After New Jersey’s legislature pressed ahead with a unanimous decision to ban sales of Tesla Motors’ (NASDAQ:TSLA) Model S sedan, the company wrote a couple of scathing blog posts calling the state out on its seemingly shady, back room-organized, and auto-dealer supported policy. In one of the posts, Tesla said it was considering its legal options, and earlier this week, the company delivered.
Tesla has formally appealed the state’s decision, saying that the new regulations contradict an existing franchise statute the state legislature approved that allows such direct sales, NJ.com reports. Tesla said the commission “had bowed to intense pressure from the state’s franchise auto dealers association, the New Jersey Coalition of Automotive Retailers,” or NJCAR, according to the site.
“Franchise dealers have an inherent conflict of interest in selling electric vehicles,” Tesla’s filing reads. “In order to do so effectively, they would need to enthusiastically tout the reasons why electric vehicles are superior to gasoline vehicles. This is not something that they are going to do since gasoline vehicles represent virtually all of their revenue.”
Naturally, James Appleton, who heads up NJCAR, disagrees, arguing that the other 13 car companies that sell electric vehicles do so through franchises, including in New Jersey. What he didn’t mention was that those other 13 companies sell numerous gasoline vehicles as well, according to NJ.com.
Appleton is confident that the courts will “recognize the compelling state interest in regulating the sale and distribution of new motor vehicles and that Tesla’s legal challenge of the NJ MVC rules will fail,” NJ.com reports.
Tesla currently operates two locations in New Jersey but recently secured rights for a third. Under the legislation, Tesla is allowed to maintain locations as long as they do not facilitate the sale of the vehicle. Think of them as a sort of gallery, if you will, but the art isn’t available for purchase.
Tesla was originally ordered to cease its sales operations by April 1, but an extension was offered to allow the company until April 15. It’s unsure, however, if the ban on sales will ever take effect; public outcry spurred by Tesla’s blogging campaigns have helped the company reach deals in Washington, New York, and Ohio, where Tesla is allowed to operate an allotted number of store fronts. It’s believed that Tesla will eventually strike a similar deal with New Jersey.