Tesla’s Musk Blisters Christie Over Sales Ban

Pretty strong stuff. Musk and Tesla argue that the recent history of failure among electric car makers was in large part due to these companies’ efforts to sell through existing dealerships. Auto dealerships, Musk wrote Friday, have a “fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none.”

Add to that the conflict of interest for dealerships that “make most of their profit from service.” Electric cars, Musk claims, require much less service because there are “no oil, spark plug or fuel filter changes, no tune-ups and no smog checks” on electric cars. Most “repairs” consist of a software upgrades similar to those consumers get with smartphones and computers.

Musk went on to outline how Tesla will be able to do business in New Jersey after April 1, the date that the new rules take effect:

Until at least April 1, everything is business as usual for Tesla in New Jersey. It should also be noted that this regulation deals only with sales, so our service centers will not be affected. Our stores will transition to being galleries, where you can see the car and ask questions of our staff, but we will not be able to discuss price or complete a sale in the store. However, that can still be done at our Manhattan store just over the river in Chelsea or our King of Prussia store near Philadelphia.

Musk also noted that buyers can still order vehicles “from New Jersey for delivery in New Jersey” on the Tesla website. Tesla is also currently “evaluating” legal remedies.

State legislatures in Ohio and New York are currently considering banning Tesla’s direct sales model, and New Jersey is now one of five states that bans sales entirely. Georgia and Colorado also limit either new dealerships (Colorado) or the number of vehicles Tesla can sell in the state (Georgia).

Tesla share were down 2.9% on Friday to $230.97. They’ve fallen 9.4% since peaking at $254.84 on March 4, in part because of the New Jersey decision. They are still up 53.5% for the year. The shares soared 344% in 2013.