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New Jersey bans direct auto sales; Tesla stock inches lower

The New Jersey Motor Vehicle Commission voted Tuesday to ban the direct sale of automobiles in New Jersey, forcing electric-car maker Tesla to use dealers instead.

The vote makes New Jersey makes it the third state after Arizona and Texas that will not allow Tesla to sell its vehicles directly to customers.

Tesla will no longer sell electric cars in New Jersey, effective April 1, according to Dow Jones.

(Read more: Tesla to Texas: How do you like us now?)

Most traditional auto companies sell cars through franchised dealerships.

In a blog posting on the company's website, Tesla said the governor's office "has gone back on its word'' to delay the proposed "anti-Tesla'' regulation so that it would be taken up by the state's legislature.

People walk past a Tesla motor company dealership.
Getty Images
People walk past a Tesla motor company dealership.

"Having previously issued two dealer licenses to Tesla, this regulation would be a complete reversal to the long-standing position of (New Jersey Motor Vehicle Commission) on Tesla's stores,'' Tesla said on its blog.

Shares of Tesla slipped following the announcement.

(Read more: Tesla soars, Ford falls in 'Consumer Reports' study)

--By CNBC.com. Reuters contributed to this story.

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