New Jersey joins Arizona and Texas in Tesla sales ban

New Jersey's Motor Vehicles Commission approved a rule today that bans Tesla's direct sales of vehicles to consumers.

Tesla store
Tesla sells its Model S to consumers through stores, such as this one in Florida. Getty

The New Jersey Motor Vehicle Commission (NJMVC) met today to approve a new regulation banning Tesla from selling its Model S in the state. The ban will take effect on April 1. Two other states, Arizona and Texas, enforce similar rules that prevent auto manufacturers from making direct sales to consumers.

As CNET covered in an earlier story, Tesla had been in talks with New Jersey administration officials and the NJMVC over the rule change. On Monday, the NJMVC abruptly notified Tesla that it would meet to approve the rule change at a session today, bypassing a legislative process.

The rule change means that Tesla will not be able to sell cars through its two stores in New Jersey after April 1.

These types of regulations were common in many states to ensure that consumers had a local dealer to which they could turn for maintenance. As Tesla began its direct sales model, some states chose to modify these regulations. Tesla maintains numerous service centers for its vehicles around the country, with one in New Jersey.

In a conference call earlier, Tesla's Diarmuid O'Connell, vice president of Business Development, said that the company would prefer not to try to overturn these state regulations in Federal court, on the grounds that they violate the Commerce Clause of the Constitution. However, he did not rule out that strategy as a last resort.

Tags:
Car Tech
Tesla
About the author

Wayne Cunningham reviews cars and writes about automotive technology for CNET. Prior to the Car Tech beat, he covered spyware, Web building technologies, and computer hardware. He began covering technology and the Web in 1994 as an editor of The Net magazine. He's also the author of "Vaporware," a novel that's available as a Nook e-book.

 

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