New Jersey bans Tesla’s direct to consumer sales

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 effectively prohibits companies from using a direct sales model, which cuts out the middleman and brings vehicles directly to customers through smaller retail establishments.

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

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.