Tesla Motors, Inc. Stock Gets a Boost From a Key Win in Its Dealer Battle

By Fool.com

New Jersey did a 180 today on its stance about whether or not electric-car maker Tesla Motors should be able to sell its vehicles directly to consumers. One year ago, New Jersey Gov. Chris Christie finalized an unexpected ban on direct sales of Tesla vehicles in the state. Today, the ban was reversed, sending shares up more than 3% as of market close.

Tesla store.

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A heated battleLast year, after the Christie administration unexpectedly turned against Tesla in a last-minute deal, Tesla CEO Elon Musk blogged some vicious words toward the Christie administration, in a post titled "To the People of New Jersey."

The friction between Tesla and New Jersey officially ended today when Christie signed a bill into law enabling Tesla to open up to four stores where it can sell its cars directly to consumers.

Tesla provided this statement, attributable to Tesla VP of Corporate Business Development Diarmuid O'Connell, to The Motley Fool:

Tesla makes a number of arguments for selling its vehicles directly to consumers, but two stand out as key. First, Tesla argues that selling electric cars is an education-intensive process. Second, Tesla says a low-maintenance profile for its battery-powered cars means dealerships, who make most of their profit from service, wouldn't have incentive to sell Tesla vehicles.

Model S. Image source: Tesla Motors.

Tesla's biggest win yetIn light of the heated history between Tesla and New Jersey, today was a key win for Musk & Co. And considering that New Jersey is the fourth-largest market for luxury vehicles, the win is a clear boon for Tesla sales. Last year, Model S sales increased 41% from 2013, reaching about 31,700. About 55% of these deliveries were in North America. Tesla said in its third-quarter letter to shareholders that it expects Model S deliveries to increase 50% in 2015 from 2014.

A similar bill is advancing in Georgia, which would allow Tesla to sell cars directly to consumers at up to five dealerships in the state. Tesla is probably hoping its high-profile win in New Jersey will encourage other states blocking Tesla direct sales to be more open to change.

Tomorrow, Tesla will make headlines again when the company announces its plan to "end range anxiety" with an over-the-air update to its entire Model S fleet.

The article Tesla Motors, Inc. Stock Gets a Boost From a Key Win in Its Dealer Battle originally appeared on Fool.com.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends and owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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