Bruce Shipkowski
Associated Press
TRENTON, N.J. — New Jersey motor vehicle officials have approved a new regulation that would require all new car dealers to obtain a franchise agreement in order to receive a state license.
The regulation adopted Tuesday by the state's Motor Vehicle Commission effectively prohibits companies from using a direct sales model, which cuts out the middleman and brings vehicles directly to customers through smaller retail establishments. The MVC's board adopted the regulation by a 6-0 vote, and it will take effect April 1.
Critics say the regulation will hamper the electric car industry's attempts to expand its presence in New Jersey. The regulation was supported by the New Jersey Coalition of Automotive Retailers (NJCAR), which has noted that state law has long required automakers to sell their vehicles through dealers.
California-based Tesla, one of the electric car firms that would be affected by the new rule, called it "an affront to the very concept of a free market," in a statement posted on its corporate website.