Tesla Motors Inc (TSLA) to explore judicial remedies to restore sales in New Jersey

Posted Mar 17, 2014

Tesla Motors Inc (NASDAQ:TSLA) is going to turn its store in Paramus, New Jersey into a gallery for now. It is being converted because the New Jersey Motor Vehicle Commission voted against Tesla’s direct sales strategy in favor of car dealerships. 

Tesla Motors CEO Elon Musk said that the electric vehicle company will now explore “judicial remedies” to restore its ability to sell vehicles directly from two factory-owned stores in New Jersey. These two stores will be blocked from selling vehicles on April 1st as that is when its existing licenses expire.

The locations will stay open as galleries and will display Tesla cars. Staff that work at the stores will answer questions from consumers. However, staff members will not be able to discuss prices or complete a sale. New Jersey buyers can still buy vehicles using the Tesla website.

The dealers said that the commission was bringing its regulations in line with the long-standing state law that requires franchised dealerships. Tesla said that they should have never been granted licenses. Tesla Motors said its licenses were properly granted and should not be taken away.

“The statute in New Jersey plainly allows Tesla to be licensed to sell cars there,” stated Tesla vice president Diarmuid O’Connell in an e-mail with AutoNews.

Musk accused Governor Chris Christie of going back on his word to delay the regulation. Christie’s spokesman said that it was made clear to Tesla Motors that the company would need to lobby the legislature for a bill to set up a direct-sales operation. O’Connell said that this assertion from the governor’s office was false.