TSLA: Tesla to End Sales in NJ on April 1

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New Jersey Gov. Chris Christie’s connection to franchised automotive dealers is forcing Tesla (TSLA) to stop selling its luxury electric cars in the state, TSLA announced.

tesla-tsla-stockTesla owns its own stores, which means the Christie-advanced rule change forces the automaker out selling in New Jersey.

READ: Gov. Christie is making things tough for Tesla in NJ

The state had originally given Tesla a license to sell, but politicians quickly jumped into the mix.

TSLA accused Christie of breaking a deal to delay the rule change requiring car retailers to have a franchise agreement with an automaker, but the change went through on Tuesday.

Tesla has been trying to retain its direct-sales model, though New Jersey and other states are pushing back in defense of franchised dealers getting a share of the sales profits.

Via the Wall Street Journal:

Tesla’s problems have their roots in decades of mistrust between independent car dealers and auto makers. Over the years, dealers have fended off efforts by the auto makers to set up company-run stores that could compete with them. The dealers have pushed for—and won—state legislation to protect their franchises.

Dealers fear Tesla’s model could cause directing selling to spread to other manufacturers, ending a century-old system that protects the sales territories and investments of many independent businesspeople.

Texas and Arizona have also banned Tesla from cutting out a third party and selling its cars directly to customers.

TSLA is up 55% year to date.

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Article printed from InvestorPlace Media, https://investorplace.com/2014/03/tsla-tesla-end-sales-new-jersey/.

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