, approved by New Jersey Governor Chris Christie's administration, which requires sales of all new cars to go through franchises.

"The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures 'consumer protection,'" Musk wrote. "If you believe this, Gov. Christie has a bridge closure he wants to sell you!"

Starting on April 1, all of Tesla's stores in the state will convert to galleries, where potential customers can see the car and ask questions. But staff will not be able to discuss price or complete a sale of a car.

However, Musk said, New Jersey residents can still order the Model S electric car online. They can also buy the car from Tesla stores in New York and near Philadelphia.

"We are evaluating judicial remedies to correct the situation," Musk said in the blog post.

Musk has said there is less incentive for auto dealers, who own a variety of different car dealerships, to push electric cars.

Tesla's strategy relies on being able to sell directly to consumers. But earlier this week, New Jersey approved a rule requiring sales of all new cars to go through franchises.

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