Tesla (TSLA) Sues New Jersey Over Dealership Ruling

AP reports that electric-car maker Tesla Motors (TSLA) — which as of April 1, is no longer able to sell vehicles in New Jersey as a result of a ruling made last month from the state’s Motor Vehicle Commission [NJMVC] that effectively prohibits the car company from using its direct-sales model — intends to sue the state within two weeks and filed the notice last week to the state appellate division.

The Palo Alto, Calif.-based automaker which has been selling cars at two locations in New Jersey for about two years, contends that it was unfairly targeted when NJMVC amended its regulations to block Tesla’s direct-to-consumer sales model. Tesla founder and CEO Elon Musk, who reacted to the decision by accusing New Jersey Governor Chris Christie of “subverting democratic process to try to block Tesla sales”, vowed to pursue legal remedies to fight the ban. Tesla sees the ban as “an affront to the very concept of a free market.”

Besides, New Jersey, Tesla has been banned from selling its cars directly to the customers in the states of Texas and Arizona. Other states, like Ohio or New York have encouraged the direct sales system.

Tesla shares are down $1.28, or 0.56%, today, trading at $229 and change as of 9:03AM EDT.

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