The New Jersey Motor Vehicle Commission approved a proposal banning auto manufacturers from selling cars directly to consumers. The move was a setback for the luxe electric car company Tesla Motors, which wants to sell its cars directly without working with separate dealers.

A spokesperson for the Commission said the new regulations would take effect April 1. They referred all further questions about the matter to the office of New Jersey Gov. Chris Christie. Tesla shares are off about 2.5%.

On Tuesday, Tesla launched a preemptive strike against the proposal and accused the Christie administration of having acted in bad faith. In a blog post on the company site and series of tweets from its official account, Tesla said it had been negotiating with officials in New Jersey to be allowed to directly sell its cars there in the face of "attacks" from the New Jersey Coalition of Automotive Retailers. Tesla argued the governor's office promised to handle the question of allowing direct auto sales in New Jersey "through a fair process in the Legislature" and instead "decided to go outside the legislative process by expediting a rule proposal that would completely change the law."



The company also encouraged supporters to protest the Commission's meeting on the proposal Tuesday afternoon. Tesla currently operates two stores in New Jersey including one in the Short Hills mall (pictured at left).

Prior to the meeting, Christie administration spokesman Kevin Roberts responded to Tesla's attack with a statement sent to Business Insider saying it was the company, not the governor's office, that was attempting to bypass normal procedures. Tesla Vice President of Business Development Diarmuid O’Connell subsequently countered with his own statement to Business Insider disputing the Christie administration's assertion Tesla was aware the governor's office believed the company "would need to engage the Legislature on a bill to establish their new direct-sales operations under New Jersey law" since negotiations on the issue began.

"The statute in New Jersey plainly allows Tesla to be licensed to sell cars there. Indeed, the Motor Vehicle Commission has licensed Tesla under that statute ever since October 2012, and any suggestion that Tesla was told 'since the beginning' about any problem with its ability to be licensed there is false," O’Connell said. "The only thing that has changed is the Christie Administration’s sudden decision to go around the Legislature in an attempt to enact a rule that the statute doesn’t permit. Worse, it has done so without any reasonable notice or even a public hearing."

CNBC first reported on the outcome of the meeting. Neither Christie's office nor Tesla immediately responded to a request for comment about the reported result of the meeting.

This post was updated at 3:46 PM with confirmation the proposal was approved.

NOW WATCH: Elon Musk Explains What He Actually Does At His Companies

