The electric car maker is now studying "judicial remedies" to fight
the ruling, Chief Executive Elon Musk said in a sharply worded blog
post. The ruling, which requires sales of all new cars to go through
dealer franchises, was approved by New Jersey Governor Chris
Christie's administration on Tuesday.
"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!"
He added: "Unless they are referring to the mafia version of
'protection,' this is obviously untrue."
Christie has been under political fire over a traffic scandal at the
busy George Washington Bridge
A spokesman in Christie's office referred to a statement from
earlier this week that said Tesla had known for a year it would need
approval from the state legislature to establish its direct-sales
Musk has long argued that the dealer franchise system is a bad fit
for 11-year-old Tesla because he says traditional car dealers make
more money from gasoline-powered cars and as a result they have less
incentive to advocate for electric cars, like the Model S sedan.
But dealers say the franchise system, in which automakers rely on a
network of independent dealers to sell cars, offers an extra layer
of accountability for consumers. Competition between dealers also
lowers vehicle prices, dealers say.
[to top of second column]
"This is the business equivalent of a temper tantrum and Elon Musk
needs to take a deep breath," Jim Appleton, president of the New
Jersey Coalition of Automotive Retailers, said when asked to respond
to Musk's blog post on Friday.
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 vehicle from Tesla stores
in New York and near Philadelphia.
Palo Alto, California-based Tesla unveiled its Model S in 2009. The
all-electric sedan costs $70,000 and up.
(Reporting by Deepa Seetharaman in San
Francisco; additional reporting by Lewis Krauskopf in New York;
editing by Matthew Lewis)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.