Tesla filed a notice with the state appellate division in late March to sue the state of New Jersey over the ruling. Tesla claims the state unfairly targeted the company in March when the state's Motor Vehicle Commission changed its regulations, which now mandate new-car dealers have franchise agreements before they are licensed. This stops auto companies from using a direct-sales model like Tesla's.
The automaker contends that an auto dealers' association in New Jersey pressured the commission to make the change, while the association says Tesla must abide by the same regulations as other automakers.
In other Tesla news, aftermarket company Newport Convertible Engineering has received an order from a Chinese investor for 100 Model S vehicles with droptop conversions. The company told Autoblog it has contacted Tesla about putting 5,000 more units into production to help meet the expected demand for the convertibles.
Customers must supply their own Model S vehicles for conversion, according to Engadget. A soft-top convertible costs $29,000, while the rigid version costs $49,000.
The stock was down 5.58% to $187.03 at 1:16 p.m.
Separately, TheStreet Ratings team rates TESLA MOTORS INC as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."