Tesla Motors Inc. has filed an appeal in New Jersey Superior Court to overturn the New Jersey Motor Vehicle Commission’s March 11 ruling barring it from directly selling its electric cars to consumers. The 11 ruling means Tesla’s two New Jersey stores will have to end sales effective April 15. The New Jersey Coalition of Automotive Retailers backs the commission’s position.
The appeal comes as Tesla chief executive Elon Musk remains adamant in implement his direct sales model that challenges state laws safeguarding franchised dealers. While these state laws generally bar factory-owned stores, some states opted to settle for compromise agreements that allows Tesla to sell directly to customer, albeit from a limited number of stores.
In a statement, Tesla claimed that New Jersey’s ban on its sales model is not legally permissible and that it directly harms that state’s consumers. It said that that New Jersey law preventing carmakers from exploiting their greater market power to compete unfairly against dealership franchises does not apply to Tesla because it has no dealership franchises.
Tesla said in court documents for dealers to effectively ban its direct sales model, they need to “enthusiastically tout the reasons why electric vehicles are superior to gasoline vehicles.”
In response to Tesla’s appeal, Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, said in a statement that they confident that Tesla’s legal challenge of the NJMVC rules will fail. Dealers against Tesla’s direct-sales model claim that the EV maker in some cases is violating state laws promoting price competition and protecting consumers.