Starting April 1, the state of New Jersey will not allow the car manufacturer Tesla to directly sell its cars to consumers.
The conflict between automakers and car dealers has been ongoing for decades. According to the Wall Street Journal, car dealers have been trying to stop automakers from setting up company-run stores to avoid competition. All these efforts to protect their franchises resulted to a state legislation win despite the last minute lobbying.
The New Jersey Motor Vehicle Commission approved the rule change the same day.
As a response, Tesla's senior executive accused New Jersey Governor Chris Christie of breaking a deal to hold off on a rule change requiring all car retailers in the state to have a franchise agreement with an auto maker.
Diarmuid O'Connell, Tesla's vice president for business development told WSJ that the rule change is like giving "death penalty" for its two stores in the state.
Car dealers explain that Tesla's model, if spread to other manufacturers, may put an end to a system that has been keeping the investments of independent businessmen around for a hundred years.
Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, said Tesla was aware of the proposed rule change and even commented during the public review.
"Tesla is making a big pay today in trying to drag political and legal intrigue into this battle when none exists," Appleton told WSJ.
A spokesman of Gov. Christie said ever since Tesla began its operations, they have made it clear that direct-selling operations require legislation because, under the state law, direct sales model is illegal. "They've been portraying this as sprung upon them, but that's just not true," the spokesman said. "Tesla has been aware of this position from the beginning."
Tesla defends that the design is appropriate for electric car technology to better educate the consumers.
New Jersey is the third state to ban Tesla's direct-selling of cars to consumers following Texas and Arizona, TechCrunch reports.
In Ohio, Tesla will face a new challenge as legislations are proposed to ban direct sales.
