TIME energy

Electric Cars Will Change the Way You Power Your Home

An electric charging cable is seen connected to the updated Nissan Leaf vehicle during a news conference in Japan, Tokyo, on Tuesday, Nov. 20, 2012.
An electric charging cable is seen connected to the updated Nissan Leaf vehicle during a news conference in Japan, Tokyo, on Tuesday, Nov. 20, 2012. Kiyoshi Ota—Bloomberg/Getty Images

How the homes of the future will generate and store their own electricity, turning your house into a mini-power plant

Electric vehicles are our fastest-growing alternative to oil-derived gasoline. Solar panels are our fastest-growing alternative to coal-powered electricity. They’re both getting less expensive and more effective, driving our clean-energy revolution. And there’s new evidence that these two great tastes can taste particularly great together, transforming how we consume and produce power in ways that will accelerate that green revolution.

The evidence comes from Opower, a firm that uses software and behavioral science to help utilities promote energy conservation — and has amassed the world’s largest storehouse of household energy data along the way. Opower studied the power-consumption habits of about 2,000 plug-in electric-vehicle owners enrolled in “time-of-use” pricing programs. That means they got discounted electricity rates from midnight to 7 a.m., when demand is typically low, but paid a surcharge during peak daytime hours, when demand tends to spike.

Grid managers have to balance supply and demand every second, so big gaps between peak and off-peak demand can create big inefficiencies by forcing them to turn power plants on and off to adjust supply. In theory, the combination of electric vehicles (which can be charged anytime) and time-of-use pricing (which encourages charging after midnight) could help reduce those gaps. It could also help prevent electric vehicles (which alleviate the problem of carbon emissions) from exacerbating the problem of overloaded daytime grids. And that’s basically what the data showed — with a twist.

Opower found that EV owners did respond to the incentives to charge during off-peak hours, using three times as much power as the typical household between midnight and 7 a.m. It’s notoriously tough to get consumers to adjust their behavior, even when it’s in their financial interest, so that’s good news. At first glance, the data from the rest of the day looks like bad news: from 7 a.m. until midnight, EV owners still used 21% more power than the typical household. But this was mainly because they’re richer than the typical household; their houses were bigger and more likely to have a swimming pool. They clearly did the bulk of their vehicle charging after midnight when power was cheap.

The most striking data was from EV owners who also had solar panels. From 7 a.m. to midnight, they used about one-fourth as much power from the grid as the typical household, because they were getting power from their rooftops and often selling power back to the grid. In other words, they took very little from the grid when demand was high — at times even helping to increase supply — and took much more from the grid when demand was low. They helped smooth out demand.

That’s very good news, not only because smoothing out demand is a kind of holy grail for utilities, but because EV owners were 6.6 times more likely to have solar panels than the typical household. Nancy Pfund, a venture capitalist who invested early in Tesla Motors, the hottest EV firm, and Solar City, the leading solar installer, calls EVs “the gateway drug to solar.” Once you stop using hydrocarbons to fuel your car, she says, you want to stop using hydrocarbons, period. “Together, they can be a huge tool for managing our energy load,” Pfund says. “And they’re both taking off.”

Before 2009, when President Obama poured $90 billion into clean energy through his stimulus bill, the U.S. had no EV or solar industry to speak of. It now has nearly 250,000 EVs and nearly 500,000 solar rooftops, and both industries are still growing exponentially; Tesla and Solar City, both Elon Musk ventures, have both enjoyed soaring stock prices since going public. EV battery prices are not yet truly competitive with gasoline, although they’ve dropped 50% in five years, but retail solar prices, which have plunged 80%, are now competitive with fossil fuels in half the country. And the more they’re deployed, the cheaper they’ll get.

EVs are still less than 1% of the U.S. auto fleet, and solar still provides less than 1% of U.S. electricity. In terms of reducing emissions, they are still less significant than hybrid vehicles or wind power or energy-efficient appliances. But they are what the Silicon Valley types like to call “disruptive.” When you put a solar panel on your roof, your home becomes a mini-power plant. When you buy an electric vehicle, you suddenly control an automobile-shaped energy-storage device. It won’t be long before homeowners with both can be mini-utilities, buying power from the grid when it’s cheap and selling power to the grid when it’s expensive. Willett Kempton, a University of Delaware professor, has created electric vehicles that communicate and interact with the grid in real time; they earn about $150 per car per month by storing excess power when the grid gets temporarily overloaded.

That would make the economics of EVs more attractive, accelerating the route to mass adoption. “Net metering” will be similarly important for solar, allowing homeowners to sell power to the grid at attractive prices; as the Opower study demonstrated, time-of-use pricing can also help shape electricity demand. All of this will help create a more flexible, less centralized energy system, incorporating more renewable power without sacrificing reliability when the sun isn’t shining or the wind isn’t blowing, adapting instantaneously to changes in demand and supply with the help of modern information technology and Opower-style Big Data. Our cars (as well as other smart appliances) will optimize their power needs with our utilities, and we can intervene at any time over our iPhones.

You could imagine a future where solar panels and EVs (perhaps with additional backup storage, like the wall-mounted batteries Solar City and Tesla recently launched) help Americans declare independence from the grid, the way mobile phones have set us free from landlines. More likely, though, the clean-energy revolution will just change our relationship to the grid. Our utilities will be as dependent on us as we are dependent on them. And we’ll have power over our power.

TIME

Tesla Opens Its Patents to Everyone

Now any company can use Tesla's technology "in good faith"

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Tesla wants to share its secret sauce with everyone.

Telsa CEO Elon Musk said in a blog post Thursday the automaker will not initiate patent lawsuits against anyone using the company’s technology “in good faith.”

Musk said in the post that while Tesla never wanted patents, he originally felt they were necessary to protect Tesla’s technology from misuse by rival car companies. But he’s now come around, and says this theory is wrong.

“The unfortunate reality is the opposite: electric car programs (or programs for any vehicle that doesn’t burn hydrocarbons) at the major manufacturers are small to non-existent, constituting an average of far less than 1% of their total vehicle sales,” he said.

Musk framed the new open source policy as an attempt to speed up efforts to address climate change.

“Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis,” Musk said.

He believes that Tesla allowing others to use its technology will increase innovation, and that “the world would all benefit from a common, rapidly-evolving technology platform.” This could also benefit Tesla itself if other companies build charging stations or other products that support Tesla vehicles.

Tesla’s patent policy reversal comes as a surprise, as Tesla has been developing its $5 billion battery factory in recent months and many have thought the company would make much of its money on its battery technology intellectual property.

TIME Autos

BMW’s Latest Is a Drop-Dead Stunner With a Huge Surprise

BMW i8
BMW i8 UWE FISCHER/BMW

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This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

BMW’s new $135,000 i8 sports car, which will begin appearing on the streets of Beverly Hills and Greenwich in a few weeks, defies easy categorization. It is fast. It is light. It is exceptionally fuel-efficient and eye-catching.

Think of i8 as a Porsche Carrera behaving from time to time like a Toyota Prius or Nissan Leaf.

As stunning and original as the i8 is from an automotive engineering standpoint, it represents an important philosophical statement for the German automaker, known until now for powerful, sporty machines more than environmental righteousness. Tougher regulations regarding carbon emissions threaten BMW and other makers of high-performing models unless they can develop and master advanced energy-efficient technologies, such as those embodied in i8.

One such breakthrough technology exemplified in the i8, as well as for BMW’s smaller, less expensive i3 city car, is extensive use of carbon fiber instead of steel. The cockpits of both cars are fabricated from the material, which has never before been used for the mass manufacture of a high-volume vehicle due to prohibitive cost and complication.

“What makes carbon fiber feasible for these new models is the way in which we have learned to manufacture the substance so that the process can be more highly automated, quicker and less wasteful,” said Andreas Wuellner, managing director of SGL Automotive Carbon Fibers LLC, in Moses Lake, Washington.

MORE: Tesla’s big gamble in China

SGL, a joint venture partner with BMW, on Friday announced a new $200 million investment to triple the capacity of its Moses Lake factory, making it the largest such installation in the world. The location of the plant was chosen, in part, because the electricity could be furnished by hydroelectric generators, which produce little or no carbon dioxide compared to fossil-fuel plants

The gas-electric plug-in hybrid i8, weighing 3,274 pounds (about 1,000 pounds less than an aluminum-bodied Tesla Model S electric), can accelerate to 60 miles per hour from 0 in about 4.4 seconds. Though the U.S. federal fuel efficiency rating hasn’t yet been released, BMW engineers calculate it will be about 90 miles per gallon.

i8 can be driven in five different modes, each of which optimizes some combination of range, power, fuel efficiency or battery charge. Under ideal conditions, the car can be driven as far as 375 miles before it needs a fill-up or a charge. But it can also be driven up to 23 miles in battery-only mode.

As if the i8′s lowslung body wasn’t sexy enough, its gullwing doors deliver a heart-fluttering caress. (BMW calls them “scissor” doors to avoid the gullwing designation first made famous by archrival Mercedes-Benz.)

BMW’s $41,400 i3 already appears to be a hit. The automaker said on April that it was increasing the rate of production to 100 cars per day, in the face of strong initial demand. Both models are built at BMW’s factory in Leipzig, Germany, which is powered in part by wind turbines.

BMW has dabbled with carbon fiber previously: its extensive use in i3 and i8, like Ford Motor Company’s decision to manufacture its next-generation F Series pickup from aluminum, are signs that the environmental concerns are growing daily as a critical factor in vehicle design.

TIME Autos

3 Next-Gen Plug-In Cars That Could be Game Changers

Japan Nissan
Itsuo Inouye—AP

The biggest complaints about electric cars are that they’re too expensive or have limited driving range, or that don’t have enough space for hauling gear or a family.

In one way or another, all of these issues are being addressed in forthcoming new versions of the Nissan Leaf and Chevy Volt, and a new plug-in hybrid Chrysler Town & Country—yep, a minivan—planned to hit the marketplace in the near future.

The Next Nissan Leaf
The second version of the Nissan Leaf, introduced in early 2013, addressed the sticking point for a lot of drivers who weren’t yet convinced to bite on an EV: By dropping the Leaf’s base price by over $6,000, Nissan was able to make a purely electric-powered car affordable, starting at under $19,000 once incentives were factored in.

The third-generation Leaf, due to hit the marketplace sometime around 2017, as reported by Automotive News, is expected to have a dramatically improved battery and therefore, a dramatically improved driving range. The goal is for the next the Leaf to have a driving range of 186 miles before needing a charge, up from 73 miles originally and 84 miles on a full charge for the 2014 version. If and when that happens, Nissan will be able to make a much stronger argument that the Leaf is truly affordable and practical.

The Next Chevrolet Volt
Car and Driver offers a sneak peak of the new plug-in hybrid Volt, which is expected on the market for the 2016 model year—and which gives drivers improvements in electric driving range and a cheaper base price to boot. Not long ago, General Motors announced that the price of the next Volt would start at around $30,000 before incentives, around $10,000 less than the original model. The driving range when powered strictly by battery, meanwhile, is expected to jump from 38 miles today to 50 to 60 miles in the forthcoming Volt—though likely only for a 2016 Volt with an optional more powerful (and more expensive) battery.

The Plug-in Chrysler Town & Country
Bigger, heavier cars need more power to operate, which makes the prospect of a battery-powered large vehicle problematic. The lithium batteries now in use are exceptionally heavy, and bigger vehicles would require bigger, heavier batteries—which in turn would weigh the cars down further. At some point, the math doesn’t add up, with prices for larger hybrids and EVs getting so high as to become impractical. That’s why the vast majority of EVs (and hybrids for that matter) are on the small size, and why they employ as many technologies and strategies as possible to keep their weight down.

Nonetheless, Fiat Chrysler just announced plans for a plug-in hybrid minivan, a first-of-its-kind Town & Country model that’s expected to get an astounding 75 mpg (or rather, the equivalent with electric and gas power combined), available for purchase around 2016. Chrysler anticipates its lineup will include a full-size plug-in hybrid crossover SUV by that time as well.

What’s curious is that Chrysler’s announcement comes at a time that, as USA Today noted, many automakers are pulling the plug on fuel-efficient hybrid versions of big SUVs such as the Cadillac Escalade and Chevy Tahoe due to poor sales and lack of interest from buyers. The most common reason cited for the failure of such models is that they were just too expensive to justify the bonus of getting a few more miles to the gallon.

The takeaway for Chrysler is that the next-generation large hybrids it’s rolling out must be vastly more fuel efficient than their traditionally-powered counterparts (that looks to be the case, with the 75 mpge figure), and they must avoid being astronomically expensive (we’ll have to wait and see).

TIME Companies

Tesla Stock Takes a Tumble After Lower Profits

The company expects to deliver more than 10,000 more vehicles this year, but high costs rattled investors.

Tesla stock fell approximately 9% Thursday morning before partially recovering a day after the company announced a big drop in profits.

The maker of high-end electric cars said Wednesday that revenue rose in the first quarter but costs tapered profits. Tesla earned $17 million last quarter, down from $45.9 million in the previous quarter.

Billionaire CEO Elon Musk said operating expenses, including research and development and sales and administration costs, will continue to grow in the next quarter. That growth will be partially fueled by development for Tesla’s new crossover-utility vehicle Model X, which is expected to go on sale next year, CNN Money reports. The company’s expansion into China and construction of a new battery factory also weighed down on profits.

The company aims to deliver 35,000 vehicles this year, up 55% from last year.

At 10:35 a.m. ET Thursday, Tesla stock was down $11.60, or 5.8%, to $189.75.

TIME

Better Fuel Efficiency Is Hurting the Most Efficient Cars of All

A Toyota Prius hybrid car.
Toyota Motors / AFP / Getty Images

Why aren’t sales higher for electric vehicles and hybrid plug-ins? A big reason has to do with the technology that EVs are supposed to replace, the internal combustion engine.

Last year, Nissan Leaf sales more than doubled the total from 2012. Sales for the entire plug-in category, which includes pure battery-powered vehicles like the Leaf and gas-electric hybrids such as the Chevy Volt, nearly doubled as well last year.

Even so, automakers have recently launched major incentives and price-cutting measures in order to win over potential buyers. And the reason they’re doing so is that sales, while on the rise, haven’t been as strong as many had hoped.

“EVs have been a disappointment, compared to what we expected,” Morgan Stanley analyst Ravi Shanker flatly said, according to Automotive News. “Their cost hasn’t come down enough. Batteries haven’t gotten better. And gas prices haven’t gone up like everyone expected. And at the same time, the automakers have done a great job of making the internal combustion engine better.”

Yes, some of the explanation for why electric vehicles aren’t selling better is directed squarely at plug-ins themselves. As skeptics have pointed out since EVs hit the marketplace, the limited driving range, high initial price, and/or slow and inconvenient charging procedure of plug-in cars are deal breakers for many drivers.

But as Shanker noted, underwhelming plug-in sales can also be partially explained by the other parts of the equation affecting consumer car-buying decisions. When gas prices are high, and the assumption is that they’ll keep on increasing, opting for an electrified car makes more and more sense as a long-term money saver. Likewise, when comparing the costs of commuting and running routine errands in a battery-powered car versus an old-fashioned gas guzzling SUV or sedan, the EV can seem like an especially savvy move for the household budget.

What’s hurting plug-in sales, however, is that gas prices aren’t sky high, and few experts today are forecasting the impending arrival of $5 per gallon like they were two years ago. The other factor is that gas guzzlers are disappearing, with new studies indicating that half of the new cars sold this year get 23 mpg or better, and new cars now averaging over 25 mpg thanks to improved efficiency in the internal combustion engine, as well as automakers (and buyers) generally embracing lighter, smaller cars.

Amazingly, car dealerships and sales staffers themselves often don’t seem sold on the wisdom of going electric. Secret shoppers from Consumer Reports just concluded a broad investigation of car dealerships and plug-ins, and during the course of visiting 85 dealerships, they found out that few dealership lots have decent selections of plug-ins, and that many sales employees aren’t knowledgeable about EV sales incentives and technology. Perhaps unsurprisingly, sales staffers who weren’t fully up to speed about plug-ins were particularly likely to try to steer customers away from EVs and toward traditional cars powered solely by internal combustion engines.

“Many seemed not to have a good understanding of electric-car tax breaks and other incentives or of charging needs and costs,” the CR report stated, referring to dealership sales staffers encountered by secret shoppers. “Many also didn’t seem to recognize that for people who intend to go with an electric car, the reasons for leasing are broader than for ordinary cars, including that you don’t have to wait until tax time to receive a generous tax incentive.”

If professional car sales employees don’t understand how all of this works, and can’t (or won’t) lay out a simple, sensible case for switching to a plug-in car, and can’t (or won’t) explain the smartest way to do so, imagine how the average consumer feels.

TIME Autos

Here Comes the Next Big Push to Get Drivers to Buy Electric Cars

Japan Nissan
Itsuo Inouye—AP

Everybody understands that one big upside of owning an electric car is that you’ll never have to spend a penny on gasoline. Now, you won’t have to pay for the electricity needed to charge the car either.

Thanks to a new “No Charge to Charge” initiative from Nissan, drivers who purchase or lease a new battery-powered Nissan Leaf will receive a special card that allows them to plug in at public charging stations at no cost whatsoever starting July 1. The program will be available in 25 U.S. markets, which have collectively accounted for 80% of all Leaf purchases thus far, and owners will be able to charge their vehicles for free for two years. Anyone who purchases outright or leases a new Leaf as of April 1 or later is eligible in the participating markets, which include many major cities along the West Coast, as well as Nashville, Houston, and Washington, D.C.

According to the U.S. Department of Energy’s FuelEconomy.gov site, a Nissan Leaf owner can expect to pay an average of $550 in “fuel cost” annually, based on driving 15,000 miles per year. So Nissan’s program would seem to be the equivalent of a $1,100 bonus for buyers. Whether or not an owner actually realizes such a return will depend a lot on how easy it is to use the public charging stations where plugging in is free. Most electric car owners charge their vehicles at home at night, and Nissan isn’t going to pitch in with any portion of your house’s electricity bill.

Even if “No Charge to Charge” offers less of a return that it initially seems like at first glance, the program obviously makes it more enticing—and more cost-effective—to buy a Leaf, so it could push some potential buyers off the fence. “The net effect here is it really increases the utility of the Leaf for the driver,” Norman Hajjar, research director for the electric-car app creator Recargo, said of Nissan’s new initiative, via the San Francisco Chronicle.

Nissan’s move comes at a muddled time in the electric car market, when Tesla is clearly the runaway success at the high end of the field, and when a wide range of less expensive EVs, plug-ins, and hybrids continue to vie for consumer attention. Despite the arrival of more and more plug-in models into the market, hybrids and electric cars remain a very small niche, representing around 3% of new car sales.

In a statement that’s about as definitive as you can get, Michelle Krebs, senior analyst with Edmunds.com, told the Detroit Free Press, “Plug-in vehicles aren’t going away, but how many will sell, at what price and using which technology, is yet to be determined.”

The Nissan Leaf ended 2013 on a high note, with its best sales month ever in December: 2,529 units sold, bringing the year’s total to 22,610, more than double the amount in 2012. But the disappearance of end-of-year incentives, combined with brutally cold weather that hurt all auto sales, resulted in a big electric car sale slump in early 2014. According to MarketWatch, there were 918 Chevy Volts and 1,252 Nissan Leafs sold in January 2014, compared to 2,392 Volts and 2,529 Leafs the previous month.

Leaf sales have rebounded with the onset of warmer weather, including 2,507 units sold in March, its second-best month ever, and a 12% increase over March 2013. For the first three months of 2014, meanwhile, sales of the gas-electric hybrid Volt decreased by 15% compared to the same period in 2013.

In any event, it’s clear that for any plug-in to achieve true mainstream appeal, some work needs to be done to convince the average driver of the cost-effectiveness of an electric car. Basically, the cars need to be cheaper to own and operate, or automakers need to do a better job of proving to consumers that these vehicles are indeed cheap to own and operate.

Throwing in two years’ worth of free charging, as Nissan is doing, certainly helps the equation. So does the tried-but-true practice of simply lowering the retail price. That’s what Nissan did in early 2013, which resulted in the automaker selling twice as many Leafs in 2013 that it did the previous year. And that’s what GM is planning for the next Chevy Volt, with the recent news that an entry-level Volt should hit the market for the 2016 model year with a list price starting at around $30,000—roughly $10,000 less than the base price of the original Volt.

TIME Tesla

Tesla’s War With the States Shifts Into Overdrive

Christie Appointees Ban N.J. Direct Sales for Musk's Tesla Cars
A Model S is displayed at the Tesla store in the Short Hills Mall in Short Hills, N.J., on March 12, 2014 Emile Wamsteker—Bloomberg/Getty Images

The electric car maker run by PayPal billionaire Elon Musk is fighting powerful auto interests in states across the U.S. for the right to sell its cars directly to consumers, upending the traditional dealership model

Tesla’s campaign to sell its electric cars directly to consumers shifted into high gear this week as state lawmakers debated Tesla-related bills while powerful auto lobbyists braced for a fight. In New York, a measure designed to ban Tesla from opening new stores passed a key hurdle, while in Arizona, lawmakers pushed a bill to make it easier for Tesla to sell its cars without establishing a dealer network.

The escalating conflict underscores Tesla’s role as a disruptive force in the U.S. auto industry, not only because the company’s cars don’t use gasoline engines, but also because Tesla is trying to upend the dealership-franchise model that has underpinned the automobile industry for decades. That model — and laws protecting it — emerged in the 1930s as a way for automakers to build a national sales and service force and help foster local economic growth.

Tesla sells cars directly to customers through its own retail locations — much like Apple does with its high-tech products — whereas other car companies rely on independently owned dealerships for sales and service. Auto-industry lobbyists say this model protects the public by ensuring consumer choice. They also warn that if Tesla is allowed to skirt the franchise model, consumers could be left in the lurch without a local service location if the electric-car maker goes bankrupt.

Tesla is currently barred or restricted from selling its cars directly to consumers in several states, including Texas, Arizona and, as of last week, New Jersey. In those states, the company operates “galleries” where consumers can inspect Tesla cars, but employees are prevented from discussing pricing or offering test-drives. After inspecting a Tesla, consumers in those states can purchase a vehicle online.

(MORE: Tesla CEO Rips New Jersey Over ‘Backroom Deal’ Auto-Sales Ban)

New York state assemblyman David Buchwald will hold a press conference on Friday joined by Tesla officials and environmental advocates to oppose the New York bill, which Tesla says would end the direct sale of its cars in New York. The bill, which passed a key New York state Assembly committee on Wednesday, and is backed by several dealership associations, would stifle innovation and limit consumer choice, according to Buchwald.

Meanwhile, in Arizona, lawmakers are set to consider a bill that would allow Tesla to sell cars in the state without establishing a dealer network, reversing a ban that dates back to 2000. “This is a great opportunity for us to send a message that we welcome business and we welcome Tesla here to Arizona,” state representative Warren Petersen, the bill’s sponsor, said in comments cited by the Associated Press. “We shouldn’t deny our consumers from being able to purchase a product if they want.”

The Arizona bill highlights an awkward situation facing lawmakers there. Arizona is one of four states that Tesla is considering for its planned 10 million-sq-ft (900,000 sq m) lithium-ion-battery factory, which would supply the company’s California electric-car-assembly plant. Tesla plans to invest $2 billion in the new battery facility, dubbed the Gigafactory, and says it could employ as many as 6,500 workers at the plant. Earlier this week, Arizona’s entire U.S. congressional delegation sent Tesla a letter touting the state as an “ideal choice for this revolutionary factory.”

But even as Arizona officials woo Tesla over the Gigafactory, the company is prohibited from selling its cars directly to consumers in the state. (Texas, another candidate for the Gigafactory, also bars Tesla from selling its cars directly to consumers.) According to Arizona state senator Bob Worsley, the bill allowing Tesla to sell directly to consumers is “not a quid pro quo,” he told the AP. “I want the message from our state to be that we welcome the opportunity to work with large successful companies with this size market cap.”

Tesla is battling powerful state auto-dealership interests across the country. In Ohio, the state Automobile Dealers Association waged an unsuccessful legal fight to shut down Tesla’s two existing locations in Cincinnati and Columbus. Now the group is urging state lawmakers to pass a bill that would prevent the company from expanding to new retail locations by blocking auto manufacturers from obtaining dealer licenses.

Back in New York, the anti-Tesla bill is headed for a full vote just days after the New Jersey Motor Vehicle Commission, which is composed of political appointees selected by Governor Chris Christie, blocked Tesla’s ability to sell electric cars through its own retailers in that state. In response, Tesla CEO Elon Musk charged that auto-dealer lobbyists “cut a backroom deal” with Christie “to circumvent the legislative process.” Jim Appleton, head of the N.J. Coalition of Automotive Retailers, shot back by claiming that Musk was having a “hissy fit.”

Musk mocked the “consumer protection” rationale that was presented. “If you believe this, Governor Christie has a bridge closure he wants to sell you!” Musk wrote in a company blog post. “Unless they are referring to the mafia version of ‘protection,’ this is obviously untrue.’”

As a result of the new rule, New Jersey residents will soon have to go out-of-state or use the Internet if they want to purchase a Tesla vehicle. Musk urged would-be Tesla buyers to visit the company’s New York City store or its King of Prussia, Pa., location near Philadelphia.

For his part, Christie blamed the New Jersey state legislature for effectively banning Tesla from selling cars to consumers directly in the state. “I’m not pushing Tesla out; the state Legislature did,” Christie said at a town-hall meeting, according to the Newark Star-Ledger. “I have no problem with Tesla selling directly to customers, except that it’s against the law in New Jersey.”

TIME Electric Cars

Tesla CEO Rips New Jersey Over ‘Backroom Deal’ Auto Sales Ban

Christie Appointees Ban N.J. Direct Sales for Musk's Tesla Cars
A Model S with sits on display at the Tesla store in the Short Hills Mall in Short Hills, NJ, March 12, 2014. Emile Wamsteker—Bloomberg/Getty Images

The state's motor vehicle commission blocked Tesla's ability to sell electric cars through its own retailers, so Tesla CEO Elon Musk is urging buyers to visit the company's locations in New York City and Philadelphia

Tesla CEO Elon Musk blasted New Jersey officials on Friday for moving to prevent consumers from buying vehicles directly from the electric car maker, charging that auto dealer lobbyists “cut a backroom deal” with Gov. Chris Christie “to circumvent the legislative process.” In response, the head of the state Coalition of Automotive Retailers accused Musk of throwing a “hissy fit.”

Earlier this week, the New Jersey Motor Vehicle Commission, which is composed of political appointees selected by Gov. Christie, blocked Tesla’s ability to sell electric cars through its own retailers, as it does in New York and Pennsylvania. Tesla sells cars directly to customers through its own retail locations, whereas most car manufacturers rely on third-party dealerships for sales.

As a result of the new rule, New Jersey residents will soon have to go out-of-state if they want to purchase a Tesla vehicle — and that’s exactly what Musk is now suggesting. In a blog post, Musk urged would-be Tesla buyers to visit the company’s New York City store or its King of Prussia, Pa. location near Philadelphia.

For decades, the major U.S. automakers have sold vehicles under the now-familiar dealership franchise model. As a result, the U.S. auto market is composed of thousands of independently owned dealerships, which are granted the right to market and sell brands like Ford — much in the same way that fast-food restaurants like McDonald’s are independently owned franchises.

“When Tesla came along as a new company with no existing franchisees, the auto dealers, who possess vastly more resources and influence than Tesla, nonetheless sought to force us to sell through them,” Musk wrote. “The reason that we did not choose to do this is that the auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none.”

This market structure has created a conflict of interest that stacks the deck against Tesla, according to Musk, because the auto dealers “make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car.”

In the blog post, Musk wrote that he has “made it a principle within Tesla that we should never attempt to make servicing a profit center. It does not seem right to me that companies try to make a profit off customers when their product breaks. Overcharging people for unneeded servicing (often not even fixing the original problem) is rampant within the industry and happened to me personally on several occasions when I drove gasoline cars.”

Musk mocked the “consumer protection” rationale that was presented to justify the New Jersey rule change. “If you believe this, Gov. Christie has a bridge closure he wants to sell you!” Musk declared. “Unless they are referring to the mafia version of ‘protection,’ this is obviously untrue. As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.”

Kevin Roberts, a spokesperson for Gov. Christie, defended the policy. “This administration does not find it appropriate to unilaterally change the way cars are sold in New Jersey without legislation and Tesla has been aware of this position since the beginning,” Roberts told CNNMoney. Jim Appleton, head of the N.J. Coalition of Automotive Retailers, denied there was a backroom deal, and told NorthJersey.com that Musk was having a “hissy fit.”

As for Tesla, Musk said that the company’s New Jersey 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 added: “We are evaluating judicial remedies to correct the situation.”

TIME Automotives

Tesla Slams N.J. Ban on Direct Car Sales

Elon Musk at the Tesla store at Westfield Stratford City retail complex in London, Oct. 24, 2013.
Elon Musk at the Tesla store at Westfield Stratford City retail complex in London, Oct. 24, 2013. Simon Dawson—Bloomberg/Getty Images

Elon Musk's electric car company is criticizing Gov. Chris Christie's administration and the state's motor vehicle commission for blocking automakers from selling cars directly to customers as Tesla does to cut down on costs to consumers

Electric car manufacturer Tesla Motors criticized New Jersey Governor Chris Christie’s administration and the state’s Motor Vehicle Commission for blocking auto companies from selling cars directly to consumers Thursday. As a result of the new rule passed earlier in the day, New Jersey residents will likely have to go out of state if they want to purchase a Tesla vehicle, unless the electric car maker changes to a dealership sales model.

“The Administration and the NJMVC are thwarting the Legislature and going beyond their authority to implement the state’s laws at the behest of a special interest group looking to protect its monopoly at the expense of New Jersey consumers,” the company said in a press release. “This is an affront to the very concept of a free market.”

Tesla sells cars directly to customers through retail locations it owns, whereas most car manufacturers rely on third party dealerships for sales. New Jersey is the third state to ban the direct car sales, according to TechCrunch. Texas and Arizona also ban the practice.

The New Jersey Coalition of Automotive Retailers, a car dealership advocacy group, supported the rule change.

Shares in the company slipped 1.85 percent during regular trading.

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