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Tech

NJ Blocks Direct Car Sales; Tesla Decries ‘Affront To Free Market’

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2013 Tesla Model S (Photo credit: Tesla Motors)

2013 Tesla Model S (Photo credit: Tesla Motors)

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NEW JERSEY (CBS/AP) – New Jersey motor vehicle officials have approved a regulation that would require all new car dealers to obtain franchise agreements to receive state licenses.

The regulation was adopted Tuesday. It effectively prohibits companies from using a direct sales model, which cuts out the middleman and takes vehicles directly to customers through smaller retail establishments.

Critics say the regulation will hamper the electric-car industry’s attempts to expand in New Jersey.

Palo Alto-based Tesla Motors is one of the electric-car firms that would be affected by the new rule. It calls the rule “an affront to the very concept of a free market.”

© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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